Back office wine

They call me Mr Goodwin

2012-01-31T12:24:00.000-08:00

Nah, that's no really

fair to Mr Salmond cos the following letter the former RBS "economist" wrote to Mr Shred in May 2007 suggests he actually quite likes Mr Pariah: "I wanted you to know that I am watching events closely on the ABN front. It is in Scottish interests for RBS to be successful, and I would like to offer any assistance my office can provide. Good luck with the bid. Yours for Scotland, Alex"

Another more serious point of course is now that the seal's been broke can we expect to see other "Sirs" getting had up, like whaddabout Sir Callum McCarthy, the chair of the FSA when shit went tits up?

P.S. petty political points aside, I'm far more interested in what the catering staff Mr Goodwin threatened with disciplinary action over serving the wrong type of biscuit have to say about it all. You know those real people who were subjected to his "management style" and unlike the direct reports subject to "Monday beatings", were earning fuck all as compensation.

Big Boy? Pants.

2012-01-30T12:03:00.000-08:00

The Epicurean Dealmaker blog, is a really good blog that's both more literate and articulate than this thing and far more popular. But ……..… from a British perspective at least his latest chat on private equity strikes me as a bit iffy.

Add in a J-curve reference and I reckon his succinct summary of what private equity is and does could grace any finance dictionary. Except, reading it again I reckon there's another thing missing; history, which matters because the Dealmaker’s account is intended to justify as well as explain private equity.

For the Dealmaker private equity “is a valuable part of the financial ecosystem. It is particularly suited to helping businesses which require some sort of transformation, in structure, methods, and/or capital, in order to improve their value …. they are not asset strippers, “vultures,” or liquidators, either. Think of them instead as boot camp drill instructors, whipping out of shape or underperforming laggards into top-flight athletes.”

Hmm, this is the new management with no vested interests taking over and stripping out all capital consuming fat, chopping off any inefficiencies and implementing a new business model view of private equity where making money is almost entirely about adding value then selling on. It’s a lovely view and perfectly in keeping with what any self-respecting member of the British Venture Capital Association (BVCA) – the British private equity trade association - would tell you in public (Jon Moulton being a possible exception here).

Except right from the outset there's some economical with the truth thangs going on. An obvious one is that the bulk of the BVCA’s members aren’t venture capitalists at all just as the bulk of BVCA member deals by value and volume don’t involve venture capital. Rather, they're private equity bods who buy and sell established concerns, an arguably less moral activity than venture capital investments in wholly new businesses (the US equivalent here presumably being the rebranding of leveraged-barbarian-at-the-gate-buyouts as private equity). So yeah, this is a type of finance that tends to hide behind more user friendly labels.

Anyhoo, I reckon the Dealmaker misses a big trick with his chat on “dividend recapitalisations, when he says “dividend recaps … the relatively recent phenomenon of financial sponsors borrowing additional debt through their portfolio companies during the life of their investment, and using the proceeds to pay equity dividends to themselves and their limited partners”.

Now note the immediate qualification – “this is a relatively recent phenomonenon”, then ponder a while the actual nature of M&A activity over the last 100 or so years in Britain which is this - it occurs in waves.

Like according to Leslie Hannah’s Rise of the Corporate Economy you can, somewhat arbitrarily here, identify the peak of previous UK M&A waves occurring in 1881, 1898-1900, 1919/20, 1929, 1959-68 and 1973. Latterly, ONS data shows the number of mergers and acquisitions unsurprisingly peaked in 2007, the total having grown strongly from 20003/04.

So there you are then. Whereas the Dealmaker sets out generic notions as to the benefits of Private Equity, the reality appears somewhat different; actual dealmaking activity has repeatedly clustered around specific points in time. This, of course, is due to the influence of period specific factors, an obvious one latterly being the shifting willingness of banks to lend. I say shifting because well it does as was illustrated by the pre-credit crunch emergence of cov-lite debt i.e. debt sold to private equity investors with few if any of the covenants previously imposed by lenders so they could manage the risk they’d decided to take on. And lets be clear the emergence of cov-lite lending and the associated willingness of banks to lend against ever more aggressive multiples was a product of them competing to lend so they could hit their quarterly/annual sales targets.

What it was not was not a sudden recognition of private equity’s boot camp-like qualities. Rather, in practice bankers were eventually tripping over themselves to throw money at private equity. Now here is where a big boy defence presumably comes into play - bankers are big enough and ugly enough to do the appropriate due diligence and if they weren’t, well tough.

However, a criticism of private equity the Dealmaker seeks to challenge is that it loads up companies with unsustainably high levels of debt that ultimately fuck them in an eventually making lots of people redundant kind of way. Now if I was minded to argue private equity wasn’t to blame for well anything really, I’d argue that if someone offered me mad amounts of debt for hee haw, then of course I'd take it. Heck I could even cite the example of Focus DIY, bought for a couple hundred million and collapsed owing businesses, shareholders and funders around £1bn i.e. the private equity buyers had gone mad for the “dividend recaps” the Dealmaker mentions just in passing. Except with Focus this appeas to have been how the money was REALLY made, which as the Dealmaker points out is the primary purpose of private equity. Operating efficiencies, new store layouts? I guess, but really it was about borrowing as much as possible then taking as much of that money out the business as possible via dividends (and I'm no even mentioning the sale and leaseback asset stripping other private equity bods did elsewhere in increasing numbers in the run up to 2007).

Except, that’s not quite in keeping with the boot camp instructor account of private equity is it? Rather, its about being able to spot someone dumb, desperate and/or arrogant enough to lend more (and more) cash than was ever paid to buy a business so as to do a "dividend recap" as a key determinant of private equity returns. And if the business fails, as Focus did, and people lose their jobs, then hey ho.

The other thing recent experience shows is that in an M&A wave, you know a fad, a euphoric precursor to a crash during which a disproportionate number of deals get done, being able to identify patsies, ahem, bankers (and in an aggressively competitive environment there will always be a few) becomes increasingly important as all the low hanging fruit gets plucked (a practical example here being the chat about taking Sainsburys private that in reality appeared based on f'all more than the ready availability of cheap debt vs expensive equity). So much so in fact, given the persistently wave-like nature of M&A activity, I reckon its worth taking away any qualified references to "dividend recaps" and emphasising how a key skill (value add even) of private equity is its ability to spot a dumb banker at 100 paces. That and exploit tax arrangements of course.

Being and not being serious about executive pay

2012-01-29T10:49:00.000-08:00

My initial criticism of the bollocks being shat about the RBS CEO’s bonus was primarily that it pandered to the media’s dumbing down agenda of reducing everything to personalities an approach personified by the ghastly as he is vain Nick Robinson. It’s also a disingenuous attempt by posturing politicians to pretend they’re doing something, when they actually aren’t. Except they are. At this “historic juncture” I reckon what’s so fucked up is that this bonus furore distracts from more serious (and complex) underlying issues.

So lets start with some facts. Early last year the HSBC CEO got a £5.2m bonus and the Barclays CEO got £6.5m, the latter being famous for stating "(t)here was a period of remorse and apology for banks and I think that period needs to be over". Neither had as fucked up an organisation or as many stakeholders or pressures to deal with as Stephen Hester i.e. Hester is doing a harder job for less money than his immediate peers and even if these other bods waive their bonus this year, they’ll still have oodles in the bank from 2011. Plus there’s also however many dozen more hedge fund managers and traders raking in more than Hester except they’re currently doing their damndest to go Greek on Greece. So is Hester the unacceptable face of an over-paid, if currently state backed, capitalism? Nope.

Despite this Hester getting pilloried in the press allowed some rim-jockey retard on the Guardian website to state he should only get paid as much as a primary school headteacher, a primary school and a global financial conglomerate employing >100,000 people being apparently interchangeable institutions. Alternatively, such fucktardness illustrates the level of debate underway, one that ignores dull stuff like Hester could walk into an easier job tomorrow that pays him as much or more than he’s getting and do so whilst being widely regarded by his peers as the victim of a witchhunt. It also ignores even duller stuff like the RBS share price and credit rating would get humped due to the management upheaveal this would cause and the resultant perception of political interference i.e. the posturing going on right now would cost the taxpayer a damn sight more than Hester’s bonus.

Really what the above illustrates is how fucked up politicians have deliberately made things. The issue IS NOT should Hester get a million pound bonus, instead it’s whether the system that sets executive pay is working and to a lesser extent is Hester the right person for the RBS job. The second of these is easy to answer; given the RBS board and UKFI both seem happy with him, yes he is. The first part is the far more complex problem, because no it isn’t working and is in fact a growing social problem, but one no major politician appears willing to seriously address.

Rather, to get a sense of scale about what's going on you need to read the Bank of England Governor Mervyn King’s comments from the other day: “Above all else, we must strive to maintain support for a market economy and an open world trading system. They provided the basis for the great prosperity experienced since the Second World War. The tragedy of the financial crisis is that those who have suffered most have been those who bear no responsibility for it, and who, whether employees or businesses, accepted the disciplines of a market economy only to find that others were excused that discipline because they were “too important to fail”. But the legitimacy of a market economy will inevitably be challenged if rewards go disproportionately to a small elite, especially one which benefited from the support of taxpayers. Those taking decisions on remuneration, in the financial sector and elsewhere, need to understand that a market economy rests not just on incentives, but on the acceptance that the distribution of rewards is fair. That sense of fairness underpins the commitment to a market economy” i.e. the basic legitimacy of Western capitalism is being called into question.

Crikey, them’s big potatoes. And the political response so far? Wouldn’t it be nice if things were a bit more John Lewisy and that RBS bloke shouldn’t get a bonus should he.

What this leaves us with is a seemingly untouchable economic elite intent on remaining just that thank you very much and a professional political class too removed, too ignorant and too power-obsessed to appreciate let alone articulate a growing degree of discontent and disenchantment that can only grow as public sector spending cuts persist, high unemployment continues and yer average punter finds inflation is still eating away his or her disposable income, albeit at a slower rate, in an economy where you can no longer borrow cheaply enough to paper over the cracks.

Slightly smaller potatoes would be changing the principles used to set executive pay given the current ones continue to generate economic inequality (not just, as Vincey-tit is largely suggesting, tweaking how the existing participants participate). Are politicians likely to do this I wonder? To give some random examples Tony Blair of JP Morgan and Zurich Financial Services, Norman Lamont, a consultant and advisor to various investment funds, Lord Andrew Turnbull, the former head of the UK civil service who chairs the hedge fund BH Global, or Patricia Hewitt, the former health secretary and an advisor to Cinven, the private equity house that bought BUPA, all seem perfectly placed to help here given their vast experience of both government and business.

In the meantime I reckon the decision of our lawmakers to moan about an individual outcome of a broader system rather than changing the system is already inane to the point of being counter-productive. I mean at least yer old skool Tory knew that to keep taking the piss out us plebs you had to give a little and not do it so fucking obviously.

So in the absence of any meaningful paternalistic gestures here are a couple of suggestions to start the ball rolling. First, draw out the practical lessons from Andy Haldane’s analysis of finance sector pay, most obviously the linkage between it and ROE, and start drawing up regulations that apply them as widely as possible. Also, control for company size in setting executive pay more generally so rewards reflect actual performance.

Second, change the law so that companies can only have one redundancy policy i.e. no more individually negotiated employment contracts for senior and or high earner bods that contain golden parachutes. I’m quite proud of this one cos I thunk it up by myself. Obviously, compromise agreements would be a way round it, so all compromise agreements involving over say £100k should be subject to independent audit to ensure they’re “real” rather than attempts to get round any one size fits all policies.

There. And see what I did with the random examples? Did you? Yeah that's right I was illustrating how cunt professional politicians have a very practical vested interest in preserving the status quo.

Grrr! Executive pay. Grrrr!

2012-01-23T13:21:00.000-08:00

The thing that’s so cool about Sir Shred is how him being such a cunt lets dicksplash politicians pretend they're actually doing something by going on about how ghastly he is, being seen to be doing something being the raison d’etre of the political class. Even better doing so personalises what is a global macroeconomic crisis in line with the mainstream news's fixation with personalities as opposed to dull Reithian crud like educating and informing.

You'd have thought though that the obvious political lesson of the Sir Shred pension debacle was that as politicians couldn’t do anything about it, they should've shut the fuck up and instead concentrated on things they actually could influence. Except that was/is too hard. So instead they chose to avoid dull stuff like ensuring a proper enquiry was held into RBS complete with proper investigations so as to ensure the cunt was legally hung out to dry.

Unfortunately, personality politics clearly remains too appealling, so rather than anything that's actually serious we're still left with politicians a) identifying a specifc individual to be demonised, then b) going on and on about his cash so as to distract from the vacuity of taking such a “political” stance as opposed to doing or coming up with anything that actually matters a fuck. Hence we've Ed Miliband trying to outdo Esther Rantzen as a consumer champion by stating “David Cameron should act to stop Stephen Hester (the current RBS CEO) being paid a bonus of this scale” and Vince – the tit – Cable rolling out a raft of bollocks to supposedly curb executive excess.

Now before going any further it’s worth being clear about Stephen Hester the man who inherited Sir Shred’s utter fucking disaster. See the important bit there? That's right, Stephen Hester had fuck all to do with creating the RBS disaster and is working through it to make as much money as he can for the taxpayer. Some of the chat I’ve also heard is that he doesn’t like financing aircraft largely on point of principle, but that aside he didn’t cause the RBS catastrophe. In fact I mind hearing him, when he was still British Land's CEO, speaking at a property investment shindig a few years back. There, in my view, he provided a superbly realistic and succinct assessment of the UK commercial property market’s prospects. By contrast at the same conference useless auld Martin Wolf’s economic commentary dismissed the then emerging sub-prime crisis as something very unlikely to affect the global economy (the irony here being Martin Wolf subsequently sat on the ICB, whose recommendations RBS is now in the process of implementing). But, in politico land that kind of practical shite doesn’t matter. Much better to go on and on and on (and on) about fat cat banker bonuses etc., and how they shouldn’t be paid.

Except, actually howz about these apples instead, like howzabout a review of current tax arrangements with a view to using the tax system to address the growth seen in economic inequality over the past few years cos that kidna works elsewhere? You know, howzabout mad shit like looking at current taxes on wealth including all capital gains as opposed to how much people earn. Mebbe we could consider introducing differentiated taxes on consumption that take into account the nature and price of the good (relative to comparable items) being bought, like say 5% extra on an Aston martin as opposed to a Kia. And can we really go for tax “efficient” individuals and corporations, like REALLY go for them regardless of how many good lunches they take tax inspectors out for.

There you go. Oops, sorry, that’s too complicated isn’t it? Sorry. Much better to posture like Ed Miliband or come out with utter shite like Vincey boy who’s just issued the following on executive pay:

“Measures proposed include:
• making firms' remuneration reports easier to understand, and requiring them to explain executive salaries in relation to the earnings of other employees (Piece of piss really, “it’s a global market for labour at that level and don’t you know Americans earn far more for doing similar jobs” ya de ya de yada for christ sake please ignore nation specific differentials in top CEO pay)

• increasing transparency by requiring the publication of all directors' salaries (And? No seriously, fucking and?)

• giving shareholders a binding vote on executive pay, notice periods and exit packages - at present their say is merely advisory (as many people have already said asking fund managers to interfere in shit like that is like asking crafty turkeys to vote for Christmas. They won’t and don’t give a fuck anyway cos its only ever a tiny % of a company's revenues/cashflow. Plus they've largely bought into the CEO cult of personality shite so are only bothered with who the CEO is not what he’s paid. As for the Cairn chat, please bear in mind exceptions prove rules, single swallows don't make summers, etc.,)

• encouraging a wider range of people onto company boards, including academics, lawyers, public servants and those who have never served on a board before (Hearing shite like this reminds me of that story about Volkswagon and how they set up a slush fund to provide the trade union reps who sat on company boards with free whores, shopping trips and Viagra. Or rather than buying people off you could simply appoint token idiots. Cetainly, Jeffrey Sachs doesn't appear to impressed with Dambisa Moyo the black woman on the Barclays board)

• requiring all companies to introduce "clawback" policies, allowing them to recoup bonuses in cases where they are later shown to be unwarranted (nah, fair dos that is a goody)”

So yeah, the bollocks we’ve got at the moment is written in wholly cretinous terms as dictated by the media. It doesn’t address fundamental issues like the morality of how the people that fucked shit up for the rest of us are still doing very-OK right now thank you very much and it appears when confronted with shit like the growing disparity of wealth (wealth being different to income), the only response we get is don't pay him a big bonus, don't pay hin a big bonus i.e. a focus on incomes and contractual stuff that can't actually be touched as the Daily Mash spelled out superbly today in a manner I'm guessing is already influencing broadsheet commentary on the stupidity of what's being said.

Like when you think about it you start wondering whether all politicians, either through chance or design, are actually in a give-me-a-highly-paid role-as-a-senior advisor-when-I-leave-parliament cahoots with the cunts intent on fucking us all. I mean the "analysis" and crud being spewed right now is so wide of the mark in its stupidity its got poor sods like me actually presenting what could be construed as partial defences of multi-million pound banker pay packages its that bad.

In the meantime back at the Daily Mash you've got the statement they made about Ed Miliband being a “fucking child” and are left wondering how broadly applicable that is when it comes to assessing the political class’s grasp of what’s actually going on.

Like to give a serious example, why the fuck has Andy Haldane’s utter destruction of using ROE as a measure of bank executive performance no even got a mention yet by any mainstream politicians? Or more broadly should the longstanding association between executive pay and company size i.e. the bigger the company the bigger the wage regardless almost of performance, not be controlled for when setting exec pay? Oops that's too complicated isn't it. Sorry 2x.

Pop quiz

2011-12-15T15:34:00.000-08:00

So you fancy complaining about bad how shit is? Better pick the right country to do it in otherwise your shit might get fucked up bad, hence this pop quiz, which I’ve designed to test your knowledge of where citizens should (and shouldn’t if they know what’s good for them) engage in non-violent demonstrations against the inequities meted out by ruling elites.

So the following is a lightly edited version of an eyewitness account of how, with the tacit sanction of a country’s political elite, the state apparatus chose to treat its citizens. The question is where did it occur?

a) Syria
b) Russia
c) The US

Now, on with the eye witness account – “I was arrested at about 1 a.m. Wednesday morning with 291 other people when 1,400 heavily-armed officers in paramilitary gear streamed in. I was in a group of about 50 peaceful protestors who sat, arms interlocked. The officers encircled us, weapons drawn, while we chanted “We Are Nonviolent.”

As we sat there, encircled, a separate team of officers used knives. They forcibly removed anyone, then yanked out and destroyed any personal property inside the tents, scattering the contents across the park. They then did the same with the communal property. Note that these were the objects described in subsequent mainstream press reports as “30 tons of rubbish” that was “abandoned”: personal property forcibly stolen from us, destroyed in front of our eyes and then left for maintenance workers to dispose of while we were sent to prison.

When the police finally began arresting, we were all ordered to unlink from each other (in order to facilitate the arrests). Each seated, nonviolent protester beside me who refused to cooperate by unlinking his arms had the following done to him: an officer would forcibly extend the protestor’s legs, grab his left foot, twist it all the way around and then stomp his boot on the insole, pinning the protestor’s left foot to the pavement, twisted backwards. Then the officer would grab the protestor’s right foot and twist it all the way the other direction until the non-violent protestor, in incredible agony, would shriek in pain and unlink from his neighbour.

It was horrible to watch, and apparently designed to terrorize the rest of us. At least I was sufficiently terrorized. I unlinked my arms voluntarily and informed the officers that I would go peacefully and cooperatively. I stood as instructed, and then I had my arms wrenched behind my back, and an officer hyperextended my wrists into my inner arms. It was super violent, it hurt really, really bad, and he was doing it on purpose. When I involuntarily recoiled from the pain, the officer threw me face-first to the pavement. He had my hands behind my back, so I landed right on my face. The officer dropped with his knee on my back and ground my face into the pavement. It really, really hurt and my face started bleeding and I was very scared. I begged for mercy and I promised that I was honestly not resisting and would not resist.

My hands were then zipcuffed very tightly behind my back, where they turned blue. I am now suffering nerve damage in my right thumb and palm. I was put in a van with other nonviolent protestors and taken to a parking garage nearby. They forced us to kneel on the hard pavement of that parking garage for seven straight hours with our hands still tightly zipcuffed behind our backs. Some began to pass out. One man rolled to the ground and vomited for a long, long time before falling unconscious. The officers watched and did nothing.”

If you answered (a) you are clearly quite silly because there were no state sanctioned snipers present, shooting random protestors to scare the bejezuz out of any gathered throngs.

If you answered (b), then again your coming with the silly because in Russia, while the mainstream media here is bigging up the political corruption angle and oohh isn’t that Putin a bad ‘un shite, you’ve made the school boy error of confusing an oligarchical society wherein a gangster-capitalist super-elite is given free rein to rape a country’s natural resources and citizens as long as they don’t get into politics with (c) the US where instead the gangster-capitalists, sorry investment bankers, tell the politicians what to do, when and for how long and everyone else gets the big, big wahoo. This, I'm sure you'll agree, is fundamentally different to the way shit is in countries like Russia and what no.

The answer to the pop quiz BTW is (c).

P.S. This post is intended to imply the recent actions of the US state render "democracy" as practiced in that country little different to what you see in other less civilised nations, which our mainstream media typically reports on in terms of their being corrupt and repressive.

It's no an example of wanky liberal moral relativism along the lines of ooh that Bush is just as bad as Saddam so he is. It can't be for one thing as I've never been able to reconcile the absolutist nature of relativism and the fact its the product of specific Western philosophical strands of thought with its use in such a wanky manner. So I never have and that's without even taking say an Ernest Gellner and his cultural universals into account.

Less 1st year philosophy studenty are the facts - in the US if you complain about elite rule and mass economic inequality, challenging mainstream assumptions about how shit is along the way in a manner that begins to gather popular support you get beat down hard. Obviously, yer average American is richer than yer average Russian. But, is that the sole justification that's now left - America is better than Russia because proportionately more Americans can afford to buy iPads?

Read all about it

2011-12-08T10:15:00.000-08:00

That was an interesting story today wasn’t it, you know the one about that bloke and the thing? You know, the thing. Here, before getting too specific some context might help.

So that’s a bank just been fined millions for preying on the elderly in care homes (and presumably a good few of the victims will have died before any compensation gets paid).

There’s a few banks now that’ve been done for running tax avoidance schemes for years.

PPI goes without saying (as does the credit crunch, but then there’s that bank that sold what were presented as super safe investments to things like pension funds, you know pension funds, we put our money into them and then they pay pensions to us when we’re old. Except because the investments had been built to fail, the bank was able to make even more money betting against them.

And let’s not forget the shenanigans where a bank sold products/advice that helped mask Greece’s actual debt levels so it could join the Euro, which doesn’t appear to have worked out very well.

So there’s some cheeky examples of how big banks make money preying on the vulnerable, raping the finances of ordinary punters and actively undermining fundamental aspects of civil society on an industrial scale in a heads those in charge win/tails you lose type style.

Thankfully, no one has gone to prison for any of the above and any fines were or will be paid by shareholders (pension funds again for the most part) via reduced dividends. And if any bankers who took the strategic decisions all of the above required have got the boot, reas assured they'll all have received multi-million golden goodbye cushions to comfort them cos these guys need to be able to act with impunity if they're going to "create jobs".

Oops, almost forgot - the thing was a letter bomb, the intended recipient was the Deutsche Bank CEO bloke.

A (very) modest proposal *

2011-11-30T13:49:00.000-08:00

A fabulous person I know just got a cool new car. It’s pretty nippy, chic even and also very, practical, part of which stems from its small engine that consequently doesn’t incur as much tax compared to the one it replaced. Park that fact for a mo tho and have a look at the Institute for Fiscal Studies (IFS) updated view (see picture above), of what impact the Pre-Budget statement spending plans (and associated forecasts) will have on net incomes in 2012-13.

Now the IFS is cool cos it splits the population into 10 different income groups ranging from poor to rich. Looking at this its clear that - 9th decile and richest aside -the poorer you are the worst you’ll be affected. So we’re all in this together are we? Are we fuck.

Which brings us back to a fabulous person getting a new car. As already mentioned part of this chic mobile’s practicality stems from how in the differentiated tax regime established to influence consumption of this particular type of consumer durable, it’s a winner.

Now there’s an interesting principle especially if, like me, you enjoyed reading Thorstein Veblen’s Theory of the Leisure Class and are mindful of the existence of Veblen (or positional) goods i.e. things that for essentially cultural reasons are more attractive the more expensive they are or at the very least have inelastic demand curves.

Putting these two things together kinda makes you wonder why, in this unprecedented age of sustained austerity when I reckon social cohesion is preferable to teaching more police how to use rubber bullets, the existence of such goods isn’t acknowledged a bit more and taken advantage of by our fiscal lords and masters. More practically why is the VAT charged on Aston Martins the same as on a Kia?

So here’s a thought, howzabout adding say 2.5% to the VAT charged on every new car sold in Britain that costs more than double the median new car price? In fact lets go further, lets step outside the Harrods food hall for a sec and do the same to everything we find on the other floors be it Louis Vuitton handbags, Rolex watches, Hermes scarves and so on and so on (this is totally rule of thumb shit, like am guessing the principle set by stamp duty of charging more the more expensive something is could apply here also).

Now as the title of this post makes clear this is a (very) modest proposal, like adding 2.5% to the VAT charged on such “Veblen” cars as Rollers and Beamers and what no would only generate an additional few million in tax revenue per annum. But, exploiting the kind of fanny willing to happily shell out a bit more to buy something he can show off with strikes me as cool cos it would mean taking more tax off the rich in a way that’s actually in keeping with the “we’re all in it together” bollocks.

And when you think of some of the bollocks bigged up in the Pre-Budget bollocks, the millions the extra raised on handbags and watches and cars and what no is serious moolah compared with the no much to be spent per year on trying to avoid creating an entire generation of unemployable NEETS.

Oh-oh have just thought of a counter argument - this will adversely affect tourism. Except no not really because the non-EU Saudi and Russian dodgy blerks it’d hit can claim back the VAT on UK purchases anyhow. Another option, obviously, would be to eat the rich, except that was one fuckova shite Motorhead song compared to Deaf Forever.

* No babies were harmed in the production of this post

Dinna, dinna, dinna, dinna, dinna, dinna, dinna, dinna ......

2011-11-29T12:29:00.000-08:00

Fuck Guy Fawkes, the Occupy London protest is actually more like batman; it gives you a good feeling knowing he/they’re out there fighting the good fight, just don’t think too hard about it or you’ll realise it’s a bunch of mentalists wearing their pants over their trousers.

I mean seriously, I had a nosey at the protests the other day and the first thing I came across was a cardboard sign claiming 9’11 was a conspiracy. Similarly, a vaguely interesting episode of the Radio 4 programme the Report (broadcast Nov 17th) described how attempts to get the Occupy London lot to support a Tobin/Robin Hood tax had failed because (a) every demand they make requires consensus and (b) as some of the protestors oppose the very existence of banks, a tax on financial transactions was irrelevant.

But, that kind of naïve/stupid/ideological purity at all costs regardless of it achieving nothing of any substance whatsoever/adolescent fucktardness isn’t the point. The actual point is to ignore pretty much anything the protestors say and focus instead on the broader cultural wave they’re riding.

To give just one example here is what a post in the Financial Times FT Alphaville blog said in advance of the Pre-Budget thingy - “The misery can be eased, and the populace comforted, if only Mr Osborne could find a way of making the fattest cats pay more. He underestimates the depth of feeling against this thin layer of full-fat atop the skimmed milk the rest of us are on at his peril. Pay rises to FTSE100 directors, bonuses for bankers at loss-making rescued banks, and rewards to departing failed executives (in both public and private sectors) all fuel the resentment. Austerity is bearable if everyone is paying. If some are seen to escape, then the likely result is something much worse than a few tents outside St Pauls.”

Just chew on that for a second – this is the Financial Times being used to warn the chancellor that he needs to do something about fat cats because of a widespread revulsion about how things are playing out. The Financial Times!

Tomorrow’s one day public sector strike similarly epitomises this broader cultural wave. So sure, sure, you can slag off public sector workers for not living in the “real” world as you make arrangements for getting your kids looked after. You could even compare and contrast “gold plated” public sector pensions with the private sector, ignoring in the process how that simply reflects the weakness of private sector trade unionism. But, again that, as with slagging off the Occupy lot as get a haircut, get a job, have a bath mentals, is to miss the point.

Rather, as at least one teacher has put it straightforwardly to me “why should I have to pay for the mess the bankers made?” It’s a fair question, one that simply isn’t getting asked with any meaning by any mainstream politicians of any significance and certainly doesn’t figure in any of their policies. It also taps into what I think (for which read hope going by the pathetic turnouts in the numerous strike votes) is a broader dissatisfaction with the way shit is wherein the legitimacy of established arrangements – we vote for a socio-economic-political elite to get more and more of everything it wants in exchange for us getting a decent pension, a job, a new telly and a future for our kids – is currently being got tae fuck in a fuck me and you, but never them kind of way.

P.S. No this isn't a plea to view things via some puerile end capitalism now vs give the job/wealth creators everything they want cos we’ll all benefit in the long run dichotomy, not least because in the long run we are all dead.

How to win the class war

2011-11-22T15:02:00.000-08:00

The key to successful class rule is that to its subjects it feels effortless, painless and natural. So ideally then it should be conducted by charming and charismatic people, something Stewart Lee's recent routine about him and David Cameron at Oxford University* captures beautifully. Unfortunately, every so often some upper/ruling class numpty comes along and gives the game away.

And so it was with Dr Heather McGregor. I'd never heard of her before, but if you go here you'll hear her trying to defend the thousand-thousand percent increase in executive pay as exposed by the High Pay Commission. For McGregor the argument is something like having staff sit as pension trustees equals worker representation and anyway if you wanted a workers' co-operative you should go to Cuba. So that'll be artifically imposing a false dichotomy then to distract from what most people want, which is (a) not to have the pish ripped and (b) some real linkages made between performance and reward.

If you go here though, you realise Dr McGregor is (a) upper class and (b) a fucktard whose given the game away.

"Here" refers to the speech she gave to Rodean school in 2009, Rodean being the female equivalent of the Eton school*, which she presumably attended and where and I quote - "She advised the girls, ‘Leave with this sentence tattooed on your head: “I can’t do it alone”. What is very important is to reach back and pull up the people behind you – and especially the people you were at school with’.

So that's alright then. Democracy? Meritocracy? Equality of opportunity? Fair play even? Nope, for this executive head hunter i.e. one of the people that helps identify the UK PLC CEOs that've been the getting muti-thousand percent pay rises, its old school ties and old school chums all the mutha-fuckin way. Bit of an own goal that.

* S'funny. Writing this I originally referred simply to Oxford, Rodean and Eton because those ruling class making machines are so engrained in our national pysche there's no need to state the type of institutions they "actually" are. Naturally.

Technotastic

2011-11-14T13:20:00.000-08:00

So are we moving from democracy to an era of technocracy? No not really, but it makes for better headlines than describing shit as simply the existing form of upper class rule is acquiring a slightly different public face in selected locales. So sure sure, the Webbs, those Fabian bods who founded the London School of Economics to produce better 'administrators, whether in commerce and industry, or in the national and municipal Civil Service' are probably doing cartwheels in their graves at what’s happening in Greece and Italy where terribly well qualified men (MEN!) well-versed in the ways of multinational bureaucracies are now in charge, its just on closer inspection so what?

The 2 good criticisms I've read of this swing to technocracy flow beautifully into each other. Oh hang on there’s a third that’s actually getting more attention about how it might challenge democratic institutions so lets deal with that one quickly; no it doesn’t. There will be elections in due course. The notion of DEMOCRATICALLY elected parties appointing technocrats being a threat to democracy is a fucking childish argument that distracts from far more serious critiques and anyone making it should shut the fuck up because they are a headline spewing, analytically incontinent fucktard.

Right back to the shit that actually matters.

Critique 1 is Professor Paul Krugman’s: The technocrats being given power to save the day are actually technically incompetent (“the trouble with the alleged technocrats we’re supposed to rely on isn’t just that they’re uninspiring — it is that they have been wrong about everything, again and again.”).

Critique 2 follows on from the above and was made in Private Eye issue 1301, which notes the new boss of the European Central Bank was previously a partner in Goldman Sachs while the new boss of the European Financial Stability Fund previously worked in hedge funds.

Putting both critiques together then the main qualifications the technocratic white knights now charged with saving the day appear to have is that they were the buggers who designed, tweaked and or worked within the fundamentally flawed system that is now fucking up on a monumental scale and when they weren’t doing that they were making themselves fortunes via the private financial products and financial institutions that fucked it up by exposing its fundamental flaws in the first place. Bonza!

A side note here is Professor John Kay’s neat wee note on how investment banker influence over the polity appears to have grown as the actual number of investment banks has declined, but that aside the wee interview with Sir Howard Davies, a former head of the Financial Services Authority and self-confessed technocrat, today on radio 4’s PM highlighted a range of interesting issues.

For Sir Howard, the good thing about technocrats is that they are people able to take the right or best, all things considered, decisions. Which is lovely I guess except it completely misses the point.

Sticking with Greece and Italy the actual point is not what decisions are taken, who takes them or even the decision-making process (as the third fucktard critique might fixate on), rather its whether decisions actually get implemented once taken.

Britain has an advantage here over Italy and Greece. As Daily Mail/Telegraph critiques of UK civil servants gold plating EU legislation makes clear, the British government tends or at least is more likely to be believed when it says that it will do something. By contrast, whereas the fiscally fucked Italian and Greek governments may be voting on however many austerity packages, a general view is simply aye right and we’ll believe it when tax dodging stops being a national past time.

Now, how appointing a technocrat will resolve that kinda ingrained, institutionalised, common-sense, mindset shit is beyond me given the nature of the political process. Like when a technocrat says raise taxes 20% who gives a fuck if the tax collectors choose to take a bribe instead regardless.

And resolving THAT kind of serious shit requires a clear, grown up view of politics which is that it’s not about technical competency, rather the art of the possible is about marshalling vested interests and interest groups, using patronage and bureaucratic power and authority. Now whereas a Vladimir Putin might say that, Sir Howard politely chose not to.

Alternatively, the approach being taken here is put in place some technocratic patsies who can in turn be blamed for taking nasty decisions no one likes so they can be voted out in due course (see, see, you threat to democracy fucktards?). Except, again that doesn’t matter if the implementation is a joke. But, if that is the case, then it fails to recognise that for patronage i.e. politics, to work you need to know the patron will still be there in a coupla years to hand out the patronage gravy, otherwise why do what he says?

Anyhoo, to summarise, the technocrats now being installed appear pretty shite on technical and moral grounds, we’re getting fed shite as to what them being appointed means, its not clear that the institutionalised issues underlying specific nation state problems are actually being addressed, appointing a technocrat has no impact whatsoever in itself on the fundamental role vested interests have in politics and how cool, being a blerk, must it have been to go to a Bunga Bunga party?

A wee P.S. here is provided by the Italian government’s latest debt sale. So there was me pointing out the difference between implied yields and reality in response to people going on about Italy having to pay more than 7%. Turns out they haven’t had to pay more than 7% after all. Boo, what a dull headline.

Plus, what does that say about the efficacy of markets given the above questions that can be raised about the technocrats who are otherwise being used to justify the reduction in borrowing costs? (here's a clue - that the people pricing this shit are stupid cunts for the most part who should be held at a remove from important decisions or anything that can impact government policies)

Memory loss

2011-11-10T12:59:00.000-08:00

Ideologically, the pro-occupy argument is so much more advanced in the US than it is here. Here, the we are the 99% riff gets played to be sure, but without much gusto cos there’s too much down with all bad things everywhere vagueness plus predictable Trots and what nots in the way. Hey ho.

But, I think something that appears to be missing from even the US schtick are memories of the Dot Com bubble. Remember that? You know, the period from 1995 to 2000 when there was a seemingly new paradigm on the horizon.

The thing about the Dot Com bubble was how it once again brought the following quote from the 1920s to life: “A visitor was being shown the wonders of the New York financial district, and his guide pointed out some handsome ships in the harbour. “Look, those are the bankers’ and brokers’ yachts.” “Where are the customers’ yachts?” asked the naïve visitor”.

New paradigm or not (not) the self-same heads they win tails you lose thang was abundant during the Dot Com era. Venture capital houses raised dosh from investors then pissed it all away on utter dog companies. But, that’s all good cos the 2 + 20 of a 2% charge on all funds raised (and 20% of any eventual profit) meant it didn’t matter if the company was a flop cos the sheer act of raising a fund made those financiers mucho dosh.

Then there were the investment banks; to make the big money from a dot com thing you needed to go public i.e. sell shares to the public via an initial public offering or IPO. The investment banks made this happen, charging big fees in the process. Even better, investment bank analysts bigged up each IPO in public at the same time as telling people in private it was an utter dog to avoid. And so it was relatively average people pissed away millions investing in utter dogs.

Now d’ya see the common pattern emerging here? You invested in a venture capital fund. They make money if it’s a donkey or no.

Next, you bought shares in an IPO – and again the investment banks organising it make money if it’s an utter donkey or no.

Essentially, the Dot Com bubble was about transferring money from rubes/punters/schmucks to whoever set up the mickey mouse companies in the first place AND the financiers involved in sorting them out for an IPO, boosting their prospects and then selling them on with huge, hypocritical conflicts of interest all over the place.

For me the Dot Com bubble is another relatively recent example of how the sexier, higher paid end of the financial system tends to ass rape ordinary people while charging them a commission for the “pleasure”.

So sure, sure the assets and type of transactions were different and the fact the Dot Com bubble was about internet entrepreneurs and financiers fleecing a greedy middle class of its savings limited its economic impact. But, still a mentality was on display then that I reckon is still very much in place today to the point of being deeply institutionalised; these fuckers don’t give a fuck about consequence and will fuck you over raw to make themselves big money. As such I wonder to what extent the organisations involved should be considered an open threat to the actual economy and be treated as such as a result?

Not rocket science pt 2: Losing interest

2011-11-09T13:20:00.000-08:00

Having spent the last wee while going thru another one of they “your job will not exist from this date onwards, but there’s these other lovely jobs you can apply for” reorganisation thingies, I've been too distracted to write anything vaguely coherent. Now I know the mortgage payments will be met for however long it is until the next reorganisation, I reckon its time to do another not rocket science thing, this time on bond yields and the Eurozone crisis.

First off the big thing here is the sheer volume of disinformation that’s going on. Like up until well the other morning really when Evan Davies on the Today show finally admitted he was confusing things, nearly all the mainstream media headlines about Italy and its cost of borrowing were a simplification of reality as distorting as they were out of context. Like seriously.

Not being a corporate financier I’ll also explain why in simplistic hypothetical terms, but hopefully ones less bollocks than those most people are using. Here goes;

Italy wants to borrow £100. It does so by issuing a five year bond for £100 that will pay whoever buys it i.e. whoever lends Italy £100, £5 or 5% a year for 5 years at the end of which the original £100 is fully repaid.

Oh oh, the original buyer of the bond sells it to someone else after a year because there’s a sovereign debt crisis going on and all of a sudden it’s not looking as likely as it once was that Italy will repay the original £100. Plus there’s only 4 more years worth of 5% payments to get as well.

So now I buy the £100 bond for less, a big chunk less, say £50. But hang on a mo this £50 has bought me an asset that yields an annual payment £5 i.e. the implied yield is 10%. Bonza! Just try getting that off a cash ISA these days.

In the meantime what do Italy care – it got the original £100 it was after, still has it for another 4 years and is still only paying 5% per annum. It was the original buyer who sold the bond for less that took the loss and felt the pain. And it’s the implied yields NOT Italy’s actual borrowing costs, that've just reached “crisis” levels.

The implied implication is that if Italy was to try and borrow more today, then it would have to pay current yield rates i.e. the 10%, except that cheeky wee word “if” highlights what’s actually going on here – the yield on existing debt doesn’t reflect Italy’s ACTUAL borrowing costs. What follows on from this is a number of things:

- The tenor of Italy’s debt is the crucial thing to be concerned about i.e. how much is maturing over the next 12 to 18 months and will need to be replaced with fresh bonds.

- The reporting of this has for the most part concentrated on generating distorted headlines, op-eds and articles that favour current English government economic policy (cut spending to save Britain’s AAA rating and so on) and the interests of bondholders.

- A fuck of a lot can happen in a week let alone 12 to 18 months.

One other wee sneaky bit that also warrants much, much more attention is the interest being taken in PIIGS government debt by speculators, hedge funds, vulture funds etc., This lot are already buying up cheap government debt because they’re taking a punt on being able to get high yields now and the thing completely repaid later (i.e. for more than they paid for it). Double whammy!

A couple of things follow on from this given the Greek example wherein billions of Eurozone taxpayer funds from other countries are already being handed over to Greece so it can repay holders of Greek government debt (i.e. its bondholders). One is that the speculators doing so are immoral cunts. The other is a nice neat straightforward demand – can a publically available record please be maintained that details:

1) Who buys any piece of government debt
2) How much they paid for it
3) When they bought it

Doing so would perform a VERY important risk management function cos it would enable anyone at any time to know who exactly was on the hook and for how much to whatever economy is in potential crisis.

Making that kind of info available would also do other sorts of mad stuff like make perfectly clear how rational (or not) markets were behaving and consequently whether crazy things like some government buying up its debt on the cheap to effectively cancel it out is an option e.g. the European Central Bank lends Italy £100 at 5%, Italy then uses this to buy 2 tranches of £100 5 year bonds currently trading at £50 each and hey presto its debt is halved.

It would also let us all know who the cunts were that were taking punts on national economies so we could pitch our tents up outside there head office. They will, in their defence refer to the “liquidity” they provide i.e. those wanting to offload Italian bonds can do so. Except so fucking what, like seriously, so fucking what. Head teachers here are about to go on strike for the first time ever because of the sacrifices they are being expected to make and some multi-millionaire cunt considers the ”liquidity” him taking a punt in the hope of making millions provides to be sufficient justification for taxpayer rape? Fuck off.

P.S. My understanding is Italian debt levels aren't really the issue here, rather its that the country is bent from the top down, which is scarey bsicuits because institutionalised bent-ness is awfy hard to remove due to all the vested interests it involves.

Black is white and up is down

2011-10-05T15:38:00.000-07:00

So hang on how does that work then - so Italy has just been downgraded, the most recent British economic growth figure was just revised down from no much to hee haw, a well chunky continental European bank (Dexia) is about to be broken up, part-nationalised and recapitalised and what no, its no looking like Greece will get the latest tranche of the bail out cash it needs to meet its immediate bills (meaning it default time bucko), big French banks appear to be selling off some of the good shit on their balance sheets on the QT to reduce their funding needs/get some cash pronto and there’s now scarey chat about Morgan Stanley, that US investment bank monster – like that’s a few of the things that appear to be happening right now and yet the FTSE 100 share price index ended today on a relative high - Whit?

Ahhh, hang on I think I’ve got it - so yeah, sure, whereas just one or two of the above occurring between 2001 and 2007 would have prompted all sorts of shit, now (a) the global (ahem, the Western) economy has been staggering from one fuck up to the next on a daily basis for years now, who gives a “shock fatigue”. Plus, (b) shit has finally got so fucked up the Euro-zone leaders will have to sort it out in a the more bad news the better type style.

Which is cool I guess and explains the uptick in share prices except for a few very obvious points:

1) Dexia passed the recent European bank stress tests e.g. there is no methodology in place at the moment for identifying in advance if a bank is a potential basket case – so by definition then, every bank could be a basket case ………aarrrrgggggghhhhhh!!!!!!!
2) EU Bureaucrats live a life of splendid isolation from reality. There is not that much pressure on them to sort shit out.
3) The Euro-zone is a big sack of cats and as such an utter nightmare to sort out. Read something today about how Malta’s approval was still needed for something and yer like Malta? Aw piss fucking off. And yet by the power of Castle Greyskull (and EU legislation), that’s exactly the kind of rigmarole that needs to be gone through before anything gets settled. And sorting it will take months as opposed to teh seconsd it can take for confidence in specific instutitions to evaporate.
4) The private sector, well actually the financial sector is essentially vaguely more positive because its now assuming the public sector is going to sort shit out – except hang on a mo, like how dat work? So we need private sector this, that and the other in the good times, but when it comes down to it, its government (well Germany really) that’s needed to sort shit out when the private sector fucks up? Hmm, there’s a cheeky wee double standard there.

The other thing of course is that the now hoped for Eurozone response is essentially that the great and the good will finally cotton on, cave in and accept that there needs to be a big, new means of putting taxpayers on the hook for life for bank debts/mistakes/fuck-ups so the financiers will stay happy. Yeah, ordinary, tax paying punters Nil, bankers 14 (at the very least).

Sorry, did I say that? What I meant to say is we can expect to see a co-ordinated round of bank recapitalisations with this strategy a sensible means of resolving the current volatility and shoring up confidence. More importantly, the instigation of a programme of targetted public sector investments in the stability and credibility of specific, national financial systems and banks will pay real dividends to taxpayers in the medium to long term.

I found it!!!!!!!!!!!!!!!!

2011-09-19T11:49:00.000-07:00

No really, I did. If you click here you’ll actually find some UK coverage of the #OccupyWallStreet protest, not much to be fair, but still it’s a start I guess. But, why so little?

Quick background; the Wall Street thing originated on the internet where some folks said hey lets occupy Wall Street beginning September 17th in a Tahrir Square type style and keep protesting until our demands (I think the biggie is to reduce the US financial sector’s undue influence on the democratic process in the US) are met. So yeah, twitter is involved big time and presumably Facebook, the globally famous hackers anonymous have bigged it up and so on. And yet, despite all that its being virtually ignored by the UK media. Howcome?

Like any protest where there’s even the slightest sniff of internet involvement got majorly bigged up previously, first in a positive way as with events in the Middle East and latterly, with the discovery that scum rioters love dem blackberries, as a potential bad thing.

Yet this one seems to be getting almost totally ignored. Perhaps, it’s because the trope journalists established of shoe-horning actual political and social revolutions into a banal discussion of social networking is now considered passé?

Cool I guess, except given this protest originally hoped to attract 20,000 protestors, but has so far drawn way less than that means it’s a perfect example of the internet’s limitations. So like shouldn’t it now be cited as such? Or would that be to highlight the facile nature of how events in the Middle East were originally reported?

Mebbe’s aye, mebbe’s knaw, but then there’s the media savvy nature of the protest itself. Well when I say media savvy what I mean is the pop culture references like protestors wearing Guy Fawkes masks for one thing and making posters based on meme cartoons for another. But, still, isn’t that of interest, like the translation of internet geekdom into actual boots on the ground is worth some attention isn’t it?

Not really it seems because its party conference season right now so actually the important stuff is what are the personal tensions in the ConDem coalition and can Nick Clegg survive over the medium term. This will presumably be followed by Miliband eh? Howz he doing as Labour leader and will he survive until the next election (give or take some will he/won’t he support the unions strike plans angst [the answer is of course he fucking won’t]) and gawd knows what it’ll be with the Tories, though presumably any Boris Johnston speech will get bigged up along with him as a potential challenger for the leadership in a lets ignore policy and wank over personalities instead type style.

I guess the other thing of course is the self-censorship thang; bigging up the role twitter played in Egypt is all very well because (a) some half-wit has decided doing so connects with some half-witted 3G demographic and (b) involves fuzzy wuzzies so is sufficiently abstract, distant and alien to be considered “safe”. By contrast, paying attention to white people occupying a financial district is presumably a wee bitty too close to home for comfort and as such best ignored for the time being.

There again UK Uncut ain’t making the UK headlines anymore either despite the fact its still up to shit and, given the recent announcement of however many more tax inspectors being taken on to get evil on rich cunt tax dodging asses, could be considered to have influenced both the political debate and actual policy in nice actual ways.

So yeah, we really are getting screwed I guess, by financiers, politicians and media and not in nice, thoughtful, caring ways either.

An October 2nd P.S. - so the occupy Wall Street protests are finally news now that hundreds of people have been arrested, making it clear (as if this was needed) that no criminality = no mainstream media attention when it comes to public protests and all that means in terms of a tacit incentive to protestors/media value systems and selectivity.

It would be nice if the fact the protests were inspired by Tarih square was at least alluded to or there was some coverage of the senior police officer, Tony Baloney, who started attacking women like an Old Firm fan after a game. Unfortunately, that kind of even-handed approach appears out of reach for the time being.

Banker biffing

2011-09-13T12:45:00.000-07:00

Spod Miliband’s call for bad bankers to be struck off made for a good soundbite. Back in the real world, the FSA appears unable to do even its (ineffectual) best to sweep things under the carpet with some of its famous “you accept you won’t take a senior role in a company we regulate ever again and in exchange we’ll not say you actually did anything wrong” specials. The FSA clearly wants to be seen to be claiming some scalps, but it being fucking useless, unable/unwilling to breach customer confidentiality to actually substantiate some of the shenanigans that took place and having a fundamental vested interest in not wanting its own failures exposed means it ain’t getting things its own way. But, then that’s only to be expected – hubris was a fundamental cause of the financial crisis in Britain and the FSA is currently contending with some of the living embodiments of that self-same character flaw, which is where the Independent Banking Commission’s final report comes in.

My reading of the report is straightforward. It takes very, very seriously the moral hazard argument made repeatedly by the Governor of the Bank of England wherein its wrong to privatise profit and socialise (nationalise) losses, by making it that bit harder for banks to end up in such a state that we have to pick up the tab.

Hence, the proposals in the report like British banks should hold mucho more capital than anyone else to absorb potential losses, that lenders to banks should cough up before depositors and on top of that ring fencing off anything vaguely complicated that might suddenly pop up in times of trouble saying you owe me two squillion quid NOW! appear geared to comprehensively avoiding moral hazard in future.

As such they highlight what I think is a fundamental difference between the British approach and that of any other major economy. Like in France (as we could well find out sometime during the next few months), the approach has been to obfuscate i.e.; the government has been in cahoots with the bankers. In the US the approach was blank cheques all round with barely any strings attached cos anything else is Anti-American. In Ireland, its fuck knows, the government/bank/property developer links were so close and so dodgy you just don’t want to go there. No idea about Germany, but then if the French banks go kerphut they’ll presumably be next or almost next in line.

Anyhoo, back in Britain there’s still this same old same old about ring fencing. Like on R4 yesterday the news person trotted out the party line about fencing off risky investment/wholesale banking business from dull, but necessary retail banking stuff and again this simply can’t be reconciled with the reality, which is that nearly all the banks that failed/had to be rescued/taken over in Britain were actual or former building societies that did very little of the “risky” investment bank stuff to be ring-fenced. Rather, the Northern Rock reliance on wholesale market funding outlier aside, they did too much shite property lending. Full stop(1).

But, I think I get it despite that fact; the report isn’t about causes, rather it’s about heading off potential consequences. Do shit property lending? Don’t care you’ve masses of capital. Got a big portfolio of synthetic CDO squareds no one other than some bod with a PhD in theoretical physics understands? Don’t care, they’re ring fenced and you’ve a massive capital base. And so on and so on and ...... what does that say about financial regulation then?

Hmmmm, let me see ………… I know, that it doesn't so much render regulation irrelevant as signal the perceived limitations of regulation and regulators. Or to put it another way if the British banking system hadn’t and didn’t have supine fucktards regulating it, then there would have been no or much less need for the Independent Banking Commission to have made the recommendations that it has.

By the way this isn’t to blame the regulators for the credit crunch in Britain, that was the banks fault, rather its to highlight the regulators as they were and still are are fucking useless, hence when cunts like Spod Miliband talk up some soundbites the accompanying deep failure to appreciate the reality of the situation it implies leaves them looking like tits.

Back to the Independent Commission, you’ve got to love their longer term view on shit. Like when bank mouthpieces squealed about how the recommendations would undermine the economic growth banks facilitate, the commission neatly and rightly responded with a so we leave you to your own devices and get say 4 mebbe even 5 years of reasonably good times followed by a fuck off financial crisis that knocks the entire economy back 6 years? No thanks.

There again given the shit going down in continental Europe right now the whole exercise could prove academic.

(1) This fact also has an international dimension given it was the simpler souls that fucked up overseas as well e.g. Spanish cajas, German Landesbanks and Countrywide in the US, although am guessing some of these also had Irish based debt/capital markets teams that pished away money on US residential mortgage backed securities and related products ie.e investment banky bits.

50% tax rate

2011-09-08T13:09:00.000-07:00

Income is one thing, i.e. what you get paid each month, whereas wealth is another, typically what you own, which for the vast majority means that bit of a house that’s left after the mortgage. So while income is typically a flow of cash received in exchange for selling your labour, wealth is a stock of assets.

Now some forms of wealth can generate income, most obviously the dividend on stocks and shares. And wealth can also become cash depending as when you sell your house, buy a cheaper one and pocket the difference. Similarly, income can be transmogrified into wealth when you use some of it to buy shares and houses. But, still there remains a fundamental difference between wealth and income.

That’s why I got confused by the 20 terribly eminent economists who signed a letter to the Financial Times saying remove the 50% tax rate. Being a simple soul I thought the 50% income tax was simply a tax on income until these terribly, terribly eminent economists started claiming the 50% tax rate “punishes wealth creation by imposing on entrepreneurs and business people a marginal tax rate in excess of 50”%.

I guess, but income tax is a tax on income not wealth whereas wealth creation and its realisation are subject to wholly different taxes aren’t they? Like when you create wealth like a muthafuckin’ entrepreneur the big bucks don’t come from income, rather they come from dividends and selling the business to others. In fact I’m sure some private equity bods are more than happy to advise on the relevant tax efficient capital gains strokes to be played here.

So yeah, I was confused until I saw Roger Bootle was one of the terribly, terribly eminent economists who’d signed the letter. Given the quality of his analysis of well anything really I started to have serious misgivings. Then I saw Patrick the Thatcher guru Minford was also a co-signee, I realised this was simply the same old from the predictable same old.

Now sure the fact one of the signatories is called Ronald MacDonald makes it all seem a bit funny (as well as conceptually flawed at a fundamental level and essentially a statement of prejudice by people who appear to be assuming their qualifications will distract readers from the fact they’re presenting a series of assertions as opposed to a substantiated argument). But, given there’s a PR firm involved orchestrating things, its all actually rather iffy in a leaving a nasty taste in your mouth type style.

The other thing, besides the obvious conceptual failure, predictability of the prejudices being spewed and the fact that rather than argue these terribly, terribly eminent economists are simply presenting the threat of cut taxes or else all teh hedge funds will go away, is the failure to engage with the fact taxation is a matter of political economy.

Oh but they’re being pragmatic, hard-headed and common sensical you might say. I guess, but then if I was focussing solely on my cost base the last thing – given London wages, labour market fluidity and accommodation costs – I’d ever do is locate my hedge fund in London, rather it’d be Swansea all the way.

Except that’s a fucking stupid idea; I’d still set it up in London because (a) Swansea is ghastly and (b) business locational decisions take into account a much broader range of factors than the immediate cost base; there are additional medium to long-term structural things like say physical proximity to clients, access to expert labour and say the kudos of an office in Mayfair, that simply aren’t affected by temporary tax rises. In fact, given shit like that it’s us that have got the high earners over a barrel for a change.

The other thing these cheer leaders for doing away with the 50p tax cut completely fail to take into account is the tax’s broader meaning at a time when the all in this together ConDem rhetoric genuinely matters. The context here is that the UK economy was taken behind a shed for a hard, dry arse-raping into what increasingly looks like the second half of the current decade (if we’re lucky), by a small bunch of financiers who are either still in place or early retired off with big pensions the vast majority can only ever dream of; they fucked us without so much as a please or thank you then left us to mop up the slop.

Now whereas yer old skool paternalistic Tory understands pleb screwing requires some paternalistic give and take to lubricate the process if it’s to remain legitimate enough to continue, yer Minfords want the raw shit to continue in perpetuity. And fair play to them I guess except so far what’s marked out civil disobedience in Britain compared to say Spain or Greece, is that its essentially been different types of fanny acting up, be it students or latterly neds/chavs. Except, given every new economic forecast seems to be worse than the last one, if you really do want to start unpicking even token gestures of fairness, then I reckon you should at least (besides providing an accurate account of locational decisions and acknowledging the conceptual flaws of your argument) give some thought to the potential broader social and political ramifcations. If no, then you’re a fool.

Stuart Waiton is a joke

2011-09-08T12:57:00.000-07:00

Freedom of speech is a wonderful thing and should be cherished, always. But, can someone no take Stuart Waiton aside and tell him to shut it cos his chat about the Scottish Justice Committee on the Offensive Behaviour at Football and Threatening Communications (Scotland) Bill leaves him coming across like a fool?

Following on from this, a fabulous person was saying she heard him on the radio the other day, which is cool I guess if you’re the University of Abertay press office, until you wonder how much damage his mince is doing to that august institution’s reputation given what I read in the Scotsman.

Stu's now appeared in the Scotsman arguing like a Jeremy Kyle show guest by claiming "this is a snobs law, potentially".

Then Stu is quoted saying "We're targeting, specifically, football fans.... Not comedians, not anybody else, football fans - particularly rowdy football fans, ie rough, working-class blokes and lads who shout and sing songs for 90 minutes, and then go home to their Catholic wife and Protestant grandparents and so forth."

And presumably football fans aren’t racist either cos some of their best friends are black? Like is a professional sociologist actually arguing like Bernard Manning here?

I reckon to redeem himself Stu needs to explain why pubs the length and breadth of Scotland have signs like the one in this post's picture specifically discriminating against "rough, working-class" football fans (as opposed to fans of say rugby or lacrosse ete.) and do so without using the word presumptive. Until then he shall remain an utter, UTTER joke figure.

Bad social science and sectarianism

2011-09-06T12:48:00.000-07:00

A huge problem with social science research is the fact the prejudices of its practitioners heavily influence both what get’s researched and the findings reached. This is further magnified by the self-selecting nature of social scientists; I mean c’mon you need to be a bit daft to do a PhD on something. Finally, some social scientists just aren't that bright.

Thankfully there are good social scientists as well as bad and so it is with the submissions to the Scottish Justice Committee on the Offensive Behaviour at Football and Threatening Communications (Scotland) Bill. The good is Tom Gallagher, whose book on religious tension in Glasgow, The Uneasy Peace, remains a classic and more than justifies his submission. The bad is Stuart Waiton whose now got 15 minutes of fame for being a fool.

Now to set the scene here domestic violence in Glasgow increases when there are Old Firm games. Support for the old firm is periodically associated with ABH, GBH and worse. The old firm encourages sectarianism and bigotry. It sucks up vast police resources and time, creates public disturbances on a regular basis well away from football grounds, its supporters – as Rangers in Manchester proved - are periodically a national disgrace and so on and so on. Alongside this the mentality of many old firm supporters is such that when none of these things occur en masse they want a bag of fucking chocolate drops for not behaving like scum.

Anyhoo, back to Stu; “the civil servant defending the Government’s case argued that this was a ‘public disorder’ issue because if the police were not present then disorder would emerge. This is presumptive and denies a difference between words (however unpleasant) and violent actions carried out by football fans”.

Actually Stu you can go and fuck off. When a dozen lads walk past me in the street chanting hello, hello we are the Billy boys I’m intimidated to fuck and I, along with everyone else, avoid eye contact, look away and/or cross the road pronto because I’m pre-emptively just not taking the presumptive chance of any hassle. When there are police there I don’t feel so intimidated, rather it's like going to the zoo to stare at the animals.

This isn’t presumptive, its people actively managing the situation being inflicted on them and it'd be fucking lovely if there was no longer any need to do so. And is Stu actually suggesting that if there were no police minding the fans waiting to get into an Old Firm game there's be no violence at all?

I've no idea because Stu instead says: “Rather than specifically targeting Sectarian or discriminatory behaviour this appears to criminalise potentially any ‘aggressive’ behaviour at football”. Good. See the point above about the links between domestic violence and football games which also apply to other clubs and signals a culture of violence? D’ya see it? Good. Next.

Ah says Stu, “(i)t is undeniable that many fans are offensive at football games. But this is part of the ‘tribal’ nature of the event itself, and indeed is part of the reason why many people love football”. And this is a good or even just an acceptable thing because………………….?

Unfortunately, the next bit doesn’t explain why:“to conflate football chanting in a crowd with one-to-one personal intimidation is to see criminal activity when none exists”. Nope, there’s no conflation going on here judging by my personal experience or that of every other passenger on a train I was on a couple of weeks back who took turns doing the rictus grin, look away, change carriage (but not in an obvious way to avoid grief), avoid eye contact at all cost lambada until the football fans finally got off. Or does Stu thinks young men chanting in the street, in pubs or on trains as bystanders part like waves before them is neither assertive nor aggressive? Nah am sure he’s not that dumb.

Or mebbe he is: “regarding criminalising fans’ actions, there is constant reference in the Bill to … mail bombs and the attack on Neil Lennon. These criminal activities are seamlessly linked with wider … actions of ‘rowdy’ fans and discussed as part and parcel of the same problem. This would appear to be prejudiced in the true sense of the word where people chanting incorrect slogans in an aggressive manner are connected to mail bombers and those who assault football managers”.

No I think the point is football fuelled sectarianism creates for many (not all) a culture and mind set that can fuse seamlessly with such behaviour. Football matches provide a performative space where this can be indulged, inculcated and reinforced, and the offensive, tribal, love Stu is so taken with, magnifies the supporters feelings towards a readymade pantheon of heroes and villans. If that's a bit arty sounding, the ordinary members of the public who just did their best to let off the bloke that assaulted Neil Lennon highlights the fucking obvious fish and water - one can't survive without the other - links between ordinary punters and extreme actions (1).

I’ll give Stu one point though when he says sectarianism isn’t what it was. The thing is though if you take say labour market discrimination, that’s largely due to the law. Elsewhere, it’s because it was identified as a specific problem then actively managed via things like having Catholic and non-denominational schools in the same areas start at different times so there was less chance of the pupils meeting. Unfortunately, the statistical example Stu uses about how a tim would rather live beside a proddy than a smackhead or a poof, doesn’t exactly have me convinced about anything other than his poor judgement(see the next bit for the apparent legitimacy of such terms).

Oh eck tho cos after this Stu goes a bit weird claiming the bill as it stands is “class discrimination” and discriminates against football fans because “the focus on what could be described as crude and rude words – Fenian, Tim, Hun and so on – which are more part of everyday language amongst poorer sections of society, means that these people are again potentially criminalised for simply lacking politeness or using what is deemed to be politically incorrect language”. Then Stu ends by bigging up Voltaire “I may hate what you say, but will defend to the death your right to say it’.

Cool. I guess. Except that last bit could be used to support all sorts of discriminatory, aggressive language e.g. racist, homophobic and what no, making the real challenge one of finding the balance between that and free speech. Or is the argument being made here poor people have the right to be offensive because they’re poor? I hope not because that’s deeply patronising and dumb given the reason people shout say tim is because they know damn fine well it’s a term of abuse and we wouldn’t want anyone thinking Stu was ignorant, patronising and/or had no meaningful notion of the impact his chosen subject matter actually has on other people (or non-clients as he might put it).

Personally speaking I’m not sure why discriminating against football fans is a bad thing anyway. Overall, they behave worse than any other sport fans on a consistent basis so its common sense to pick on them. Avoiding that issue by saying "class discrimination" simply comes across as using loaded language to avoid dull shit like reality. And to be sure only a minority of fans fuck things up for a majority, but so what given said majority hasn’t been able to sort shit out let alone the clubs or football authorities, which leaves this bill as a last resort.

Alongside that are bigger questions about football in society, like it being bread and circuses writ large with season tickets another tax on the poor. Then there’s the association between it and questionable masculine identities, like have I mentioned domestic abuse spikes after football games?

Whether the bill as it currently stands sorts all that or anything out is doubtful, but contrbutions like tax-payer funded Stu's don't help matters. So yeah, you get some good social scientists and then you get joke figures.

(1) That case in Liverpool where a a jury decided Steven Gerrard had actually given some blerk a right good self-defending (on camera) highlights an interesting broader issue of yer average punter and things like justice when football is involved.

Biscuits

2011-08-31T13:55:00.000-07:00

The Shred Goodwin going off on one about pink wafer biscuits story that’s doing the rounds the now is interesting I guess, so interesting you can read about it here, here, here, here, here, etc., And as is intended it will help sell the book the juicy details are taken from, its just it’s not news. Now by that I don’t mean its not news because it refers to stuff in the past or even that I know a couple of really toe-curling stories about the man. Nope, not me, not on your life guv “ahem”. Nah, what I mean is pretty much everything getting quoted now was detailed here in a Times article dated March 2009 i.e. over 2 years ago when a former employee spoke to the Times and Vince Cable about how the Shred actually behaved.

Now this puts the book being puffed in a whole new light cos it suggest that for the authors deep research equals clicking the top twenty hits on google for Fred Goodwin. This presumably also applies to everyone whose got column inches out of it the past week unless they were even lazier and simply regurgitated whatever they were emailed by the book's publishers, which is a shame when you think about it because a CEO threatening to have people disciplined over pink biscuits actually raises all sorts of bigger issues about corporate governance and corporate life more generally, no seriously.

Here, I’ll give some examples; the story about having an engineer at the ready to switch off the fire alarms when RBS executives fancied smoking indoors (big, fat cigars presumably) firmly equals there being one rule for the workers and another for executives. And being deeply hypocritical it undermines the credibility of those in charge.

Then there's the pink wafer disciplining story itself, which makes me wonder what in fucking christ the HR department was like. There’s this thing called employment law whereas here HR appear to be either the executive's bullying hitwomen or else supine sycophants (did I say or else, I meant both). Now this is particularly “funny” given the RBS HR director at the time was regularly feted by the HR industry as being amongst its most influential figures, which renders said industry’s judgement somewhat suspect as a result.

What else is there … the Sir Shred getting the carpets changed cos they were the wrong shade of whatever suggests someone with an obvious attention to detail, but also a dictatorial, micro-management style with no sense of proportion and potentially psychotic tendencies. So given Sir Shred was voted Forbes global businessman of the year in December 2002, can we perhaps have some management gurus and associated detritus providing a more honest assessment of what “leadership” actually entails (i.e. fucktards like the cunt discussed here)?

Finally, there’s the stories of Sir Shred's personal extravagance like getting fresh fruit flown in from Paris with the guilty culprits here being the RBS Group board. That it was fruit not pan au chocolat highlights the taste of the people we’re talking about here and it’s not good. But, parking that for a mo, the board’s CEO was clearly quite the one for pissing away shareholders cash on his own personal foibles in a where the fuck was was Sir Shred's legendary reputation for cost-cutting when all this was going on type style? So did the board turn a blind eye because they were also rather partial to a nice peach, where they at too much of a remove to know any better, did they take the view that the CEO should be allowed to do whatever he liked so long as the share price kept rising or was the board stuffed with patsies who aren't fit to sit on the board of any other company again, ever? Like what kind of fucking governance was in place here? (oops that calls into question the FSA's judgement doesn't it)

I said finally, but actually besides the obvious point that all of the above questions are generic enough to be asked of any other PLC, for me what’s potentially the real story appeared in June this year. Rather than the current huffing, puffing and titillating about old stories all the while assuming Shred’s pension is some kind of immutable injustice, its the thing about whether his conduct as a CEO broke company policy (or policies) to the extent that he should have been dismissed rather than pensioned off i.e. can the cunt’s package be taken off him, that I reckon is of greater interest. You see it was reported in June (in relation to Sir Shred’s affair with an RBS employee) that he’d “not told any friends or colleagues” whereas my naïve and imperfect understanding of company conflict of interest policies is that they usually entail telling people. Funny dat.

But, yeah, pink wafers eh? Oh how ghastly etc., etc., Thank fuck none of the executives or board members are still sat in big boardrooms scoffing peaches and smoking cigars. Ooops, turns out they are.

The Edinburgh trams are a fucking tragedy

2011-08-22T12:58:00.000-07:00

The Edinburgh trams are a disastrous fuck up of monstrous proportions. I mind it was hearing some council boy talk about how the work in Leith Walk had significantly improved that locale’s internet infrastructure or something in a thanks to the billions spent on NASA we’ve got Teflon bullshite that the magnitude of its fucked-upness became apparent. But, it now seems that its totally sorted and we’ll be getting a tram that goes all the way along Princess Street to St Andrews Square. Whoop di do.

Or perhaps not.I reckon its worth remembering the root cause of the trams being a fuck up was apparent to everyone that had to sit there, stuck in traffic trying to get to work/home of an evening; unbelievably bad management.

Travelling up Leith walk you’d see evidence of this on a daily basis - first an area would be fenced off. Sometime a few days later a hole would be dug and/or materials dumped. Time would pass. More time would pass (heck one hole even got to celebrate being dug and left for a year before anyone did anything about it). Finally, as in the picture above, 6 or so blerks would be sighted by the hole - but rarely a minute before 9 or even a second after 5. One might be having a go with a pick , two would be gawping at the man listlessly picking at the ground or else picking their noses. Of the remaining three, one would be on his moby leaving the other two to read the Sun or have a chat about something. I know this was the case, like tens of thousands of others, because it was what we saw when we looked out the window all the times we were stuck in tram work delayed traffic. And it went on for fucking years. And no it was never a farce because it killed off businesses i.e. it destroyed jobs and livelihoods.

Now, some very obvious failings were going on here. Either the management over estimated the labour required, recruited people with the wrong skills, was incapable of coordinating i.e. managing, well anything really, had no ability to phase the recruitment and allocation of resource and so on and so on in a probably every fault I‘ve just listed and plenty more applied.

Alongside that I reckon the contractual terms were such no one on the job needed to give a fuck; people worked? The contractors got paid. People didn’t work? The contractors got paid. And lets be clear the cunts responsible for doing the contracts was the council and its paid professional advisors.

But, hey that’s all in the past because now we’re getting lovely trams that go right into the heart of the city. Then you read the report just issued and think aw fer fuck sake have they no learned anything?

Wading thru it I liked the reference to the Scottish Futures Trust, the SNP’s not PFI but actually are PFI people, who were consulted about financing the trams. This is all the report says; “In order to assess other avenues of funding discussions have been held with
the Scottish Futures Trust“. Cool, so that‘ll be that wee SNP quango getting to claim its saved even more money it hasn’t.

Having gone thru the rigmarole of chewing the fat with that tax payer funded waste of space and with absolutely nothing to say as a result, the report then details what the actual advisors it commissioned, Inverleith Capital, have to say about borrowing dosh to pay for the trams. Cool, except, lets be honest Inverleith Capital may well be terribly New Town and charming, but could they ever be considered up to a job of this magnitude? Seriously? Like were the references made in the report to considering a bond issue a hastily tacked on afterthought or what?

Anyhoo, then we get the hard sell as to why we need the trams “It is worth remembering that there are significant revenues derived from the tram project that would offset the costs of the project”, which is lovely I guess, but don’t they need netting off against the loss of bus ticket revenue?

But hang on a mo cos “(t)he reputational damage to Edinburgh and to Scotland of failing to complete the project would also be significant and could harm the City’s future investment prospects“. Hmm, no, the damage has already been done and anyway what investment prospects exactly? Like does the council actually think Tesco won’t open another shop or some property developer develop more offices because the council is fucking useless?

Here though is the killer reason “(f)ailure to complete would also have significant environmental consequences”. Except that’s bollocks. Any argument that refers to the environment is pretty much spurious by definition because all the criteria used are so makey-uppy.

The other thing of course is that the environmental and other costs already incurred because of the trams have never been taken into account. Like today the potential introduction of charges for roadworks in England and Wales made the news because they’re estimated to cost the economy c.£4bn a year - now yeah, yeah, that’s another makey uppy number, but the slow down of economic activity due to tram work related congestion, the wasted fuel and general pain in the arsed-ness of travelling thru Edinburgh have cost something, just not anything the council ever factors into its sums give or take the insulting joke of rate relief or what not (takings down 60% on the year Mr Shopkeeper because of the tramworks? Never you mind, you don't need to give us as much money this year). Oh and all those cars waiting at traffic lights has also done environmental damage (the joke here being the Scottish government pissed more money away on posters put up near tram works advising motorists to watch their fuel consumption when stuck in traffic in an insult to injury type styley).

So nah, I’m not convinced in the slightest this is even the least bit sorted, partly because it’s the same old bullshit, but also because I’ve been past the work now ongoing at Haymarket a few times and it’s the same old same old mismanagement shite - men scratching their arses as opposed to doing anything and no much happenning apart from that.

Rather, if I was to try and identify some of the benefits the trams have and will deliver it’s the following; its got me cycling to work cos the delays were that bad and it’s a wonderful example of how economic externalities are defined entirely by politics. Apart from that it’s a bunch of bollocks; it should be stopped and every councillor who voted for it named and shamed, the senior council management dismissed for being grossly incompetent and all advisors/contractors informally barred from winning any government work in Britain ever again until they pay back say 80% of their fees (a type of move I've seen work in the private sector). And the TIE lot can fuck off and die.

P.S. (25/8) - so it's only going as far as Haymarket after all except when the leader of the council said not going to St Andrew's square would be "threatening this city's future financial vibrancy" what in the name of christ did she actually mean? "Vibrancy"? Eh? Whit? What does that mean exactly? Like HBOS and RBS blow themselves the fuck up, but no having a tram going along Princess Street is a threat to Edinburgh's "financial vibrancy"? Is that even a fucking word? For the love of utter christ what a stupid, ignorant cunt (I do like the Labour party bitch move though - vote for it in the first place, then vote against getting something that would provide a vaguely sensible service. Those cunts really have no shame whatsoever).

P.P.S. (23/2) - That BBC Scotland documentary on the trams was pretty good, the one where they identified how the contracts were the main issue and how (lets all blame) TIE essentially lied about the implications of what'd been signed up to. The social worker councillor who queried WTF he was doing supervising it all given his professional experience was also good fun given the stupid shitfer was too dumb to realise the broader implications, ramifications and applications of his don't blame me I know nothing excuse.

Since then though I reckon one of the other main things I was waffling on about still applies cos jezuz fucking christ the actual work is being badly managed. Back when Leith Walk was being pointlessly dug up what really stood out and riled was the ratio between the number of blerks getting paid to do fuck all beside a hole and the length of time traffic was delayed and/or diverted. Now to be fair since then I've seen some examples of blerks actually working beyond 5.30pm. However, on the way to a meeting the other day I also saw a van full of blerks sat reading the paper who were still sat there when I was heading back to my office after the meeting i.e. they'd all earned whatever their hourly rate is for doing fuck all. This is at a time when Edinburgh council is cutting the amount spent on teaching materials for some subjects to something like 20p per year per pupil i.e. fuck all. This is wrong. This is clear evidence the tram works are still being very badly managed at a time when essential services are being cut back.

Thankfully, the Council appears to be destroying records so if there is any enquiry those originally involved will be able to lie through their teeth and/or plead mea culpa to the point where they can get off completely Scot free.

Confidence trick

2011-08-18T14:28:00.000-07:00

The irony is that whereas confidence is everything right now, absoutely everything, confidence surveys are a piece of pish. Partly, this is because they’re all about ordinal data i.e. stuff that can be rank ordered, but not precisely quantified, and as such can never be much of a guide e.g. if I’m a very, very confident consumer as opposed to just a confident one does that mean I’m going to buy 3 new tellies as opposed to one (neither, I’ve got a perfectly serviceable telly already thank you)?

However, its also because they’re based on a stupid premise. How I feel and what I think today may not translate into what I do tomorrow plus how I feel today may well be influenced by specific today things like say the fact the curry in the staff canteen was actually quite passable for a change. And when you start asking people what they think they might be doing in 12 months time, well that’s just pish really.

At best what you might get out of a finely tuned confidence survey is advance warning as to the probable direction of a more significant metric e.g. a downturn in a consumer confidence survey today probably means the retail sales data published in a fortnight will also be heading down. But, then that’s no so much foresight as it is methodology - it takes longer to produce retail sales data than it does consumer confidence surveys.

Despite this all these business sponsored surveys get trotted out as if they were somehow meaningful because of how we get spoon fed economic news. The process this entails goes a little something like this:

1) Company A wants to boost its brand, present itself as a credible organisation etc.,
2) Company A makes widgets, so it pays some people to do a widget confidence survey
3) Company A issues the widget survey with its brand plastered all over it
4) Company A also makes available a spokesperson too thick to produce a widget survey, but with enough chat to talk about the significance and meaning of it
5) News Organisation B needs news. It receives a copy of Company A’s widget survey, gets in touch and gets some quotes. If the survey is considered really important it gets some rent-a-quotes from a range of widget experts in other companies.
6) Repeat on a monthly basis

Everyone involved in the above process has a vested interest in taking it all terribly, terribly seriously - Company A wants to punt its brand, News Organisation B doesn’t want to be seen printing dreck/does want to fill up some column inches quickly and the rent-a-quotes get to ride on Company A’s coat tails.

What we get as a result is distracting shite and noise instead of analysis. Actually its worse than what. The process set out above, especially the uncritical way in which things get presented, has established the survey and the specially commissioned report as a key means of justifying well absolutely fucking anything really with the public sector a big offender here. Hence we get expert reports on the economic benefits of not smoking, Edinburgh trams, high speed rail links, renewable energy and so on and so on, each and every one of them you realise, the instance you look at the assumptions in the appendix, being rotten pieces of shite.

So aye, back to confidence and how it can’t be measured. Well it can sort of, ish, like right now share prices and the cost of insuring sovereign debt against it not being repaid (i.e. the CDS spreads of say Greece compared to Germany) provide bloody good clues as to how financiers are feeling and its scary, scary biscuit time let me tell you in an oh fuck are we going to see another liquidity crisis with institutions no lending to each other again. And if that happens it will fuck shit up for everyone else.

And because we all have a clear vested interest in this I reckon the brute human aspect of what's going on should be drawn out far more than it is. Like fuck the references to high falutin’ financial models, business plans, exogenous econometric growth theories, the need for credible fiscal re-balancing vs consumer deleveraging programmes and what no, essentially, it’s a bunch of people going “fucking hell, fuck knows what’s about to happen” and in a self-fulfilling prophecy type styley holding onto all the cash they can to protect themselves in a way that destroys the circulation of cash capitalism needs to function (oh the joys of individually self-interested and rational actions leading on to a collectively irrational outcome). Probably the only saving grace right now is that it’s a Thursday i.e. there’s only tomorrow left to panic before the weekend stops trading/allows for emergency meetings by the great and the good.

The other point of course is that the same people doing the panicking are typically the same ones who move asset prices in response to waste of time confidence surveys. They do this because its easy, because everyone else does and because they‘re not as bright as they‘re presented as being and don't understand what's happenning, in fact them realising they don't is part of the problem. They and the companies they work for are also the same ones squealing about the notion of a Tobin tax and extra regulation despite the fact the only thing that’s going to sort this shit out is governments i.e. the tax funded public sector, setting out a clear plan and a clear direction.

Anticipation

2011-08-07T14:20:00.000-07:00

Ooohh, tomorrow's going to be dead exciting - if you consider financial stuff exciting - in a what the feck will happen now America's been downgraded and the ECB is in emergency talks.

Was interesting reading the Robert Peston blog on this "Bankers and investors want to see the ECB buying Italian debt, in the way it has previously bought Irish, Portuguese and Greek debt."

I mean obviously we should all do whatever bankers and investors want when they want it. Obviously. However, buying Italian debt in itself wouldn't be enough I reckon. This has worked on a sequential basis with each of the PIIGS economies getting a turn at being baled out. Given this and the driving force here which is bankers and investors want the public sector i.e. us, to cough up so they don't lose any money (at the same time as however many millions are being made by other bankers and investors shorting entire economies), I reckon something bigger is needed e.g. the ECB will also be willing to buy Spanish and Belgium debt or a definition is constructed as to when it will intervene.

Anyhoo, interesting times. I wonder how much will be wiped off the FTSE if there isn't a big announcement about somnething?

2:1

2011-08-06T01:51:00.000-07:00

That being the latest score in the great American football game. Reading the S&P report on why they downgraded America the first (own) goal was the political process itself. In fact the overview emphasises, draws attention to and reiterates how the fucked up debt ceiling debate undermined their view of America:

“We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress … will remain a contentious and fitful process … The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.”

As the brinkmanship was driven by the Tea Party nutters, then that’s one up to the Democrats. However, that the plans were also perceived as not doing enough to cut spending is the Democrats fault, so that’s one all.

But, fiscal policy is also about raising revenues or as S&P put it “It appears that for now, new revenues have dropped down on the menu of policy options”, something that the Tea Party nutters made damn sure happened, so that’s another Democrat goal I reckon.

But, yeah, this is all crazy. Like for one thing a rating agency got it right for a change. For another, how deeply, politically incompetent are the Democrats, like didn’t they learn anything from the health care debacle? And is the probable response here of having a go at S&P, mealy mouthed references to no other agency downgrading them and not saying diddly about raising taxes going to have much effect? I mean jumping jehoshaphat, they're dealing with mentals so perhaps that should be drawn out a tad more. The main quote included here makes clear it’s the decision-making process that’s the primary issue i.e. the way the Tea Party Republican mentals are fucking up the working of the polity. Despite this the Republicans will completely ignore that (along with potential tax rises) so this can all get blamed on not cutting spending enough because, as has already been said, they are fucking mentals.

So now that the previously unthinkable has once again become the actual, Monday will be interesting in share price land, volatile to say the least as the uncertainty over what happens next, aided by the resumption of mental politicking in America, shits on confidence levels. The emphasis placed by S&P on the efficacy or otherwise of the decision-making process is an interesting point with regards to the Euro-zone while here the ConDems will make major big use of the downgrade to justify their policies. Cunts.

Pass the parcel

2011-08-05T10:04:00.000-07:00

You know when pictures like this one start getting used things aren't going terribly well. This time round its a bit of a biggie I reckon and all because of a game of pass the parcel.

Ireland provides a nice example of what this entailed:

The Irish banks did loads of mental lending; when confidence in the financial system evaporated in 2007-08 all the big institutional investors stopped lending to them. Before they ran out of money, the Irish government stepped in and guarantied all Irish bank deposits to stop absolutely everyone taking their money out of them. There was also some support from the European Central Bank.

However, shit done got fucked up already. So because the Irish banks had stopped throwing money at residential and commercial property bubbles, both collapsed. Allova sudden Irish banks were about to lose more money on their mental lending than they could ever afford, so again the government stepped in nationalising here, capital injecting there and buying whole debt portfolios off them to draw a line under the potential bank losses (and give them some cash in the process).

Oopsy, cos all this help fucked Ireland’s economy because after paying out all that cash and taking on the banking system’s problems, allova sudden it wasn’t the banks that were fucked (well they still are), rather the government was suddenly up shit creek without a bail out because it had taken on more than it could manage and now no-one trusted it either (and presumably did some sums looking at total national tax revenues vs. debt repayment costs over a given period of time).

To varying degrees similar processes were repeated across the world. The thing is though all of this was dead easy. Well it wasn‘t, but it is compared to the current situation. When the banks were bailed out, and the debt parcel effectively passed from the private to the public sector, national governments stepped in to bail out their own banks i.e. they looked after their own and did so without needing to secure the agreement of dozens of other nation states. When there was the need for multinational agreement i.e. Barclays and Lehman Brothers or Fortis bank, things either didn’t work out or work very well.

Now though its different and potentially worse for all sorts of reasons including:

For a start, in the past a government stepping in to bail out, shore up, re-capitalise a bank etc., was a soothing, calming, lovely thing, a bit like putting financial market sentiment in a bath with smelly candles. Now? it’s a fucking terrifying prospect, to a large extent because governments don’t have the cash to help out any longer.

That shit with the debt ceiling was a clear sign of Americans being fucking mental. Viewed from over here, the Tea Party lot were previously an uneasy joke. The notion that those vicious, self-destructive, mega rich serving morons are able to influence and disrupt stuff is a very bad thing; there is no cavalry on the horizon

Its far more abstract and clashes with national sentiment; the Greek bailout involved Germany and France ultimately helping out their own banks (which would otherwise have lost squillions due to their exposure to Greece) and meant their companies could still export to Greece. But, that’s abstract and prone to getting lost in nationalistic and political rhetoric - Germany directly bailing out a German bank is easier to understand and gain support for than German taxes being spent filling the whole created by another country’s wasteful ways etc.,

The logistics are a nightmare; its the EU fer crhissakes, all those countries having to get together to review proposals, debate them and then vote is a cat herding process that takes aaaaaaaaaaaages whereas market sentiment and confidence operates in nano-seconds. And anyway any aid figure agreed today will be far too low tomorrow (as the Bank of England special liquidity arrangements made perfectly clear). Plus, if Barrosso’s letter proved anything its that there’s some utter morons involved who, I’m guessing, are more than happy to put their vanity ahead of the global economy so they can get on the telly, however destructive the consequences.

The sheer size of the problem; the credit crunch originated in one part of the US mortgage market whereas Italy and Spain are amongst the largest economies in the entire fricking world.

Anyhoo, the really scary bit comes when everyone stops lending to each other again and even more bits start toppling over. And getting party political for a mo, to my mind it highlights how successful Alastair Darling was as chancellor when he did his drive by negotiations and drew a line under the British crisis, at least for a while. For me the lesson from that experience about what’s needed now is a clear, quick and effective decision making capability, a clear, multi-faceted, all bases covered plan and more financial support available than could ever possibly be used (with plenty of rules to avoid or at least limit the moral hazard). From a British perspective though I reckon we’re potentially fucked if it really starts hitting here; the Tories were dithering fools thru-out their time in opposition during the credit crunch while the LibDems were and remain completely out their league, whatever Vince Cable might say.

Anyhoo, mebbe bond holders will finally get the real humping this time round that they deserve or mebbe we'll see the Euro zone collapse and a run into protectionism. Who knows. On a different note I reckon if the ConDems had really wanted to stick it up Gordon Brown they should have put forward Darling as a candidate for running the IMF, cos he da man.

deja vu

2011-08-04T21:44:00.000-07:00

I mind the weird feeling in my gut and sense of free-falling into fuck knows what or where I had in 2008 due to a combination of watching all the numbers on some Bloomberg screens turn repeatedly red and a constant stream of bad news. Alongside this all the great and the good I talked to just really didn't have a clue what was going on or what could possibly be done.

I had that yesterday after I was daft enough to look at some 12 month trends in bank shares cos I got wondering after reading about first Italy engaging in crisis talks and then that moronic EU statement. Scarey biscuits.

Bitch move vs shitfers

2011-08-02T12:33:00.000-07:00

I mind finding out about the spin that was going to be spun following the takeover of a company - any redundancies would be in the hundreds was going to be the party line, except by hundreds they meant potentially 19 hundred and 99, which any normal person would call 2,000. Except thousand is a nasty word in this context whereas hundreds is much less bad. What reminded me of this deliberate spin was Barclays announcing they were going to be chopping heads again using their own fantastic obfuscation tatic.

To recap an earlier post, this involves announcing X number of planned redundancies one day and another X number of redundancies a day or two later. In 2009 this meant 2,100 followed by another 2,100 a wee bitty later.

The rationale for this is straightforward - in an age of google and lazy fact checking, chances are the two announcements will get mixed up and the total number lost sight of. And please don't think for a second the two numbers being the same was a coincidence, rather query how arbitrary the decision making was behind both totals, like were extra people made redundant to hit that magic 2,100 in one area despite the impact this would have on service quality and stress levels? Or alternatively were 200 or so lame ducks retained in the second wave, sacrificing shareholder funds in the process, to secure moderately better PR?

Anyhoo, aren't financial service sector employers cunts? This time round Barclays are talking about 1,400 followed by a further 1,400 so it could be worse I guess. And the political and public response is .................................... yeah right.

Not rocket science pt.1

2011-07-24T04:24:00.000-07:00

Science is mind-blowingly complex yet vast wodges of it are successfully communicated to us ordinary punters every day via the telly, radio, books and what no. Finance is not as complex as science yet is unsuccessfully communicated to us via much the same media every day as well, which is a shame because finance is continuing to fuck everyday lives every day. I encountered a practical example of this yesterday when a fabulous person explained they couldn’t tell the difference between the stream of gibberish, including the currency cat pictured above, presented satirically as financial news by The Day Today and what actually gets presented to us as news.

Mebbe you could look to the vested interests running thru the core of most of the talking heads presented to us as financial or economic “experts” and how of course they’re going to big up the complexity to justify the need for their apparent expertise. There’s also probably some socialisation shit going on as well in that these talking heads overuse jargon because everyone they work besides does the same. But, feck that I reckon its more constructive to simply spell out some of the shit that’s happened using here the example of monoline insurance and the associated catastrophe that was the monoline wrapped bond.

Oh no I’ve used jargon, except its no really. Monoline insurers are so called because they started off having only one line of business, hence mono. And they’re insurers because well they’re insurance companies. A wrapped bond? Well a bond is simply a type of debt and the “wrapper” wrapped round it an insurance policy taken out against the debt not being repaid cos the borrower(s) defaulted. “Wrapping” bonds like this sounds like a good idea what with the additional peace of mind it presumably gave which in turn made people more willing to lend to those wanting to borrow via bonds.

Except, it didn’t work out that way for some related reasons. One, swathes of the monoline industry sold far more insurance against residential mortgages defaulting than they could ever, EVER pay out against in the event of things going tits up. Two, this reflected the fact the premiums/cost of the insurance policies sold were teeny relative to the amounts being insured i.e. when you’re charging say the $77,500 premium for every $100m insured quoted here, there was never any possibility of them building up the financial reserves needed for a potential rainy day. Three, the monoline insurers piled into insuring residential mortgage related debt like mentals and as a result placed too many of their eggs in one basket.

So they come across as having been fucking shite portfolio managers who didn't understand the market they were insuring; housing, when it goes down the tubes - judging by the periodic UK experience - tends to go down en masse prompting widespread, systemic repayment issues as opposed to selective ones (and that’s no even taking into account the whole sub-prime shite of lending to untested borrowers for which there was no data on which to base an assessment of the default risk)

I reckon the first bit of this needs brought out a bit more though; these insurance companies sold insurance policies that in practice they could never honour if ever called upon to do so. This was nothing to do with the small print or crap like that, rather they never had the cash to pay out without wiping themselves out or at least grossly fucking themselves up. Monoline insurers sold rainy day insurance that only worked in the sunshine; they were fucking shysters.

Even better, I mind reading late last year about one of them that’d had been taken into bankruptcy protection where the people who’d bought the insurance were legally obliged to keep paying the premiums despite the fact there was no way they’d be able to claim on the actual policies. Now that is fucked up.

Its pretty obvious why these monoline shysters did it - they hit their quarterly sales targets and pocketed bonuses before shit done got fucked up. However, the people buying it also got the gravy; they bought some mortgage debt frelated thing for say $X, then got it insured and hey presto because thanks to some accounting rules, its paper value increased to $X+Y so they got their bonuses as well. And when there’s gravy like that to be made so easily no one is going to ask too many questions.

You could dismiss things at this point in a moral huff give and point out how it exemplifies the whole privatisation of profit socialisation of losses thang. You could even refer to bad regulation, greedy shortsightedness, the need to change accounting rules and what no. Except the original rationale for monoline wrapped bonds highlights the wider problems they created for the rest of us. Monoline insurance made it easier to get credit on an incredible scale (this article mentions $125 trillion of monoline wrapped credit derivative exposure i.e. derived from as opposed to the actual underlying debt fer chrissakes). Hence, the above shyster business helped make the bubble we’re still contending with (think say Greek sovereign debt crisis) even bigger than it would otherwise have been.

So given this "product"'s contribution to our current economic woes, I reckon the gits involved should be done for misleading customers or at the very least barred from ever working in any financial services company ever again on the grounds that if they didn’t not act in good faith, then they’re too incompetent to trust (aye right, like either of those things are ever going to happen).

The Financial Policy Committee is now in session

2011-06-30T15:12:00.000-07:00

A deep failing of the former tri-partite arrangement for regulating financial services in Britain was that the Bank of England held formal responsibility for ensuring financial stability, but had no actual means of putting said responsibility into practice. Instead, it was left to cheer or not from the sidelines while the people with actual power - the FSA and the financial institutions themselves - played their deeply destructive games.

That the FSA still can’t manage to publish its report into the RBS disaster provides a practical example of its deep, practical incompetence. That its most senior figures have admitted how prior to the credit crunch they focused too much on the risk attached to individual institutions as opposed to systemic risk (we’re stuck in the arse-hole of a systemic crisis) and did so firmly believing in the efficient market hypothesis (this is noncy bollocks, they simply assumed the financial services industry wasn’t driven by greedy, short-sighted cunts who point blank refused to look further than the next quarter or next half year’s results regardless of whether doing so blew everybody’s feet off), compounds this by making clear they were looking in the wrong direction and didn’t understand what they were looking at anyway.

Thankfully(?), the lovely new interim Bank of England Financial Policy (i.e. stability) Committee resolves both these issues of responsibility without power and regulation by shitwits through its membership, which makes clear who the daddy is these days;

- Mervyn King, Governor of the Bank of England is the chair
- Paul Tucker, also Bank of England, is the chair when Mervyn is unavailable
- Charlie Bean, also Bank of England, is a member as is
- Paul Fisher, Bank of England, and
- Andy Haldane, Bank of England

See a pattern? Actually, it would have been even more pronounced except Sir Richard Lambert, former Bank of England monetary policy committee member chose not to join at the last minute, which leaves:

- Adair Turner, FSA chairman (but not Chair of the FPC and not even its deputy chair) and
- Hector Sants, FSA Chief exec

There’s a coupla other bods, one a retired investment banker who used to work in a US investment bank and the other an ex US federal reserve cunt (err hang on a mo does that mean US banks are viewed as so much of a threat to the stability of the British financial system senior figures are required to assess how much of a threat it is and how to manage it?). There’s mebbe someone else from the Treasury as well, but fuck it, this is a Bank of England production, which is funny cos I mean seriously, the idea that terribly lovely Hector or “public intellectual” Adair could ever hold there own with the Bank of England boys is a farce.

What rammed all this home to me was hearing some Bank of England financial stability bod giving a presentation the other day. It wasn’t so much the content, rather it was their manner; the near palpable sense of excitement about the extent to which the FSA has been made their bitch. Like back in the day the Bank would identify what they considered to be a problem, do some analysis, some charts and what no and that’d be it. Now? The FSA, that’s Adair and Hector, is the Bank of England’s bitch and will do what they‘re fucking told when they are fucking told and fucking like it, which is funny cos I was reading some of the usual financial journalist shit yesterday and they actually thought some of the actions being taken by the FSA were actually FSA initiatives, as fucking if (so there’s been a fundamental shift in power people ain’t cottoned on to yet that needs brought out a tad more than it has been so far).

Anyhoo, if you want proof of the FSA’s new and significantly lesser status just check out the FPC’s minutes and all the ways its recommendations sets out what the FSA will do on its behalf. Like for one there’s tacitly introducing counter-cyclical capital provisioning (at least until the various Basel shite gets sorted), then there’s the FPC agreeing to advise the FSA to tell banks to beef up all their reporting of exposures to sovereigns on an ongoing basis, to provide additional detail on forbearance, the potential threat of the moment, and so on. In essence the FSA has been reduced to the Bank of England’s tool, which is cool cos the FSA is full of them. It also means Hector and Adair are Mervyn‘s bitches. Lets hope he at least uses spit. Actually, given how fucking shite the FSA was and is and how much they still get paid, lets not.

Strike trap

2011-06-21T13:24:00.000-07:00

I’ve always been shite at chess. The only reason I briefly made it into my primary school chess team was when this lassie I played in the chess club made a mistake and knocked her king over in disgust. Oh Arna where are you now I wonder?

But, even me with my shite chess skills I know that with industrial action there’s always manoeuvring going on. The classic example of this was the miners strike. Now take any political position you want and please do remember what actually happened at Orgreave, but that aside dear god the NUM were fucking morons in a hey, lets wait until winter has passed and the government that wants to destroy us has stocked up on coal and made transport arrangements for moving it about Britain and only then go on strike. Jezuz.

Private sector unionism being mostly fucked, a government wanting to cut costs has to take on the public sector unions. And so it seems they are. And again the miners strike provides some useful lessons, the biggie being most Labour politicians will fucking desert them so don’t even waste breath asking for support. Instead call them the bunch of cunts they are and be done with it.

That still leaves the bigger picture thoughe, something I’ve never in any dealings I’ve had with trade unionists had much sense they had much of a fucking clue about. So in the spirit of that here goes;

Government has a 5 year spending plan, you can find out what the headline numbers are here. Key to this is cutting costs on an ongoing basis. The magnitude of the cuts are not something that’s been experienced in the last 50 years i.e. see what’s happening today? Well that’s what’s going to happen tomorrow and the next day and the day after that and so on and its not something you‘ve ever experienced in your utter fucking puff.

To give a practical example, as from something like September this year multi-year public sector pay freezes come into force - now if inflation is 4% this year that’s a 4% pay cut in real terms. And if inflation is still 4% next year then that’s another 4% pay cut. See? That’s an 8% pay cut in total. Ouchy. So shit won’t be getting any better, in fact it’ll be getting worse, permanently worse (or are civil servants dumb enough to be expecting a 10%+ pay rise in 2013 to make up for what they’ve lost out on?).

Hence any government wanting to fuck shit up over the medium-term will provoke a fight now, the idea being it’ll win in 2011 and as a result kick the fight out of the unions who won’t challenge said shit in 2012 and 2013 (or 2014 for that matter). So there, that’s the bigger picture. Its not a “trap” as Ed “Suck-on” Balls calls it, it’s a pragmatic, thought out plan and not one that appears open to much negotiation. Its also one that will presumably see hunners of shite about gold plated public sector pensions being wanked over in the Tory press whereas the reality is that normal sods are being forced to pay for the bank bail outs out of their own pockets. And the fact is if the public sector lets itself get fucked in 2011, then it’ll also get fucked in 2012 and 2013 at the very least in every way imaginable.

As an aside I mind for some reason going to a meeting organised by the EIS in response to the McCrone agreement and associated proposals to do away with Assistant principal teachers and senior teachers. What came across was very clear - the union had given them up during the negotiations and despite a few tub thumping fannies thumping tubs, it wasn’t in any way supporting those affected. What also came across was that the room was full of assistant principal teachers and principal teachers who for the most part didn’t have a fucking clue about how they’d been stitched up or what was coming. If that’s how the public sector is today, then they’re fucking fucked and can go and fuck themselves for being such ignorant fannies.

A 22nd June P.S. - was hearing informally today teachers are now leaving thehttp://www.blogger.com/img/blank.gif EIS in favour of the SSTA because the former hasn't been aggressive enough in its negotiations. Shit could be getting interesting.

A 28th June P.S. - And so it goes. The Spod himself has blogged about how there shouldn't be a strike/the government has cocked up negotiations i.e. a predictable, critical stance formulated to attack political opponents/not alienate Middle England. Personally, if I was a trade union baron I'd (a) ask for my money back and (b) feel an utter fanny for pushing the Spod into the party leadership

Summarising economic policy over the last 6 or so years

2011-06-19T11:01:00.000-07:00

A thing that confuses me is why the main thrust of economic policy isn’t summarised in ways that are honest, open and easy to understand. It’s a pain because if they were, then the rationale behind them could be considered more readily along with their objectives and outcomes. Plus those who stand to win or lose by them would be better placed when it came to elections. It would also provide a useful means of responding to the usual charge of politicians being all the same.

Partly, I reckon, the problem is to do with the Oxbridge way of presenting everything in guarded, coded language. However, the main thing is the political process wherein a third of a party’s MPs are too thick too understand and aren‘t in a position to do anything anyway, a sixth oppose “it” on dogmatic grounds because whatever “it” happens to be doesn’t fit in with their world view largely on point of “principle“. Another third don’t understand it, but do have a sense of there being “something” in place, its just they’re too busy climbing greasy poles to question anything the party machine turns out, which leaves a final sixth who are both in the loop, understand what’s going on BUT know a bald statement of how shit is might alienate 17% of a crucial demographic in 23 marginal constituencies.

It all hammers home the point we get the politicians and politics we deserve. Despite that I reckon the following is a reasonable summary of how shit has been the for the last 7 years or so, which you can make of as you will.

1) Pre-2007 or the Sarah Beeny years; these were characterised by low unemployment, sustained growth, Chinese cheap labour made import driven low inflation and light touch financial regulation that supported a cheap credit fuelled consumerism and asset bubbles, the assets being company values, houses and commercial property.

Ahh, the good times, when any idiot could buy a house to do up, then sell and as long as he or she spent too long cocking it up the market would have moved so much they’d still make a profit (and kid themselves it was all down to their financial acumen).

Alongside this government got taxes from property sales, construction and the financial sector to piss away on grandiose projects like the multi-billion pound Connecting for Health disaster, PFI/PPP shite and a tacit regional policy of inventing all these government call centre jobs that involved redirecting taxes paid by the London and the South East into offices located in ghastly Northern, Welsh and Central Scottish post-industrial shit holes.

2) 2007 - 2010 or Panic Stations; oh shit, the credit crunch! Even instinctive Tories I know think the Labour government handled this well. I agree with them and think its funny cos politically all the credit should go to Alistair Darling. What stands out is the extent to which government was (a) creative in its responses, most obviously with the Asset Protection Scheme, when to address the crisis of confidence in banks it drew an insurance policy line under them, and (b) did so while avoiding the moral hazards seen in Ireland and the US, by making the banks pay for the insurance AND building in one fuck of an excess.

Alongside this government spending was maintained in a counter-cyclical type style to the point where these few years will probably be considered a golden age for public sectors workers - they had job security, good pensions, pay rises and even better benefited from monetary policy.

Monetary policy here had a coupla strands. One was the quantitative easing experiment, a thing economists, then economic historians will be arguing about for the next hundred years. Essentially, this - based on what Bank of England bods have said at shindigs I’ve attended - propped up corporate asset values. Err great.

Alongside this the Bank slashed interest rates to 300 year lows, which meant existing debt became fuckova cheap i.e. more affordable, to avoid hunners and thousands of personal and corporate insolvencies. It also encouraged people to spend cos they were getting fuck all interest on their savings and meant all the fannies that were balls deep in debt were let off the hook as long as they were on a variable rate mortgage.

Sterling was also made to take a tumble because the Bank was hoping to make exports more competitive/prompt an export led recovery because that’s kinda all they know what do to in response to an economic downturn (see fer instance the post Exchange Rate Mechanism experiment period and also devaluations prior to Sterling moving to a floating exchange rate in the early 70s).

3) 2011 onwards - Now is the winter of our …… fucked up discretionary spending and real household disposable incomes gone tae buggery; except, counter cyclical spending can only ever last so long, which is why now that financial markets are volatile, but relatively stable compared to what we saw in say 2008 and 2009, we’re entering into an age of austerity when public spending gets the big, bad, rough wahoo.

Here is when shit should get interesting because the real ideological differences should start to emerge, like this Tory fucktard speaking out in favour of flexing the minimum wage.

Now this is a lovely example of ideology, except, of course, single issues have the tendency to get picked up by and run with by politicians so as to blow them out of all proportion to avoid any debate about the big picture (just like during the election when there was all that pointless shite about how to most effectively tinker with VAT).

But, fuck it. In this new age of austerity lets try and do some big picture stuff. Like in the 6th biggest economy in the world is it right that the wages of thousands of people should be so low they need to be subsidised via tax credits? And why the fuck in such a large economy, relative to the population, should pensions and car for the elderly be an issue? Why is inequality increasing alongside the emergence of these questions and is there any connection between this and the ongoing assault on pensions, employment conditions and what no?

Just some random thoughts I guess. Oh and this Ed Balls shite about is the public sector being lured into a trap - the grotty wee cunt should ‘fess up; Labour doesn’t want to be associated with (a) strikes and (b) explicitly preserving decent terms and conditions of public sector employment. By contrast, the choice the public sector is facing is straightforward - get fucked or get fucked after putting up a fight.

As a P.S. the 1926 General Strike was a bag of shite. The tragedy for the left is that the only general strike to have worked in Britain was driven by Northern Irish bigots, which is why it is perpetually swept under the carpet.

Rings

2011-06-16T13:38:00.000-07:00

Ring fence? Ring piece more like. The UK banks that got fucked during the current credit crunch, got fucked because of the following:

- They were over reliant on wholesale funding (i.e. they borrowed too much money from institutions as opposed to yer average man in the street) to finance their lending, an approach never tested before in a financial crisis.

- The sudden mass realisation US sub prime mortgage debt wasn’t triple A (and no one knew what losses it would actually generate), followed by the subsequent Lehman collapse and associated realisation banks could be allowed to fail, prompted, then drove a global, institutional crisis of confidence in banks. As a result wholesale funding dried up.

- Those banks most reliant on wholesale funding had coincidentally enough also gone mental with their property lending both to yer average man in the street buying a new build buy to let reclaimed land/city centre en-suite yuppie flat, but more importantly to commercial property investors and developers. And seriously, by mental I mean absolutely fucking mental.

- A vicious circle was then rapidly established wherein the mental property lenders couldn’t finance their mental property loans and property prices built on having mental money thrown at them collapsed. This in turn gave wholesale funding institutions even more reason not to lend cash to the UK banks reliant on them because the banks had suddenly gone from having commercial property loans done at say (lets be charitable for a mo) 90% loan to value to holding billions of debt secured against assets with a loan to value of say 130% i.e. call in the debt, sell off the asset and its still 30% under water/a 30% loss on loans where the lenders had only been making say 1% p.a..

- RBS adds a bit of colour to this because it also pissed away its cash buying up a bit of ABN Amro. However, stories like this, this and that suggest it also went as mental as an Irishman with the property lending.

The reason for raking up old coals, stating the obvious etc., is straightforward; it wasn’t casino banking wot dun it for the UK banks that were nationalised, baled out or taken over, it was shit-mental lending and funding arrangements.

This isn’t news, this is fucking obvious. This is shite the ring fencing of banks doesn’t address. Like why the fuck is ring fencing such a big deal as opposed to introducing Tobin taxes for all the rentier casino bank financial activity that does nothing but generate volatility, add a commodity price premium we all have to pay and generate otherwise avoidable transaction costs simply to finance commodity/derivative/currency trader bonuses?

I reckon its due to politics and prejudice. Rather than tackle, address or more importantly redress the actual causes of the current fucked up British economy, ring fencing keeps the focus on the casino banking rhetoric and all that entails in terms of bemoaning the multi-million pound bonuses paid to well not that many people actually.

Now personally, I’d be happy enough if the few that did get the big bonuses got fucked roughly into a cocked hoop by a horse-cocked gorilla with anger issues. Except I don’t see ring fencing affecting them in the slightest (unless it increases the cost of capital associated with their activities and hey presto they become less profitable/generate smaller bonus pots), rather they’ll be moaned about in political soundbites, but otherwise left to their own devices.

What ring fencing will do though is let politicians claim they’re doing something, anything even. And by doing so politicians will be able to avoid actually doing anything about the cunts that caused all the problems for the British economy in the first place. Like why aren’t the mentals involved in all the mental property lending being strung up by their balls around Trafalgar square? Don’t worry we’re ring fencing casino banking. Aren’t banks continuing to lay off tens of thousands of staff who had fuck all to do with the losses? Don’t worry we’re ring fencing casino banking. And so on.

And if you really want to identify who made the big bucks out the bubble, it wasn’t actually bankers. Check out property week instead which will give hints to the mental property lending that at its height involved shit like:

Some joker sets up a Special Purpose Vehicle (SPV) i.e. a standalone company/legal entity

Said SPV borrows say £90m to do something involving property with the Joker/founder chipping in say £10m. In the event of things going pear shaped well tough cos there’s no recourse to any other assets the Joker owns what with him having a proven track record, being terribly sophisticated, having invited very senior bank bods to his daughter’s wedding and what not.

That’s day 1. Day 2 the SPV uses the loan to pay the Joker a £20m dividend thus making sure he gets all his money out plus another £10m.

Day 3, who the fuck cares, the Joker has already made a 100% return/£10m. I don’t know, mebbe the SPV buys a portfolio of Belgian public toilets or mebbe a shopping centre. Does it matter? Yer man has already made his money and then some with no recourse to his other assets if it all goes tits up.

Day 4 the bank declares big losses on Joker loans that have left big holes in the bank's balance sheet. The taxpayer bails out the bank, filling in all the multi-million pound Joker holes.

So yeah, ring fencing, casino banking ya de ya de ya avoid the issues, doesn't point any well deserved fingers and so on. Cunts.

Best not

2011-05-31T14:07:00.000-07:00

All the shite about bankers being bastards is fair enough I guess, like yesterday I kicked an auld cripple in the face just for the hell of it. But, for the most part, the vast majority of those working in British banking today don’t get the big wages and big bonuses that make all the headlines. I reckon for the vast majority a chunk less than the national average topped up with performance related bonuses that aren’t pensionable constitutes their total, annual earnings.

Of course that’s a shite story for the papers so its probably best to keep schtum about it. Or at least it was until the RBS head of UK corporate banking went rogue. Like according to this mad, maverick man, the average tenure for RBS business managers i.e. the bods that go out and about trying to arrange loans and bank facilities for corner shops, is 12 months. This was a bad thing it seems because it got in the way of relationship banking, hence business managers will have to go out and work in a small business for a coupla days a year to make sure they empathise with and understand their clients.

Really? Like is that the answer? I thought the real issue here is why the utter fuck are business managers changing jobs every year? Are RBS not paying the going rate so people fuck off elsewhere (bearing in mind paying the going rate is the argument RBS use to justify paying multi-million investment banker packages)?

Alternatively, I’ve been fortunate enough never to have had fuck all to do with business banking, but I’ve blethered to a few who have and who've made clear its an sales target driven fucking nightmare. So are RBS, that admirable civil service institution, working people too hard by setting their sales targets too high? I think as taxpayers we should be told given the additional recruitment costs this would appear to be imposing and the poor quality service it would appear to be delivering as a result.

In the meantime it was a good laugh reading shite like this given the complete lack of self-awareness there appears to be about how the business is being run and the associated insight into what actually matters to exectives. It was also rather lovely of the Telegraph no to even ask why so many bods leave so quickly. There again business managers do tend to be rather common.

The (New) Left is dead

2011-05-31T13:27:00.000-07:00

I mind a while back looking at what the left had to say about shit given the inevitable collapse of capitalism due to its innate contradictions and what not was integral to left thinking. I mind when I did it was totally depressing because I had to spend an age finding anything and I mean ANYTHING that actually mattered a fuck.

Scanning the last 9 months of articles published by the New Left Review was even more depressing than that because it has absolutely fuck all to say about well anything really. The best you can say is that at least they watch the telly and presumably fulminate about the latest headlines then workshop an appropriate theoretical response with the aid of feminist, eco-lesbians who have a passable grasp of critical theory (Adorno mind not that Walter Benjamin malarky). Apart from that, they lag the times, only ever commenting after the event and in the process come across as a bunch of high-bourgeoisie, privileged elderly shifters at a complete remove from reality thanks to the trust funds and tenures attached to the silver spoons rammed up their rectums at birth.

To give some practical examples – the New Left Review thinks discussing Mao right now actually matters and that shit like the following “The work of Thomas Hirschhorn as artistic primer for a precarious world. Appeals for explanation and engagement in makeshift monuments or plaintive placards, while overflowing installations lay bare the excesses of late capitalism” doesn't just mean whoever writes shite like that is a tool.

Nah, fuck that. If that’s all they can say at this critical juncture i.e. NOW given all the shite that's gone done and is going down, then that’s it, it’s official, the Left is dead, largely, it seems, via auto-anal-asphyxiation.

P.S. this is a positive thing when you think about it. The fact the old lefty figureheads have chosen to render themselves utterly irrelevant makes clear new people and new thinking is needed, give or take ignoring shitfers like this twat like the plague. So thank you Perry Anderson, thank you for rendering yourself an utter joke and reemphasising the fact your brother got all the brains in your family.

The Mafia, the law and positive discrimination

2011-05-23T13:44:00.001-07:00

Was funny reading Nick Cohen's piece on how there's an Omerta i.e. code of silence, at work in financial services.

To summarise, the real reason yer average punter knows fuck all about how shit actually is in the financial services sector is that there are 1) legally binding, contractual obligations to keep schtum at every stage of the process, 2) its fucking obvious speaking out will permanently fuck your career i.e. no other employer would touch you with a barge pole if you speak out about your superiors and 3) you get more money keeping schtum than you ever would in an employment tribunal and with no risk/legal expense.

None of the above to me constitutes an "Omerta" give or take point 2), but then that applies all over the place, most obviously to Doctors. Rather, its economic self-interest that's the main thang at work here. Some practical results of this are that any inside account of how the financial service sector actually works tend to be the odd fictional account written by city boys that bailed out after they got their last big, bonus, plus the case details generated by the only time senior/high paid financial sector types go to law, which is when they think they can get a gender/sexual orientation discrimination case going what with the payout for those being uncapped (unlike what you get in a bog standard employment tribunal). Consequently, the public generally doesn't have a fucking clue give or these odd exceptions, which by definition are atypical and unrepresentative.

Practically, following on from the above, fuck the mafia parallels cos they're just for dramatic effect. Rather, employment law needs a changing as does the treatment of whistleblowers. Fuck knows about the latter, but as for the former, well that's dead simple - employment tribunals should be allowed to award multiples of salary including annual bonuses. There. Sorted. More people will go to law and more of the shit that actually happens will get exposed. Except there's no fucking way the current ConDem shites will do that.

Al Capone, Fred the Shred and structural socio-economic inequalities

2011-05-20T14:14:00.001-07:00

The thing about the Sir Fred of Shred super injunction that seems to be in the process of getting forgotten is the way the peer that raised it in the Lords neatly justified his actions by highlighting how the former RBS employee's employer had a conflict of interest policy for its employees.

Put simply, fuck all the super injunction freedom of the press some tart blackmailing a footballer shite, rather did one of the key archi-cunts of the credit crunch that is fucking the lives of hundreds of thousands of people across Britain breach his own company policies while an RBS employee and if so should he have been dismissed for misconduct rather than early retired on a multi-million package? This is the straightforward thing that needs investigated now.

The issue is NOT whether Sir Fred of Shred having a bit of illicit luvin' influenced his decision-making in ways that fucked the bank because that's (a) a facile idea and (b) impossible to prove. Rather, its did he breach a basic term of his employment and if so can we (a) revisit his package in an actually you can fuck off with no cash ya cunt type style and can we (b) have the heads of all those cunts who may have turned a blind eye on a stick as well please?

As an immediate P.S. its no exactly a new idea right enough given this or more famously Al Capone getting done for tax evasion. But, stickin' em with the technicalities delivers results and scares the willies out of all current company directors who know damn fine well they‘ve been a bit economical with the actualite in the past when it comes to their expenses claims. Oh shit, that last bit means it'll probably get buried/smothered by a different story. In the meantime eeeuuurrrgghh, imagine Sir Fred of Shred looming down on you sexy style with his cum face. Euuurrrgghhh.

A May 23rd PS - Is it Nelson in the Simpsons that points and says "ha ha, ha ha"? Regardless, the additional details now coming out about the Sir Fred of Shred's "romance" are brilliant. So according to this not only did he have an affair with a colleague he "oversaw" her getting her second promotion while elsewhere unnamed senior sources are letting it be known that neither of the chairman Sir Fred served under were aware of the conflict of interest; now you could fuck this up by trying to do some bigger picture shit like how this illustrates how he ran the bank as a personal fiefdom, but so fecking what, that's what all CEOs do.

Rather, the real issue is straightforward and remains getting Al Capone on his ass i.e. get 'em on the technicalities over TWO questions/potential breaches of company policy:

(a) Did Sir Fred follow his employers conflicts of interest policy as he was presumably contractually obliged to
(b) If not was he involved in any decisions where there was a clear conflict of interest he was contractually obliged to flag up (i.e. overseeing the promotion)

And lets be clear(a)applies to potential situations and is simply a point of principle that means the relationship should be flagged up regardless, whereas (b)could be an actual and therefore an additional issue and potentially a muthafuckin' smoking gun.

And lets also be fucking clear about the context here; terribly senior bods get terribly big pay packets both because they are clearly worth it, but also because they are regularly assessed on the extent to which they explicitly lead by example i.e. did Sir Fred deliberately withold information that might have adversely affected annual assessments of his performance (oopsy - if such behaviour wouldn't have affected it, then that would indicate there's one rule for the senior and another for everyone else, which is not a good thing to make public knowledge in HR terms)? Now this last part is the kind of wanky bullshit that gets explicitly included in annual performance reviews for very senior bods i.e. they get a bigger bonus the more of an example they set to us plebs. So what kind of example did Sir Fred set I wonder? Plus, the FSA is presumably mindful of the fact that the appointment of a senior bod at a systemically important financial institution was potentially tarnished by unmanaged and unstated conflicts of interest i.e. this shit actually matters big time in principle.

In fact fingers crossed the public interest now being taken in this might prompt the FSA to try and claim a real scalp. They might even engage some HR consultants and start going after the other cunts that fucked the UK economy by investigating their adherence to company HR policies (nah, I doubt it).

kultuR studies

2011-05-05T13:08:00.000-07:00

Cultural studies is bad enough, a micky mouse, middle-brow mash-up of sociology and misinterpretation tarted up with quotes from dead Frenchman, but cultural commentators are in a league of cockness all of their own. These rent-a-bollocks zeitgeist surfing dicksplashes* provide colour like toddlers paint; terribly important for all those directly involved, but meaningless drivel to everyone else. And so in an Evening Standard article about new Missing middle (class) consumption patterns the cultural commentator Stephen Bayley was quoted saying “You either have to go super-bargain or super-prestige. There is no room for mediocrity”. To substantiate this point the article quoted a different, unnamed commentator; “(i)n car terms, everyone wants luxury German or cheap Korean”, which is very lovely I guess except its bollocks.

Here are the top ten cars sold in Britain in 2010:

1. Ford Fiesta … 103,013
2. Vauxhall Astra … 80,646
3. Ford Focus … 77,804
4. Vauxhall Corsa … 77,398
5. Volkswagen Golf … 58,116
6. Volkswagen Polo … 45,517
7. Peugeot 207 … 42,185
8. BMW 3 Series … 42,020
9. MINI … 41,883
10. Nissan Qashqai … 39,048

Now maybe the point was it’s not what people buy, but what they aspire to. But, then that’s also to claim Ford Fiesta drivers actually want Kias, which they don’t. And sure plenty aspire to the latest tuned up BMW, but then they always have.

Then I found another quote elsewhere from Stephen Bayley and just thought WOW!

“In an age robbed of religious symbols, going to the shops replaces going to the church. We have a free choice, but at a price. We can win experience, but never achieve innocence. Marx knew that the epic activities of the modern world involve not lance and sword but dry goods. “

I mean seriously, WOW! The contents are such incoherent bollocks they simply don’t warrant scrutiny (other than to highlight the US example of mass religion and mass-consumerism shits on the opening assertion), but the language does illustrate how the (ab)use of portentous words and phrases is more important to this kinda of shite than dull things like accuracy. What, I wondered, was the point of shite like all of that?

That was where my head was at as I sat reading my “essential executive toolkit”, the British Airways business:life magazine. In it was an article on “The mindset revolution” by James Reed, chairman of the Reed global recruitment business his dad founded in 1960. Nepotism, schempetism I say, yer man Reed is also a member of the UK Government's National Employment Partnership, a fellow and regular speaker to the Chartered Institute of Personnel and Development, a former associate of the Prime Minister's Delivery Unit and a member of the Institute for Public Policy Research Taskforce on Race Equality and Diversity in the Private Sector. So in labour market and employment terms he’s quite a big cheese and worth a peruse at the very least.

Now James paid some bods to ask thousands of top employers what they “really look for in employees”, then do some “groundbreaking” research and even run a few workshops. What these discovered was revolutionary, 96% of the employers surveyed would pick someone with the right mindset, but not the complete skillset over someone with the complete skillset, but not the right mindset. As I was reading this on a plane I started praying like a Sunday shopper that the employers surveyed didn’t include those of pilots.

Prayers cast I read on to discover this research “totally undermine(s) one of the central tenets of the job world that better skills equal better jobs”. Again I was shocked. I didn't realise that was the case or at least hadn’t since I read Richard Hoggart’s 1957 musings on how certificates were all very good, but things like personal character and class really mattered when it came to the distribution of economic rewards (in The Uses of Literacy).

Perhaps Reed was simply using rhetorical devices here, building a straw man to portentously knock down with further revelations? Nope, I think he actually believes this shite, so much so he’s written an entire fucking book on what he calls the 3Gs that constitute the “fundamental components” of a winning mindset. These are the Global, the Good and the Grit (rhymes with…....). I kinda lost it at this point when it came to understanding what these entailed, but they followed on from a bit about top employers stating en masse that they value honesty, trustworthiness, flexibility, commitment and so on above all else. Thankfully, top employers it seems attach no importance to the servility, obsequiousness, fear, aggression, sycophancy, hypocrisy, double-think, arrogance and so on, the "behaviours" I’ve seen pretty much every day of my working life alongside those other more admirable traits. Except,my personal reality would suggest yer man Reed is clearly talking bollocks, so much so I started thinking about the question the cultural commentators had prompted; what’s the point of such drivel and does it actually matter?

Starting with what’s the point, for Reed and British Airways, there’s some obvious pragmatism at work given the article meant free advertising/free copy and the high heid yin of a company that probably uses the airline a bit getting his obvious ego massaged. So that’s tickety-boo then, except this shite is being presented as something to be taken seriously and isn’t that a bad thing given the co-author of the book the article was drawn from is a guest lecturer on the Harvard Business School Executive Education program i.e. he influences global multinational executive thinking? Like wouldn’t we rather the people that run things were schooled in reality as opposed to bollocks? I don’t know, I mean I’m one of those naïve feckers that thinks the only theories worth having are ones that abstract from the reality they try to explain and that the ones worth pissing on are biased shite imposed like dogma on a reality that is then butchered to fit.

The other thing is that this kind of shite, besides being shite,is profoundly conservative because at no point does it threaten the self-image or sense of self of the executives being sold 3G mindset courses as I write this. This is a pity; given top employers only recently did their best to drive the advanced Western economies over a cliff, perhaps a more introspective, critical assessment of top employer mindsets is in order? And instead of fixating on the individual given the recent dominance of group-think and herd behaviour perhaps a more sociological assessment would be more appropriate? And anyhow, I reckon anyone that takes shite like the above seriously is a fucking idiot and not to be trusted with anything more important than his or her own spoon and pusher.

Sadly none of this will turn out to be the case. Instead, a few years from now poor sods across the globe will sit down in neon lit rooms staring at flipcharts and workshopping their mindsets for 2 hours before being handed a voucher for staff canteen sandwiches. They’ll turn up for work the next day clutching a course folder and a new desk tidy spattered with truisms and get back to the real business of sucking up to their boss’s boss. As for cultural commentators, well at least no one is forced to workshop them, they don’t influence the culture of the organisations we endure 5 days a week and they don’t piss away shareholders’ cash either, so I guess they can be safely disregarded as a bunch of ignorant tossers.

* Or has some other word replaced zeitgeist rendering my use of it tragically jejune?

The no luck of the Irish

2011-04-25T10:34:00.000-07:00

The thing with the Orish (not the North) situation is how utterly fucked up it all is in ways that provide an exaggerated insight into how shit was here to an extent that makes this report into what happened quality reading. So like Ireland also had a property bubble to be sure (to be sure) and greedy fuckwit former building societies that got out their league lending like morons to golden circles of businessmen/property developers, but then it also had bankers and politicians who did things just that bit more blatantly than here when it came to cheap credit, all expenses paid, no questions asked shenanigans.

However, the biggest, fundamental, will potentially have an impact that will last for at least 5 years difference is the legal system. I recently had Ireland described to me as a “debtors paradise” by someone who’d dealt with problem loans there a coupla years back. This was because of their legal system and the way it, compared to British law, favours debtors i.e. borrowers, over lenders. And so it should you might say especially when it comes to residential mortgages people have taken out to buy themselves a home. Except the guy I was talking to had been dealing with millions of pounds that’d been lent to businesses and as he put it the delays, then the need to take things before a judge who had a thing or two to say about nasty British banks let me tell you and was teeing off next Sunday with the guy who ran the business that’d borrowed the dosh in the first place, made it an utter fucking nightmare.

Now this, as the Japanese lost decade makes abundantly clear, is a bad thing. If shit can’t get sorted out, well then shit won’t get sorted out and will instead drag on and on and on. Need a loan for a new business? Sorry, the banks are all tied up at the moment with their existing bad debts. The other thing is the terms reached on Orish agreements tend, going by the chat I heard, to be as friendly to the debtor as possible, which given so much of what's already coming before the courts involves property developers who took a punt on a bubble strikes me as a tad iffy. The context here of course is that given the Orish taxpayers have nationalised some banks, recapitalised others and put themselves on the hook for the entire system's deposit base, then what’s good for the banks is very much good for the Orish people; it's no longer the case that it's nasty bankers trying to do down some County Kerry boy made good, rather its more likely to be a pish-ripping Dublin based multi-millionaire whose transferred all his assets to his surgically enhanced peroxide wife. So perhaps the Orish legal approach to bad debt needs looking at pronto? In the meantime this provides some nice examples of the kind of shite already being seen.

Personally, I doubt any significant changhes will be made. The other thing we’ve seen in Ireland an exaggerated form is the willingness of politicians to sacrifice taxpayers for the good of the banks and their chief executives to an extent that I think (only think mind), even yer average British punter would take umbrage at. My personal favourite example of this was the way the initial haircuts on NAMA were set and only subsequently reduced after some newspapers got wind of how this government agency was planning to pay way over the odds for bank debt to help them out whereas here the Bank of England took a far more aggressive approach at the outset (compare say this with this). So nah, what I think is Orish politicians a bit sore that they never got some of the good time gravy will keep coming out with oh so tough bullshit rhetoric to wallpaper over the same ol' system wherein politicians, top bankers and big customers keep making or at least keep millions and billions and the Orish taxpayer keeps taking all the risks. And yeah, yeah, that’s the same as here except when you read about say Bertie Ahern and his boom time, Boomtown, grubby, fiver grasping antics you realise no it thankfully isn't quite.

The businessification of the world

2011-04-25T04:01:00.001-07:00

To find out what’s happening in the economy on the BBC website you click on a link called “business” and there mixed up with articles about profit warnings and new CEOs you find out things like the latest inflation figures and house price stats. For me conflating “business” with “the economy” like this places a distorting lens in front of a determining aspect of all our lives.

Institutionally, I’d argue “business” can never provide such a totality, but is instead only ever part of a broader economy that includes such significant institutions as national/local government, non-profit organisations and co-operatives run by aggressively predatory lesbians. Plus, key economic indicators, institutions and the cost and supply of key factors of production are influenced by things that are fuck all to do with “business”, oil prices and political and military events being the most obvious example. Or is this conflation meant to impose an interpretative slant on how we should approach these other events? Like does the war some madcunt despot is waging against his own (Libyan) civilians only register due to the impact it’s having on oil prices and what that means in terms of say BP’s profit margins?

I’ve also consistently put the word “business” in inverted commas because what actually registers as “business”, be it in the Financial Times, the BBC, the Economist etc. is itself only ever a distorted subset of well business. For me the best example of this involves Christmas trees, Irish Christmas trees to be precise. A mate told me how he knew someone who, having inherited a patch of land, decided one December to sell Christmas trees. Everything went hunky dory until the bloke who usually sold trees in the village turned up with a few mates and explained to the new boy that he’d better stop it pronto if he knew what was good for him.

There are loads of similar stories. There’s the scaffolding firms that regard specific parts of a city as “their patch” and who, besides intimidation, take down and/or steal the scaffolding rivals put up in “their patch” (much the same can apply to skip hire as I understand). Or there are the taxi firms that, via the power of a few backhanders, get cushy local authority contracts at inflated rates to take special needs kids to school.

Taxi firms in turn introduce the world of cash businesses and all that means in terms of pubs, restaurants, puggy parlours and latterly tanning salons, in terms of money laundering fronts (or even just, like so many small hotels and takeaways, keeping cash to one side to dodge the taxman). I’d add nightclubs, but really that’s always been a balance that waxes and wanes between who runs the doors and the nightclub owners when it comes to managing the drugs trade inside. And all of these of course pay professionals; the accountants, lawyers, financial advisors and what not, who frequently know damn fucking well what’s going on, but turn a blind eye give or take setting their fees accordingly. Then on a more industrial scale you get plant hire and the horrendous percentage of machinery dotted all over Britain’s motorways that A stole from B to sell to C with no questions asked who in turn hired it out to D.

Sticking with the construction industry you encounter the lovely motto of screw the subbies wherein main contractors fuck over sub-contractors on major, landscape changing developments because they’d rather delay paying a subbie for work (or just not pay everything that was originally agreed) than pay the interest on their working capital facilities in a situation where the subbie knows damn fine well that if he doesn’t keep schtum he’ll never get work off the main contractor again (to be fair there are the specialist construction courts, except all that proves is how rife to the point of being institutionalised this kind of behaviour is). When you start adding all this together – the Christmas trees to the taxis to the skips to the screwed subbies and what not – the more apparent the vast, never-reported world of business becomes despite “business” equalling “the economy”. Instead, “business” equals just big PLCs and a biased smear of self-publicising SMEs, the best Scottish example being of course Ultimo.

Alongside this obvious selectivity, listening to or watching any BBC shite on “business” you also realise the “business” that does get reported is a distorted, self-serving bag of shite. Now am sure any glaringly obvious examples of theft or intimidation will appear on the BBC in the crime section, except by definition, reporting that kind of shit in such a way presents it as an exception as opposed to a frequent rule; that the aforementioned backhanders feature in the awarding of local authority taxi contracts is just the way thing are.

The thing is though this can also apply to the big businesses that do get reported on, the best recent example being the £280m fine imposed on Unilever and Procter & Gamble for operating a cartel that fixed prices on household name products in eight European countries between 2002 and 2005. Now, I reckon that’s worth a wee pause and a moment’s reflection; for years price fixing was presumably integral to the marketing strategy of 2 global multinationals. And there are plenty other examples of dubious practices built into the way “business” is conducted, like have a nosey at the Competition Commission website or a think about the EU and Microsoft. Nor is this especially new given say that for c. hundred years the insurance industry was essentially a series of rigged cartels until Direct Line cut through it all by using phone lines instead of intermediaries to sell product.

All these examples make abundantly fucking clear we are rarely talking about one-off mistakes by rogue employees who no longer work for the company and whose unsanctioned, secret antics have been fully investigated to the point where they’ve generated a suite of lessons that have been learned from, applied and documented in a code of conduct. Rather, this kinda shite is as much a part of “business” as the shite that actually does get reported on. In fact compared to what does get reported on it’s arguably more real, more valid and a damn sight more accurate.

To give a practical example, I reckon at least some of the following factors influenced Halfords move into selling services alongside things:

It’s close to saturation point in its existing markets with limited scope for diversification into additional product areas that are anyway also subject to the downturn in discretionary spending: The services chosen provide a logical extension of an existing (utterly fucking shite) brand; competition in these markets is highly fragmented indicating there is clear scope for an aggressive, major player intent on consolidation and leveraging its existing scale economies and actual service prices have frequently risen well above inflation indicating good margin is available.

Except when I click here the Halfrauds CEO, David Wild, instead talks about Tesco in a way that leaches off the latter’s credibility, then spins some homily shite about how he “always think about the customer” when making business decisions. Now this is kinda lovely except it implies he bases multi-million pound investment decisions on him putting himself in the shoes (and cars) of yer average punter as opposed to say ordering detailed cost-benefit analyses, gathering deep market research, buying in strategic consultancy advice on formulating and implementing strategy and what not i.e. the kinda shit that actually happens. As a result he sounds like an unprofessional twat.

Alternatively, he’s simply doing what most PLC CEOs do, which is bullshitting in a Harry G. Frankfurt type style on behalf of his company because to a large extent he and they are largely figure heads used to reassure and warm-up fund managers, key suppliers, big customers and other stakeholders. The thing is though if that’s what CEOs do, why the fuck don’t we get to hear from bods who actually know how shit is in “business”? Obviously, Halfrauds would never let your local store manager appear on the box to talk about the reality of how Halfrauds sells shit shitely, well at least not until he or she had been on a media management course. But, if the alternative is David Wild’s bullshit, then why the fuck bother and why present the programme David Wild spewed over as being a “business conversation show with people at the top giving insight into what matters”, given they patently don’t provide insights and don’t talk about shit that matters?

One argument I guess is that the programme’s editors consider themselves lucky to get such senior bods to talk (in exchange for handing over a free advertising platform and smearing a patina of credibility all over them). This is lovely, I guess, except, business in Britain luxuriates in a distinct lack of scrutiny; when David Wild started bullshitting should he not have been challenged on his bullshit, like should his strategy not have been considered in terms of its success to date and impact on other businesses (and employers)? Rather, we live in a media-defined world where instead of analysis, “business” gets routinely equated with the economy and, the fetish of executive personalities aside, reporting means spewing out the same predictable, exclusionary cultural tropes wherein BP equals a potential environmental disaster, car manufacturing the next campaign to keep production of an SUV designed elsewhere in some horrible English town and utilities the next pensioner crippling price rise and so on and so on.

It could be worse I guess, like US telly has all these kerazee cunts in braces over-enthusiastically jibber-jabbering about the next hot stock pick. Except we know they’re clowns who neither matter nor give much insight into anything whereas our equivalent is more fucked up because it's taken more seriously. So besides business speak oozing into common discourse like a wet one leaking out a pair of boxers, the biased, selective, version of “business” we get spoon fed keeps getting presented to us as a cultural paragon we all should aspire to and learn from because of its great efficiency, customer focus, leanness and so on. Indeed, here “business” is an imperative stick routinely used to beat us over the head; the public sector NEEDS to get more “business” like, we NEED “business” leaders to tell us how universities should be funded and all that kinda bollocks. Except, business can also mean threatening to kick a rival Christmas tree seller’s head in, multinational price fixing arrangements, tax dodging, cutting costs until lives are lost and Halfrauds complete disregard for the personal safety of their customers i.e. there’s a selective, political rhetoric of “business” used every day to justify all sorts of shite in a hegemonic type style. Cunts.

Current day shite in context

2011-04-13T14:35:00.000-07:00

This is a post about someone usually regarded as being as right on as Sting, except Sting is a dick unlike this bod.

I mind being told a story about Professor Harold Perkin, the dead social historian, by some bod that’s now a high falutin’ academic at a top notch university. By way of background there’s all these wannabe who’s who and Debretts type shite kicking about that send out reams of spam email asking you to pay them cash, in return for which they’ll stick you in their forthcoming international guide to top notch professional movers and shakers. Harold it seems had fallen for the hype, stumped up the cash and had all of the resultant certificates stuck up on his wall to prove that he was indeed top notch.

The irony of the story was that he was top notch regardless of the certificates. Anyhoo, reflecting on my post on the forthcoming Scottish election and the jerkwads campaigning for our vote and more generally about the ongoing assault on the public sector, public sector gold-plated pensions and public sector Ts&Cs and what not more generally minded me of Harold.

Most of the arguments made against public sector employment conditions are couched in terms of fairness and pragmatism; why should they have that when us private sector bods don’t and anyhow its unsustainable, etc., etc., Now personally, being a private sector bod, my beef with public sector bods is they don’t have a fucking clue what life is like outwith their world, but despite that I’m still conscious of how the overall thrust of shit is that rather than levelling private sector employment conditions up to public sector standards, its instead about levelling down the public sector to all the shite us private sector bods have to contend with, i.e. a fucking race to the bottom hurtling towards the vast the majority being forced to work til they die in exchange for less money, more debt and fewer public services.

But, that’s me and I’m being specific, whereas quoting from dead Harold’s Times obituary on the other hand I find these wee, bigger-picture gems; “by the mid-20th century, Perkin argued, the professional ideal had triumphed as completely as the entrepreneurial ideal had done a century before. But, just as the entrepreneurial ideal had started to decline in the moment of its triumph, the professional ideal started to lose its glitter when it achieved moral and cultural hegemony. Public service professionals were confronted by a backlash led by their private sector cousins. And, by a strange paradox, this private sector backlash took place under the banner of a new version of the entrepreneurial ideal of 150 years before….. almost everywhere, he gave warning, professional elites were abandoning the service ethic of their forebears and feathering their nests at the expense of their fellow citizens, whom they treated as “dairy herds to be milked to exhaustion”. The great question was how to prevent them from abusing their power. But did we really want to prevent them? Or were we “content to let the false prophets of individual greed and unenlightened self-interest lead us down the primrose path to the everlasting bonfire?”

Following on from that I was going to phrase the following in terms of the public sector ethos vs private sector “realism” , except the triumph of said private sector “realism” has been so complete, so all-encompassing and so increasingly applied that the notion of “vs” seemed pointless. They (me) won, so deal with it, which is cool except the credit crunch we’re all living through, the worst economic downturn since the Great Depression, highlights both the true costs of that victory and its consequences for the vast majority of Britons. Shame there was never a debate about it all.

There again something Harold’s academic peers made a point of ensuring was that that would remain the case. This is understandable given how many retain a juvenile fascination with implausible, left-wing theory driven notions of what a fairy-tale werking class might have one day achieved when it wasn’t beating up the wife after getting paid on a Friday. Then there’s Marx himself who accidentally omitted the rise of the entire fucking non-manual, white collar salariat in a that calls his entire oeuvre into fucking question to the extent Harry Braverman later tried and failed to save the argument with his deskilling thesis (with people in turn making efforts to justify Braverman's deskilling thesis).

Compared to them Dead Harold suffered from never being sufficiently trendy (no Marxist, neo or otherwise or post modern shite for him I'm afraid) to attract the naive and had a chip on his shoulder a mile wide that his peers were fully aware of as per the introductory story. Like this wonderfully dismissive review by some Prof here is an example of how Harold got belittled on a personal level so his ideas could be dismissed, which is a pity because I reckon they provide a fantastic insight into and means of understanding the present. Or to give a practical example, given what we’ve all learned about public sector owned bank bonuses and free bank subsidies and what no, yer man Harold’s comment about how the socio-economic elite might view us droogs as “dairy herds to be milked to exhaustion” is utterly fucking spot on.

Am now trying to think of a point to this post now, err, howzabout gie us a better pension ya cunt and see thay politicians wanking on about applying private sector values to the public sector, howzabout they all get their faces gangraped by donkeys the next time they say “business model”? There, that’ll do.

Scotland's democracy = Scotland's mediocrity

2011-04-12T15:05:00.000-07:00

Fuck Donald Dewar, Henry McLeish, that nyaffy wee shite stain of a machine politics placeman who resigned as First Minister over an expenses scandal is the real symbol of Scottish politics and devolution. Like the Scottish parliament, McLeish tried out for the premier league (Leeds United), but ended up in the second division (East Fife). Similarly, like so many of the mediocrities that have sat and sit as MSPs, McLeish is a public sector man born and bred given after football he taught Town and Country Planning, which would add a potentially quaint aspect to it all if planning didn't involve local council jobsworths disruptively imposing Stalinist notions of a good life on the rest of us give or take pocketing backhanders for pushing cheeky wee property developments through on the QT. And does anyone have any memory of him ever no coming across as utterly average at best?

So for me the life history, behaviour, values, experience and "achievements" of that curly heided muppet tells us all we need to know about the true nature of the forthcoming Scottish elections. It’s like fer fuck sake when you think about the candidates, like I have no idea who the Labour lot are individually, but am guessing en masse it's a load of career shifter brains who are the son of or married to someone with clout in the Labour party plus some former teachers who couldn’t get promoted before they fired themselves into being councillors. And fuck only knows about the Tories also, like is it the usual shiteload of scrabblingly, upwardly mobile chancers, Bearsden/Morningside respectables plus the odd aristo? LibDems? Who cares given they’re gonna get utterly fucked, which just leaves the SNP.

Now to be fair Alex Salmond stands out a mile in the parliament compared to pretty much everyone else, except that’s because by British standards he’s middle ranking as opposed to an utter fucking no-mark i.e. its no that he’s that good, rather its that the rest of them are so utterly fucking shite. Aside from him though fuck knows, like besides Alex there are some genuinely interesting figures, but also some utter mental SNPers who, from personal experience, unthinkingly go the whole hog on blut und boden notions of nationality. Plus, there’s some public sector jokes who’ve fallen for the SNP as standard bearers of the Scottish social democratic tradition/to the left of Labour shite and all that. As to what that leaves the answer is fuck knows (and certainly not they wee arrogant, smug Green bastards let alone Margo McDonald).

So yeah, the Scottish election is looming, one where the reality and the future have already been determined by the credit crunch, which the candidates will presumably have a sound grasp of both in terms of its causes and consequences for the electorate. More than that, I'm sure they’ll be able to articulate what that means in terms of practical policy measures as opposed to moaning on about Whitehall being mean to all us Jock Tamson's Bairns and how that means they can't throw as many taxpayer fivers at things as they used. Alternatively, the forthcoming election, the calibre of the candidates involved, the debates and associated examples of mediocrity will provide ample evidence as to why the idea of an independent Scotland is a big fucking, scary joke.

(What actually makes it scarier AND more tragic is things like the Institute of Governance at Edinburgh University where serious attempts by reasonably clever people were made at providing a devolved Scotland with the intellectual infrastructure needed to be well devolved really. You wonder what the academics there actuallty think about it all, like are they too nationalistic to see, are they ever hopeful that one day some political prince - but no one of they Italian types - will come, do they simply cringe in-between filling out funding applications or are they so ivory towered as to no give a fuck? Christopher Harvie will have a view I'm sure).

Shape of things to come

2011-04-04T14:37:00.000-07:00

In a lovely wee article John Kay pointed out how any government wanting to get all strategic about the economic future of an economy would typically fall into the trap of asking today’s big corporate beasts about tomorrow’s economic prospects.

The neat wee example he gave to illustrate the fundamental flaws in such an approach
was how a government looking to figure out an IT strategy a few years back would have asked Big Blue IBM what they thought whereas the reality was that Microsoft, a then tiny wee company that wouldn’t have registered on any government’s radar/have hired a lobbying firm to spew its vested interests allova any politician that happened to pass nearby, was actually the future (cue reference to IBM making the fundamental strategic mistake of ignoring the subsequent importance of PCs and software as opposed to fuck off big complex hardware). Aye, that was what a fabulous person linking to UK Uncut’s rationale for having a go at Fortnum and Mason’s got me thinking today anyway.

The thing with UK Uncut though is, as they very rightly point out, the way things are is horrendously unfair; big companies dodge big tax bills cos of all the offshore holding companies and terribly clever accountants they employ. Except, however justified that may be, it’s still little more than a moral critique. And while morality is all very good, your moral values and mine differ i.e. they're open to endless debate and anyhow someone will sneak in some pragmatic shit about necessary evils and the game would be rendered a bogey. So instead, let’s construct a more effective “economic” argument.

The ability to aggressively negotiate a low tax settlement with Her Majesty’s Revenue and Customs constitutes a competitive advantage i.e., if a big PLC can negotiate a proportionately lower tax bill than a smaller rival, it can undercut said rival, regardless of actual product quality/service, efficiency and so on, and doing so positions it very well to drive said competition out of business. So really it’s in all our interests for every company, no matter how big, to pay the same % tax as each other (the alternative being us being short changed to finance the removal of competition that might otherwise deliver better products, services or job creation opportunities). So yeah, fuck one off deals reached against a backdrop of companies threatening to relocate their headquarters elsewhere. Instead, get every fucker to pay the same corporation tax rate and lets establish a level playing field that will let the Microsofts of tomorrow take over from the IBMs of today (ooh, a rhetorical flourish).

Wealth creation outwith Trafalgar Sqaure

2011-03-28T14:27:00.000-07:00

Ever since I read George Woodcock’s history of Anarchism years back, I’ve always had a soft spot for the Angry Brigade, the closest Britain ever had to an anarcho-terrorist organisation.

To be honest it's the name that gets me. Like there's no jutting German sounds as with the Baader Meinhof lot or superficial references to theory as with the Red Army Brigade, rather, our anarchists were angry, GRRRRR! The name was even more ace because it was as redolent of the Monty Python shows then appearing on the telly for the first time as you could hope for or at least it was until Monty Python went and destroyed any hint of credibility any hard left/anarchist group, party or faction then or now might ever aspire to might with their satire of the People's Front of Judea and the splitters that made up the Judean People’s Front, etc., in Life of Brian.

What minded me of all this was two things. One was listening to some no-mark academic witter on terribly seriously about the competing ideological positions of the however many dozen anarchists that took part in the violence seen in London over the weekend. Now calling some bod from Swansea a no-mark might seem a tad harsh (hang on he’s fae Swansea, that shit stain of a clinging to the arsehole of Britain place, so no it probably isn’t really), but seriously, why does less violence than a gaggle of boozed up fuck nuggets inflict on most North East English urban conurbations of Friday and Saturday night warrant in-depth theoretical analysis? Could he no have just said “splitters” and be done with it? (Sides his reference to “Class War” also struck me as being more a claim than a piece of substantiated insight).

Anyhoo, my take is that the police, who outnumbered the anarchists gawd knows how many to one, were feart of getting caught on camera walloping perfect innocents in the face for the umpteenth time so let them get on with things in a “this will generate a dod of politically convenient negative publicity just in case we get caught clubbing people in wheel chairs” type style. Plus, I reckon some radio 4 editor had a flashback to their undergraduate politics degree and reckoned briefly taking the anarchists seriously would generate 5 minutes of air time in line with the usual BBC line of obsessing over things gone wrong, which here meant public spending cuts prompting politicised social unrest.

All that’s just a pile of shite but. The other, much more meaningful prompt was given by a fabulous person querying the nature of wealth creation, which gets straight to the point i.e. the fundamentals of how shit is. If we go by Adam Smith, wealth creation derives from successfully combining the factors of production, which would be materials, labour, land, and technology in such a way as to manufacture a thingymajig that can be sold for a profit or at least more than was paid out to buy the various bits and bobs involved in the first place. Personally, as someone who thinks Schumpeter’s model of economic change and the business cycle is the dog’s, I’d also include entrepreneurship, no not Dragon's Den rather the gathering together of the aforementioned factors and their coordination into a productive process, as an additional and vital factor of production.

A simple summary of this would be wealth creation involves taking 2 and 2 and making 5 and in the process generating more jobs, demand and tax revenues than would otherwise have been the case. However, it’s the opportunity to make a profit that’s key because it presents an ongoing incentive to get entrepreneurial on everybody’s ass. Now am sure an anarchist would challenge this view with idealistic shite about other incentives and methods for creating things, except to do so would be to miss the fucking point, which is making profit is only ever one incentive, not the only incentive, and one that shit like history proves happens to work quite well a lot of the time on an ongoing basis.

Rather, the only debate worth having in my view, is identifying when wealth creation stops and economically destructive activity takes over. Like the biggie here for me is economic rent and rentier institutions. By contrast with wealth creation, which is about adding to the sum total of shit i.e. co-ordinating the making of something that would not otherwise have existed, rent is about shit like having to bribe/pay a tax to get something that’s already been made through a checkpoint. Or, it could be the externalities and transaction costs associated with financial products we all have to pay as a result of pointless speculation in oil, credit default swaps, currencies and so on e.g. shit that does fuck all other than generate volatility (that in turn incurs costs to hedge against) and/or costs.

So yeah, rather than some wank about how profits are derived from exploitation in a wankfully stupid moralising notion that ignores how Marxist theory doesn’t even begin to approach the reality of the modern service sector let along the economy as a whole, I reckon where wealth creation ends and rent begins(and merits being taxing like an utter muthafucka) and developing a view as to at what point the concentration of wealth in a minority of hands becomes a bad thing, is the only debate that matters.

P.S. This bloke here was a real anarchist. It's up to the reader to decide whether that means fuck all.

Crystal Balls part 2

2011-03-23T14:09:00.000-07:00

Again with the stats function. But, was way cool today cos it turned out someone was daft enough today to page impression my 2 and a bit year old post about how to anticipate a financial crisis. That focussed largely on language/spin and organisational dynamics, however, thanks to the deep, deep insight of Harriet Harman I reckon it can be expanded to include penis extensions.

Back in the day Harriet queried whether there would have been a financial crisis if more women had been in charge, like what if it had been Lehman Sisters rather than Lehman Brothers. Oh how witty. And how fucking stupid for the most part given I mind I had a spell working in a largely female environment and even setting aside the Robbie Williams calendars, the start the day bitching about how such and such was a bit old for that outfit and being quietly advised to be gentle to such and such because they’ve got some women’s things on the go (honestly, the reality was as fucking clichéd as a Bernard Manning routine), there was just as many aggressive women as men in the largely male environments I’ve also worked in. But, what even the most aggressive woman didn’t have was that much interest in penis extensions.

This is actually a bad thing because more women would make financial crises harder to spot. My original post focused on how doing some finance that was patently stupid was a sign something was amiss. However, deciding what is and isn’t stupid is open to debate and debates take time and are ultimately only ever resolved with the benefit of hindsight. Thankfully penis extensions provide a more reliable and straightforward guide.

What we also saw in the run up to the credit crunch was a number of what I discovered tonight Top Gear presenters call a “Concorde moment”. For them that possibly means pinnacles of engineering genius that enrich our very lives by showing what it’s possible for man to achieve. For everyone else it means throwing money without question at the construction of a super-duper penis extension. And on reflection in the run up to the credit crunch we had plenty. Sticking with Top Gear for a moment longer there was the Bugatti Veyron, the fastest ever thingy. Elsewhere there were those towers in Dubai, the most erect thingies ever while across the globe huge ships were also being ordered . The point is, as Canary Wharf highlighted the last time there was a financial crisis in the UK, I reckon that whenever 2 or more biggest, fastest, tallest, most expensive, girthiest things start getting built, its time to get a bit nervous.

They don't like it up 'em

2011-03-21T14:57:00.000-07:00

Earlier in the year we learned Barclays UK corporation tax bill in its 2011 annual accounts was £113m or 2.4% of its annual profits (the corporation tax rate in the UK for businesses with a turnover greater than £1.5m p.a. is actually 28% for 2010-11). This followed on from all the reports about Vodafone that indicates Her Majesty’s Customs and Revenue tended to reach "pragmatic" agreements with major PLCs about how much corporation tax they should pay.

Since then there’s been all this gossip about how Barclays might relocate its headquarters elsewhere if the Vickers enquiry into banking recommended any major restructuring of British banks i.e. the banks are saying leave us the fuck alone or we’ll go and you’ll lose out on all the corporation tax gravy.

Except, as the Barclays examples makes very, VERY clear the gravy ain’t that much to the point where its perfectly reasonable to ask if its UK operations were simply the subsidiary of some Cayman Island based outfit would the corporation tax it pays (on profits earned here) actually fall that much? In fact, could they actually increase given Barclays already pays tax on profits earned overseas to overseas governments and there would be less incentive for the UK taxman to go easy on its ass given its no as if Barclays is going to shut down all its UK branches in a big hissy fit?

Ahhhh, but relocating a head office overseas would see all the income tax all they head office bods pay fucking off also wouldn't it? Except, given as much of that as possible is already off-shored so fucking what? Plus, any future crisis would presumably be the Cayman Island’s responsibility and not Britain’s i.e. any cost benefit analysis would need to take into account the fact that British taxpayers would no longer be providing what’s essentially a free insurance policy that means they (we) are on the hook for what could be hundreds of billions of pounds to bail these kind of institutions out the next time things go phut, which as every historical study of financial crises makes clear will happen in due course?

It’s funny when you think about it. With all sorts of encouragement from politicians and what not all these megacorp PLCs have worked on a heads I win, tails you go and can fuck yourself ya stupid wee cunt basis for so long when shit actually goes down they don't have a clue to the point where they're left flailing about like beached fish. There again the fact that the ex-CEO of Barclays is now its chief advisor on regulatory matters, following on from all the networking opportunities with the Treasury Project Merlin created, and bank lobbyists are nagging HM Treasury on a daily basis, suggests awkward questions aren't on the agenda and that yer average punter is getting set up to get blithely fucked rough into a cocked hat all over again.

Solving the Greek sovereign debt crisis in c.600 words

2011-03-21T13:50:00.000-07:00

The notion that Britain could ever be another Greece was always utter bollocks and a clear sign whoever was fucking stupid enough to say shite like that was a fucktard of the highest order given the fundamentally different nature of the British economy. Another difference I mind coming across was the insanely wasteful public spending the Greek indulged (indulge?) in. What I didn’t realise though was the extent to which this was matched by tax evasion on an industrial scale with doctors for some reason being singled out as particularly mad for it. Like according to this article more than half the doctors in one part of Athens declared an annual income of under EUR 30k, a wee bitty of a problem when that’s less than many pay just to rent their offices i.e. they’re lying big time.

To get some fiscal rules of thumb, say yer average Greek failed vet actually earns oh, Eur 80k p.a.. Converting 30k and 80k into Sterling at EUR 1.15 to the pound works out at £26k p.a. and £70k p.a. respectively, which in terms of UK tax and national insurance is the difference between an employee paying £6 grand a year in tax and NI and £22 grand a year. Crikey

Anyhoo, lets park all that for a mo because in this terribly serious article called “Can Greece pull it off?" , (Fnarr) the terribly esteemed Professors Giancarlo Corsetti, Michael P. Devereux, John Hassler, Gilles Saint-Paul, Hans-Werner Sinn, Jan-Egbert Sturm & Xavier Vives argue that for Greece “consequences can be mitigated only by the seriousness with which the Greek government tackles tax evasion”. Fair play them except this article highlights the counter-productive reality, which is Greek governments have been trying to do this for years without success.

Its kinda confusing when you think about it really – pull out someone’s bank account, take a note of how much cash has actually gone thru their account in this age of debit card payments for everything (i.e. cash in hand is dying out as an option for paying for anything), compare and contrast that with what they claim their earnings are on their tax return and bobs yer uncle and fanny’s yer aunt. Suede even.

The reality is though that “Greeks could appeal tax levies — and that when they did, it routinely took 8 to 10 years before a case was settled..….. there were more than 300,000 cases backed up in the system” i.e. going after tax dodgers won’t generate much cash up front, but will piss a lot of money away on the legal system.

This is where a mate’s utterly brilliant, simple, straightforward and easy to apply idea comes into play like a muthafucka and it’s this – don’t bother chasing tax dodgers. Instead, introduce or raise annual licence charges. You’re a doctor? Brilliant, physician heal thyself, but in the meantime you need a license to operate that costs the £16 grand per annum difference in tax take between what you claim you earn and what we’ve a good idea you actually stick in your back pocket.

This principle could in turn be rolled out across every other profession and type of small business known to be a tad economical when it came to filling out their tax returns. It could also be made subject to annual review depending on how honest people were considered to be. The other point of course is that without this license all professionals and businesses would be liable to all sorts of legal actions by their clients, insurance companies, the state and what not, making it clearly in their interest to cough up. I also like the fact the 7 terribly esteemed professors didn’t think of any practical ways of putting their exhortation into practice.

Stats

2011-03-16T14:01:00.001-07:00

The stats function on here is mental. The clear lesson remains stick a pic of J0.hnny R0.tten's arse on your blog, except then I discovered today googling "Germ@n gr@nny fuck" also generated a page view.

Obviously, I tried it myself only to be disappointed by the results; this thing didn't even register on the first two pages. Except, then I realised whoever it was really had it bad for Germ@n gr@nny sex, like he must have been looking thru oodles of pages, clicking and choosing the perfect examples of sweet, m@ture Bavarian lovin' for his pleasure.

I feel a bit soiled now I know somewhere some Germanic bloke is giving this site the big thumbs up for somewhat dubious reasons.

Green Investment Bank fail

2011-03-15T14:53:00.001-07:00

One minute investment banks are the scourge of society, the next they’re a panacea for all an economy’s ills. Pile of utter fucking shite either way if you ask me.

Starting with the scourge and the barbarians at the gate thang, investment bankers receive far too much money for doing deals that deliver no added value over the medium to long term both to the shareholders involved and the actual economy as a whole, is how the argument usually goes. And all that strikes me – enviously if honest, given the wages and bonuses they get – as containing a large chunk of truth, which prompts the question well how da fuck have they been getting away with it for decades then?

State initiated investment banks on the other hand are apparently the panacea for all an economy’s ills according to yer average career politician regardless of whichever party they happen to be in. Hence, all the current shite about establishing a green investment bank. Now the rhetoric here is fantastic – a green investment bank is an economic imperative that will build a hi-tech, future-proofed economy, it’ll ensure Britain maintains its global lead in renewable technologies, generate ‘000s of new jobs by capitalising on established, cutting edge technical competencies, leverage existing engineering and innovation infrastructures and act as a transformative capital provider that will underpin the transformation of I don’t know, things that presumably need transformed. All utter fucking bollocks really, like pure rhetorical shite and fuck all else for the most part.

Like I mind hearing some politicians spout off about it and what became utterly fucking clear was that they didn’t have a fucking clue about any of it. Like knowing an investment bank provides equity not debt would have been a good starting point (that and knowing the difference between equity and debt, obviously). Then following on from that there was the question of at what stage should the investment bank start investing e.g. should it focus on the venturing side and finance blue sky thinking in the first instance? Or what about financing taking an already proven technology to market, or marketing an already established products or is it all simply providing the equity needed to go along with the debt for proven technologies in project finance type situations such as a new windmill farm as opposed to a wave based thingy? And how should these decisions be taken, like are we looking to establish however many committees chock full of ignorant place men and all the vested interests and expenses claims that entails or instead is it actual private equity/investment bods that would decide when and how much to invest given all that entails in terms of them getting wages that are however many times the Prime Minister’s? All of the above boring, practical stuff just seems to be flim-flam getting in the way of a politician telling us how the government is INVESTING in a sustainable future or some other such fucking shite.

The other thing of course is that the actual sums being talked up are fucking pitiful. The £1 billion capitalisation Nick Clegg wanked on about is fuck all when you compare it to say the 75 billion Euros in bonds raised by an existing German state investment bank. Rather, the reality is £1 billion is an arbitrary figure that lets politicians say billion a lot with a bilious emphasis on the “BILL” as if them coming across as if they have a speech impediment fucking counts for something.

I was going to wank on a bit at this point about the Macmillan gap identified in the 1930s, the subsequent creation, then eventual reorganisation of 3i and the associated positive role government funded capital investment can play in an economy where the provision of equity finance definitely was subject to market failure on a sustained, systematic basis. But, I’ve some beers on the go so feck it.

What all this does provide though is a lovely context for the 2011 budget when it arrives on March 23rd and all the sound bite shite about growth that’ll contain.

Like so far my impression is the ConDem government is really and I mean really gunning for libraries and disabled people, cos you know those are exactly the kind of nasty fuckers that are asking for it. At the same time it’s already hacking back on public sector investment to an extent that hugely outweighs all this green investment bank shite (1). Rather, the latter will simply be an exercise in political sleight of hand. Like if you were to point out however many libraries are going to close, the response will be, ahh, but we’re establishing a green investment bank. Or if you pointed out however many home helps are being made redundant, the response would again be ahh, tough choices and we’re establishing a green investment bank, and so on and so on.

Personally, the only debate the above prompts is what type of cunts politicians are. On the one hand you’ve the ConDems simply setting themselves up to prove once again that they are indeed snidey cunts. On the other you’ve got the Scottish parliament voting to build a new Forth Road bridge last December (that it’s currently forecast to cost £2.3bn provides yet another benchmark for the fuck all capital base of the Green Investment Bank). The overwhelming sense I had when the MSPs voted for the new bridge was of a shiteload of mediocre shifters desperately wanting to do and to be seen to be doing something in a half-arsed, unthinking Keynesian multiplier kind of way. I reckon on balance they were well-intentioned when they voted the way they did. I also reckon they did sowhile applying fuck-off selective memories when it comes to the deep inability of government to deliver major capital projects in Scotland (e.g. the parliament and the Edinburgh trams) and what that means in terms of the general public having to eventually cough up fucking shed loads more and lose out on public services to cover their asses. So yeah, what’s worse – snidey cunts or fucking useless cunts, you decide.

(1) To quote the Institute for Fiscal Studies’ latest public sector spending note - “Public sector net investment over the first ten months of this financial year has been £28.1bn, which is 20.8% lower than in the same months of 2009−10” i.e. the year to date figure for January was almost £6bn down on the previous year. Compare that with a £1bn fucking green investment bank, then wonder how fucking stupid do politicians think we are (the answer is very and they’ve got a point).

Professors Mishkin, Crafts & Besley and the shiteness of economics

2011-03-09T14:07:00.000-08:00

I mind once being at this academic thingy where there was an American academic running a course who was hoping to get tenure at an American University. Fortunately, one of the other bods, a Professor, running a different course was in a position to influence the bods who would decide whether the original blerk got tenure. It was the kind of situation I’m sure a social anthropologist could have got a thesis out of. For the rest of us all we saw was some poor bloke humiliating and degrading himself as he licked this Professor’s arse. Thankfully, the Professor was too up herself to realise what was going on.

The broader lesson of all this is that senior academics have a significant influence on who gets to be an academic and as a result what ideas, approaches and subject matter make it into the academic canon and/or undergraduate and postgraduate prospectuses. Bearing that in mind I’ve added some edited stuff from the generally good Inside Job documentary cos it shows the terribly senior academic economist Professor Frederic Mishkin being stitched up like an utter kipper (and I’ve added a video to a blog post, woo hoo!). Setting aside the various forum comments now appearing across the globe describing Mishkin as a “douche” and a “wanker” (just google his name fer fuck sake), what this hapless (but wealthy!) joke figure makes abso-fucking-lutely clear is that economists were never, ever just passive observers of the credit crunch. Rather it seems whenever they could they grasped the opportunity to become active, fiver grasping participants in it all, whoring themselves, their institutions and their discipline.

This is the real context for the various navel gazing things subsequently written by economists about the credit crunch and economics. Before getting in to that though it’s probably worth highlighting a quick fact of life – Mishkin was paid loads to do research except while economists may be paid to do so, they aren't actually trained to conduct research. Instead, for economists data is primarily a given (or to quote Mishkin "you go with the information you have")to be squeezed into wanky formulae whereas for most other social scientists data gathering and source criticism - i.e. who created this data, how, why and what does that mean in terms of what it says and how I can use it - is all basic stuff they’re trained to address. Anyhoo that was a digression to highlight how paying any economist to do any research is a fucking joke for the most part from the outset; you're essentially paying them to attach their name and credibility to whatever it is your trying to sell. But, aye back to Mishkin as illustrating a broader phenomenon that provides a useful context for the relatively recent spate of economist navel gazing.

To be fair there’s a quaint aspect to some of the shite economists have come out with since the credit crunch crunched. Like when the Queen asked why economists had failed to see it coming, a hastily convened seminar at the British Academy chock full of the great and the good discussed the matter to the point where the terribly august Professor Tim Besley, formerly a member of the Bank of England’s wise and powerful monetary policy committee, was able to write a response to the queen’s admirably straightforward question; it was, he wrote in July 2009, "a failure of the collective imagination of many bright people both in this country and internationally, to understand the risks to the system as a whole".

More recently, the not quite as eminent Professor Nick Crafts felt confident enough to claim “Two cheers for economists are in order. They were complacent before the financial crisis, but they did know enough to limit its impact so that the outcome was the Great Recession and not a Great Depression”.

Yeah right. In my book Prof Crafts and Besley are talking self-serving shite. Like lets get academic and pedantic on Prof Crafts ass fer a second – there is no agreed definition of a depression and its only happened once the past 100 plus years so how the fuck does fuckferbrains know we’re no in another one? Eh? That aside Professor Crafts seems to be following the following ceteris paribus formulae – economists failed to anticipate the credit crunch, but having learned the lessons of the past, made sure an even worse outcome was avoided. Hence, for Professor Crafts Ben Bernanke, Chairmen of the US Federal Reserve, is a key example because he was and is “a scholar who has made seminal contributions to research on” the Great depression” and blessed with this knowledge saw to it that the following happened; “Aggressive policy responses prevented a collapse of the banking system and injected fiscal and monetary stimulus, which limited the downturn”.

The problem for poor Professor Crafts and Besley though is the following; as the examples of Ben Bernanke and "Douche" Mishkin make utterly fucking clear leading economists were well paid, active, influential participants who helped generate the conditions, mindset and regulations that led to the credit crunch, which is damaging the economic lives of millions of people. They were NEVER, EVER just passive observers who happened to be looking the wrong way. Rather, they were consultants, advisors, boosters, expert witnesses, regulators, cheer leaders, op-ed spewers, ideologues, mascots, ornaments, warm up acts and so on and so on for all the shite that led up to the credit crunch we're still living with. And yeah, yeah you can cite someone like Nouriel Roubini as an example of an economist that warned against it all, except his star only rose because he was an exception to this rule. Plus, none of this is even taking into account the fact that however many of the bankers and financiers who fucked shit up were taught by these fuckers and influenced by their prejudices in the first place.

You could of course argue that this simply reflects how terribly “gauche” our American cousins are and thank god for good Queen Bess and so on, except that would be to ignore the fact douches like Frederic Mishkin decide who gets tenure from pools of international candidates and sit on the editorial boards of international journals i.e. they influence the content and practice of economics here, there and everywhere. It would also be to ignore people like say Professor David Miles, former Professor at Imperial college London, former Morgan Stanley UK Chief economist, former producer of government reports and current member of the Bank of England’s monetary policy committee and all his CV says about how Britain and the USA aren’t necessarily as different as we’d like to assume (to be honest in the meantime Professor Miles actually produces some interesting shit).

So yeah it would be nice to join Prof Crafts in his cheering given his article is essentially making a claim for more economic history, a discipline he is a justifiably acknowledged expert in and which has helped out in policy-setting terms. But, without a greater degree of self-awareness, modesty and awareness of the actual context he can go and fuck himself, that or do the eminent economic historian's usual shit of writing some piss company history that pays enough to buy a new conservatory.

As for "Douche" Mishkin, the Iceland booster, the Serious Fraud Office decision today to arrest however many bods in relation to some Icelandic bank is a fucking joke. Oooh, oh like the worst case scenario here is some billionaires might get fined a couple hundred grand in 7 years time after millions of taxpayer fivers get pissed away on lawyers. Christ shit is totally fucked up.

Daily Mash T shirt

2011-03-08T14:26:00.000-08:00

A blerk who also worked in banking got given the opportunity to pursue his career elsewhere a while back after a blog post he wrote was brought to the attention of the great and the good. I reckon, given how employment contracts and codes of conduct are written and work, this was completely above board. Besides, the chat I heard at the time was that he was an arrogant arsehole, no much use and also dumb/arrogant enough to include his personal details beside a post that lambasted in detail something his named employing organisation had just done. Clearly, all bloggers can learn a salutary from that especially given the current labour market. And yet ……….

The “and yet” for me is predicated on having recently discovered the stats functionality for this thing, like so far today 2 page views on here originated in Latvia. Wow!

Going back to the here and why I started this the primary reason was - after days spent working in banking at a time when you were sat staring at Bloomberg screens that had turned completely red and didn’t have a fucking clue what was going to happen tomorrow - to let off steam by howling at the moon, that and swearing a lot. Except, there was also a vanity aspect to it as well, an admittedly pathetic sense of I’ll show them mixed up with the arrogant notion that I had something, however self-censored, to say that added to the sum total of human knowledge of shit that mattered.

Looking through my actual page view stats provides an excellent perspective on all of this. If I’m perfectly fucking honest I reckon my commentary on university funding, PFIs/PPPs, economic prospects and what no has been pretty fucking spot on and mightily fucking prescient; ahead of the curve even. I also take huge amounts of personal pleasure from the fact dozens and dozens of people have at least glanced at my post about how fucking shite Halfords truly are.

But, the biggest single lesson I take from looking at my stats is how useful it is to include a picture of J0.hnny R0tten’s arse and an explicit reference to J0.hnny R0tten in every blog post. The temptation now of course is to try and optimise my page views by making explicit references to Br!tney Spe@rs, P@mela @nderson and someone a fabulous person tells me is called Meg@.n F0x all the time, that and German Granny Fisting (Deutsch Großmutter Fisting) of course. And oh, oh I should try and get/add links to here basically everywhere really.

Except, all of the above is disgustingly self-referential, self-absorbed and basically a pile of wank. Plus I earn a good wage with my current job so why fucking bother i.e risk it? Instead, I’ll reflect on the fact that since June last year I’ve generated shit like 43 page views from Russia and how freaky that is given its passed without comment and is for a deeply Anglo-centric webpage. So in the spirit of that I’ll say Большое спасибо, that and Halfords is fucking shite.

Eggy Jam

2011-03-07T13:06:00.000-08:00

"When I use a word,' Humpty Dumpty said in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less." "The question is," said Alice, "whether you can make words mean so many different things." "The question is," said Humpty Dumpty, "which is to be master— that's all."*

The White Queen; ""The rule is, jam to-morrow and jam yesterday — but never jam to-day."

Somewhere in the, lets not beat about the bush, UK class structure, there is a magical dividing line. Beneath is “us”, above it “them”. The pay us receive is a potential threat to the economy, it is something the Bank of England is forever vigilant about in case us start getting above inflation pay rises that might lead onto a dangerous wage/price spiral. In simple terms us can’t get chunky pay rises and if us do well lets not kid ourselves the great and the good that set monetary policy would have to take action!

Above the line things appear very different. To run with the Alice in Wonderland motif a bitty longer, above the line the common sense that underpins UK economic policy is viewed through a looking glass. This is where the wealth creators and financial wizards that should never be taxed too much in case they run away to Zurich or else just pay an accountant to get all creative on Her Majesty’s Customs and Revenue’s ass live. Above the line sit private equity bods who pay proportionately less tax than their cleaners, Cayman Island registered hedge funders and the Monaco or Jersey domiciled, but make all their money here tax exiles, all of them clinging on to their multi-million pension pots that are thankfully at a remove from the RPI to CPI, final salary to life time average (or defined contribution), non-contributory to ramped up contributions us have to contend with. Them getting more money is actually a good thing it transpires as opposed to a danger; above inflation pay rises? Brilliant! That'll guarantees Britain retains high calibre execs and besides just think of all the extra goods and services they’ll buy and all the demand that creates for, err, well what really, fancy shoes?

Now you could say there’s no that many so why bother, except the actual magnitude of fivers the super-rich get their meaty fists around is fucking staggering. To take just one example, the £6.5m bonus paid to the Barclay’s CEO equates to 5,711 people on the average wage (as at Dec 10 and including bonuses) getting a pay rise in line with RPI inflation (also as at Dec 10) i.e. just one fucker giving up his bonus equates to all the wage earners in a fair sized town getting a pay rise decent enough to keep up with the cost of living. I would also guess yer bod on the average wage is paid in such a way that the tax man gets a good sniff of their earnings whereas a top whack investment banker is presumably paid thru a long enough chain of off shore, non-dom accounts and companies to put off all but the most forensic of forensic accountants.

Besides, in their own words these above the line feckers simply aren’t worth it. On the one hand you’ve got Sir Fred Goodwin sitting before the Treasury Select Committee saying it wisnae just me and on the other you’ve got Chuck Prince famously going on about how despite him being the CEO he had to keep dancing at the behest of shareholders, execs and what not i.e. the individual cunts getting all this dosh don’t necessarily make that much of a difference (unless they lied thru their teeth of course and they actually truly were completely omnipotent and as such completely liable).

More practical still are the Income Data Services numbers quoted in the latest Prviate Eye about how last year the total earnings of FTSE company directors went up 55% whereas actual FTSE share prices, the only real benchmark of a director's performance and worth only rose 9% (by contrast average weekly earnings in December 2010 grew a fuck all 1.1% according to this). Clearly, the rhetoric we have to live by is that some costs (i.e. "us") have to be contained whereas "talent" has to be retained, whatever the cost.

Translating the above rant into actual policy strikes me as easy enough. To be fair, there’s all this moaning right now about banker bonuses and not incentivising risk taking, yad-di-ya-di-yada and so on, except that’s kinda finite. Rather we should move from the current situation whereby average pay is the be all and end all when it comes to watching out for potential wage/price spirals to one where besides average pay, the pay rises received by different bands of earners should also be taken into account and responded to accordingly by monetary policy setters. There’s a clear “economic” rationale (I fucking hate using rhetorical flourishes like that, I’ll be saying “scientific” next) for doing so given people on different incomes tend to spend their earnings in systematically different ways that impact on inflation differently, so all good in my book. That it would also expose the different economic experience of different categories of wage earners over the medium to long term is of course beside the point. Obviously. You never know, exposing all of the above shite might result in more people getting jam today.

* This strikes me as a useful enough starting point when thinking about the bullshit rhetoric used to legitimise the unequal distribution of economic resources i.e. it emphasises economics is actually about the political economy as opposed to a psuedo science.

As an 8th March P.S. its a fucking laugh the police getting the big public sector spending cut shafteroo. Mebbe next time they'll no be so quick to tip protestors out of wheelchairs. Saying that the initial proposals suggest our lords and masters really are utter fuckwits given Thatcher's miners strike example of making sure the cops are on side before kicking the shit out of protestors.

A 9th March PS this time. So according to Hermann Gartner and Christian Merklthe "The roots of the German miracle" lie in its “wage moderation” that was the result of labour-market policies in the years preceding the global crisis. Really? Lets politely ignore realities like its export based economy and shit like the CD Rom some former private banker handed over to German authorities that showed how all these German bigwigs had been avoiding tax at the same time as most people were having their wages "moderated". Cunts squared. Utter cunts squared.

How shit actually works

2011-03-05T11:10:00.000-08:00

The full title should be “How shit actually works in ways that leave us all getting the bad hurt”, but that was a tad long and so is what follows so I’ll try and keep it short. To begin with there’s loads of different examples and points to be made to substantiate a title like that, here though I’ll stick to 2 and a half.

The first one and a half concerns the Financial Services Authority (FSA). This august institution fucked up so bad with the credit crunch it's absolutely fucking amazing; during the initial liquidity crisis all these schmucks focused on was capital, capital and more capital, except, it was a liquidity fucking crisis i.e. people stopped lending to banks full stop. See the difference? Capital is well capital whereas liquidity is a completely different thing altogether.

That aside, the reality is as follows; some punter goes to work for the FSA, they get on, takes up a supervisory role, meets with bank bods, ya di ya di yada. The bank being supervised or another, similar one then recruits or poaches the self-same supervisor on the basis that they know the personalities, the culture, the rules etc., that actually make the FSA work. But, they're not the only one, rather there’s a revolving door between the regulator and the regulated and so a hermitically sealed bubble evolves, one lubricated by pay rises and promotions. In it the primary focus is on playing the game (between the regulator and the regulated), not the wider economy or even the possible (and as it turns out actual) consequences decisions reached within this bubble have upon the UK economy and society in general.

The half-point concerns building the models banks use to assess risk and identify how much of the all (FSA) important capital needs to be held. Here you see much the same as with the FSA more generally, but in an attenuated form. Like say Bank A wants to build a model to assess the risk lending to say toilet makers poses. To do so it decides to hire a consultancy; some consultants do some lovely presentations to bored Bank A senior bods to win the contract, then do some shit design until hey presto there’s a toilet maker risk assessment model to submit to the FSA for approval that can genuinely claim to have been independently built i.e. it has the imprimatur of Superduper & Co the famous global consultants.

Does the FSA actually understand this shit given the serious maths involved? Too right they do because they've also hired consultants or an actual former Superduper & Co senior bod to run their risk model assessment division. This bod in turn OKs the toilet maker risk model, something Bank A takes note of when it next goes recruiting a head of its risk model making department. And so the merry go round continues.

Except even more fucking obvious vested interests come into play here to an extent that shit gets even more fucked up. The former Superduper & Co bod has a clear and vested interest in saying “yup this model is fucking A”; he could say no cos these guys do badly documented botch jobs and make whopping great assumptions that barely hold water. But, he won’t because that would undermine the claims to credibility and technical competency that justified them getting an FSA job in the first place (and neither actual nor former consultants are that naïve). So instead the model gets approved leaving Superduper & Co to make an even more impressive sales pitch to Bank B, C, D and so on to a point where big chunks of an entire industry end up with much the same risk assessment tools regardless of whether they’re actually any good or not.

Of course any FSA or banking bod confronted in public by the above reality will vomit shite to order about how regulators need to understand their key stakeholders, ensure commercial experience is in place and brought to bear, the benefits of a “breadth” of experience and so on and so on, but really what you’ve got is a magic roundabout wherein the magic derives for the most part from the complete failure to acknowledge the vested interests such processes create, how that impacts on actual decision-making and what impact those decisions have on the rest of us e.g. if some wee FSA cunt is wanting more dosh, they have a clear incentive to not be too harsh on their potential future employers regardless of whether they're a fucking basket case that the taxpayer is going to have to bale out or no.

The second or final point relates to Merv the Swerve King wanking on about banks focusing more on ripping off customers than providing a good (financial) service. The cool thing about people as smart and as Oxbridge as Merv is how what they say usually warrants close scrutiny because its frequently ambiguous, and self-consciously open to interpretation. In this instance, I reckon, the close reading applies more to the tone than the actual words given they were straightforward enough. The context here would be it following on from Adair Turner doing another wankfest speech about socially harmful, useful or whateverul financial innovation. Ignoring the “invisible hand” argument that could be used to rebut Merv’s claims with ease, my guess is that both are sabre rattling because despite their apparently influential positions (Governor of the Bank of England and Chairman of the FSA respectively), both have been sidelined by ConDem politicians currently in the process of stitching them (and us) up by agreeing to let banking go back to business as usual as much as possible as soon as possible to an extent that's left Merv arguing for what should be as opposed to what will. I mean it’s no like it’s the first time he's been kept out the loop except now if Project Merlin did anything it established clear, direct and influential lines of communication between banks and politicians regardless of the feckers actually in charge of regulating the financial system. Cunts.

Super Vox vs the ignorant

2011-02-15T14:36:00.000-08:00

Personally, I think we - as in the majority of people - get the politicians we deserve; trite, smarmy, superficial, ignorant, vacuous, grasping, bigoted, lazy, vain, power obsessed arse biscuit mediocrities for the most part. I'd even go so far as to say that's a reasonable enough reflection of the electorate. For me the point is all the stuff needed to challenge all the kinda shit being used to justify the current mass fucking of the general public is readily available, it's just for the most part people don't bother their arses to get it, opting instead to be spoon-fed, when they can be bothered to eat even more, self-serving, prejudiced pap via the mainstream, mass media.

I've discussed this with a fabulous person about how its dead easy to find good analysis and good questions about lots of important stuff. We disagree. For me though an important example of what's already out there though is the fantastic Vox site, which on a daily basis publishes new, relatively easy* to read articles by economists about economic shit that matters at a time when its fair to say "it's the economy stupid".

To be fair Vox does need to be approached selectively, however doing so ain't particularly challenging. Like skimming thru it it's clear a lot of articles can be categorised as quick as you like.

First off there’s the weird such as “Overweight adolescents and risky sexual behaviour”, by Susan L. Averett, Hope Corman and Nancy E. Reichman, which used “econometric techniques” to show fat birds are more likely to take it up the bahookie (or possibly more likely to admit to doing so, something their methodology doesn’t appear to take into account).

Then there is the stupid like “Awareness of poverty over three centuries”, by Martin Ravallion, which in a manner reminiscent of Fogel and Engerman and Time on the Cross confuses being able to count with having something to say (the author identifies 2 “poverty enlightenments” in the late C18th and then in the 1960s based on the number of times the word “poverty” appears in google books, I shit you not, a “methodology” that ignores tiddly stuff like the Liberal social reforms of the 1900s, the great muthafuckin depression between the wars and the creation of the British welfare state in 1945. Alternatively of course the author has simply failed to spot an American bias in his sources).

And finally there is the “ooh look at me I can do pointlessly fancy sums and graphs” of which there are too many to mention. As a fer instance you could click here.

But, scrolling pass utter dreck like the above, dear god you stumble across some gems. Of course before paying to much attention to them its worth doing a quick sanity check, which essentially involves seeing if the author is at a good university or some other fancy dancy institution. If not fuck ‘em, he’ll get ignored by his peers anyway regardless of the quality of his research because he’s not - lets be honest its pretty much all “he” - in the right conference and journal circles. Or even easier just click on “editor’s choice”.

Anyhoo, aside from bods like Uri Dadush and Bennett Stancil asking fuck off important questions like "Is the euro rescue succeeding?", the latest article I think is brilliant is an historical account of the IMF’s failure to spot the current financial crisis by Biagio Bossone called "At the shrink’s bed: The IMF, the global crisis and the Independent Evaluation Office report".

For me this is a fantastic summary of how terribly important and intelligent people got it utterly fucking wrong. It details the intellectual assumptions that blinded them to what was happening, the vested interests and outside influences that discouraged them from stating what they actually thought (e.g. “they felt their careers would be in jeopardy if their views did not conform to those of the authorities”) and makes some sensible suggestions as to how to make things better, give or take the final pithy comment “Will those who caused the IMF to fail now help it to change?” (Duh, yes! Well at least yes they'll be there making changes its the whether or not these will make a difference that matters).

Great stuff and a model of succinct well thought out analysis all the accountants and management consultants being paid with our tax payer fivers to investigate shit could do well to learn from. Two quick points though. One, I reckon it’d be a piece of piss to turn this article into an account of what happened at all the British banks that failed (and the FSA) in about 10 minutes. And two, yer man writes a great article but I think it needs one more really important thing, which is this – could the cunts that fucked everything up for millions of people please start getting named, shamed and being forced to pay a real price for having done so? Following on from that what kind of pussies does it make us if they don’t?

* Running a Vox article thru a readibility test gives a Flesch Kincaid Reading Ease of 60.8 with a score of 60-80 (the higher the easier) being easy for a 12-15 year olds to understand.

Building a better moron making machine

2011-02-14T12:15:00.000-08:00

For the most part any contact I’ve had with marketing people has always left me thinking they’re a bunch of useless shifters. I can think of one very impressive exception, except he was an academic whereas the standard PLC lot I encounter have been fucking clueless sods who know fuck all other than how to do pretty presentations based on them commissioning other people to do their job (and even then I’ve come across a few fuck ups where they didn’t ask the right questions).

But, despite that the marketing notion of premium pricing seems reasonably applicable to what’s now happening to higher education. The news stories about Oxford and Cambridge setting out to charge students top whack shouldn’t be a surprise to anyone and makes perfect financial sense. To give a practical example top notch companies only go to certain universities when they’re doing the milk rounds, like if you’re studying at the University of say Upper Birmingham Polytechnic you ain’t gonna find a McKinsey’s stall at your next recruitment fair. Hence, going to Oxbridge gives you access to the better paid parts of the labour market, that and it looks good on the CV.

Plus, demand for an Oxbridge education is highly inelastic; there will always be more school kids wanting to study at Oxbridge than there will be places, so much like British gas, trains, etc., they can essentially charge whatever the regulator will let them. Similarly, the second tier of British universities like Birmingham etc., will also charge full or very close to full whack citing shite about how they need the money to recruit top notch academics in what is a globally competitive labour market ya de yah de yah etc., whereas the fucking reality is not charging 9 grand is a huge, ego crushing public admission by a university that it just isn’t up to snuff old bean.

I don’t get it though. Like Oxbridge already has far more cash (endowments) than any other university so presumably doesn’t need it as much. It can also already apply more stringent academic admission criteria so realistically this seems to be about status and fiver grabbing in a way that will only make elite education more elitist, but on primarily economic grounds (charging all this cash for a university education will also fuck the notion of good graduates going into the public sector into a cocked hat – become a teacher? Fuck that, I’ve £27,000 in fees plus student loans to pay off thank you very much).

So nah, for me when it comes to understanding government higher education policy 2 things stand out. One is the incredibly snide and totally under reported utter fucking ConDem bitch move of simply removing all government funding for the arts and social sciences in a way that will make them even more elitist preserves than they already are i.e. in 10 years time the only people writing British history will be the right honourable Jim De’La Cunt, the 15th Viscount of Upper Godlaming, some pensioner who confuses original research with making really big lists or some mental wanking his or her political shoulder chip off across 100,000 turgid words.

The other draws on this lovely quote from a Policy Exchange report, it being a seemingly influential Tory think tank:

“Some of the senior university figures we spoke to speculated that private education companies would not be willing to enter the university sector while the cap on top-up fees is set so low. However, a senior figure in one private education company countered that: “The £3,000 fee cap would not put us off, because there are a lot of inefficiencies in universities. If we charge a £3,000 fee and draw down £3,000 of funding we could make a profit by getting rid of inefficiencies. I feel confident that we could make a ten per cent return.”

So there you are then. All these shite companies are likely to set up mickey mouse universities offering mickey mouse degrees where the only selling point is they cost under 9 grand.

One funny thing about all this is that labour costs in British higher education are already something of a dirty secret; in a sector even more labour intensive than nursing homes the last time I looked a significant minority of said labour was casual and/or traipsing about between institutions on short-term contracts for fuck all money. As a result outside the Oxbridge much of the current cabinet attended, even at good universities students already go years before coming into personal contract with a tenured academic as opposed to a PhD student who didn't realise their studentship entailed spending all their time being paid fuck all to host a dozen student a time tutorials for which they do all the relevant marking. Now this is a resource mickey mouse institutions simply won’t have* and given what an undergraduate degree is going to cost who the fuck would be stupid enough to do a PHD anywhere let alone some Mickey Mouse private sector effort other than the aforementioned mad old gits, political nutters and trustafarians?

When these new private sector providers start selling piece of shit joint honours degrees in shelf-stacking and media studies via youtube, the clear victims will be the former polys they'll undercut on price (unless some US universities set up campuses here of course, which would put the wind up some old academic duffers lovely). This is a tragedy because individual departments within some of the former polys are actually top notch or at least better than a lot of their peers at established i.e. Russell Group universities. Like Bournemouth according to this does better computer science and IT degrees than Durham, except the same league table bods rate Durham 17 and Bournemouth 38 overall.

But, because these stand out departments aren't in places able to charge top whack, I'm guessing they'll get cut back regardless whereas shit to average departments at top whack charging ones will be more likely to get away scot free by coasting on their University's overall score and reputation (a view based on personal, if a bit old, experience). Hence I reckon the overall quality and experience of education in Britain will fall as it becomes much more expensive; students will be paying more and getting less.

As for the ConDems or any future government for that matter, that kind of reality will be drowned out by some shite rhetoric about introducing choice and competition into the sector as if getting a degree was a fucking egg and spoon race. Plus, competition and student choice isn't just inappropriate its already proven to be fucking destructive bollocks given the grade inflation that's seen the 2:1 completely replacing the 2:2. Or as a Professor at a consistently top 10 UK institution once told me when it comes to final exams students on 58 or 59 get bumped up cos its better to give them a 2:1 than get sued and besides their employer can sort them out (I shit you not).

I also can’t get my head round why Lord Browne was asked to provide the ammunition to justify all this given his approach to business management can be measured in lies and lives lost due to cost cutting, like by most definitions that would mark anyone out as a life long ignorant, vicious, nasty wee cunt to be spat on as opposed to being made a profound influence upon Great Britain's cultural heritage.

* On reflection this is probably incorrect in the short to medium term. A lot of people unable to get jobs at existing universities (see that word "unable" i.e. not quite good enough) will most likely dovetail a tutorial here with a mass marking of some degree farms exams there. But, the supply and quality of bods going to academia will diminish in due course give or take the students now hiding out in academia to avoid current labour market conditions.

AS a March 14th P.S. And I've just realised the guy interfering with the car in the pic looks disturbingly like Mr Tumble. Eeeeeeeoowww.

The fairytale moobs

2011-02-08T12:27:00.000-08:00

Once upon a time in a land not very far away there lived a terribly important man. This man was so very, terribly important he became a CEO of a big, big organisation where lots and lots of people worked. And because he was in charge of such a big organisation he got to sit on top of a very, tall pyramid called an organisational hierarchy. Rather than stone or even hay, this was made up of all the levels and lattices and lines you see in pretty organogram pictures. And because the terribly important man sat on top of the pyramid all the little people beavering away like ants beneath him could look up and see that the sun did indeed shine from his arse (the terribly ambitious people who liked climbing pyramids were especially grateful for this because it meant they could see what they were trying to kiss).

Now, because the terribly important man was so terribly important he developed a special management style all of his own that made sure all the things he thought were terribly important got done yesterday, or else. So besides his reputation for having a tremendous eye for detail, the terribly important man was known to frequently harangue people who lived near the top of the pyramid in funny one-to-one sessions. On other occasions, when he was sitting round a table with lots of people drinking tea and coffee and looking at pretty pictures called PowerPoint presentations all about economic profit forecasts, he would ask one special person lots and lots and lots and lots of questions to the point where everyone else in the room would think silly things like “phew, I’m glad I’m not the special person today” and “will the special person still be sitting here next week eating biccies and earning golden pennies?”.

Soon the terribly important man’s reputation spread far and wide, so wide in fact that lots of oopy little people called journalists and media types came from far away lands to say hello and drink tea with him. Often, on these occasions, the oopy people brought magic picture boxes that they used to take pictures of the terribly important man. And so it was that one day some people who also lived in the pyramid looked at these pictures and saw that because of the pretty shirts the terribly important man chose to wear, when a magic picture box flash went “FLASH” you could sometimes see the terribly important man’s nipples in the magic pictures it made.

Now because this is very obviously a fairy tale and not in the least bit true, I’ve no idea what the terribly important man’s nipples looked like. Perhaps they were hairy or perhaps they were bald. Maybe they were pert, erect, proud and perky, I simply don’t know. What I do know, for the purposes of this completely fictional story, is that whenever pictures were taken of the terribly important man, there was always a good chance that anyone looking at the picture would see his man-teets or what some naughty people call moobs. What a to do!

Now though our story becomes very, terribly sad. Because of the terribly important man’s special, magical management style, the people living in the pyramid who’d noticed what magic picture box flashes did were uncertain about saying anything to anyone in case they found themselves carried away by the HR fairies to a place called the Broo where there were no golden pennies or coffee or tea or even biccies for that matter (although I understand they do now have lots and lots of pretty PowerPoint presentations with a growing emphasis on 3rd sector re-employment training courses and human capital initiatives). So instead they chose to keept quiet and all the oopy journalists were left to take more and more magic picture box pictures and all the people who looked at them could still see the terribly important man’s tits. The end.

P.S. I do hope this pretty little story makes it into an edition of Bloomberg, the FT, Fortune etc., and finds a nice, cosy little snuggle bed besides the usual PR riddled fairy tale wank fests fawning over some individual member of the super-rich uber class who helped fuck the UK economy into a cocked hat.

P.P.S. A fabulous person has just pointed out given the terribly important man's fantastic attention to detail (and it really was legendary), mebbe he knew his tits were on show anyway and kinda liked it. Eeeowwwwww.

Strategy, structure and big 'ol titties

2011-02-05T04:45:00.000-08:00

As Alan Johnson proved politicians are rarely the best when it comes to economics, but they do try and talk a good game. Hence, Nick Clegg’s speech outlining how government is “determined to foster a new model of economic growth, and a new economy”. Key to this and every piece of shit politician’s speech is their use of the word “billion”*, a number that in our national lottery age represents more than most ordinary punters could ever imagine having.

Politicians know this so deliberately use “billion” to convey the seriousness and/or importance of things e.g. a debt measured in billions is a big and serious debt – cue stern faces all round. Similarly, a government initiative costing a billion – cue open hand gestures, gentle taps on lectern then a statement pronounced in a slightly higher pitched voice – means the government is serious about something. Except, when it comes to establishing a “new model of economic growth” a billion is fuck all so by implication the point of Clegg's speech - to present the notion that the current government's economic policy is about more than spending cuts - was a bag of shite.

To illustrate why here’s an concrete example of what a billion and some change will actually get you - in 2009 this company owned 42 UK hotels and conference venues in the UK as well as a chain of gyms. Am guessing the bulk of this was financed, ignoring the equity, with the £1.4bn mentioned in the article. So on a rule of thumb basis £1.4bn will buy you 42 hotels and conference venues plus some gyms.

Now back to Nick Clegg – “The Government is also committed to the creation of a Green Investment Bank, with funds of at least £1 billion, to enhance the necessary investment in low-carbon growth”. There’s lovely, except that’s not even enough to buy 42 hotels and conference venues let alone some gyms. Green economic revolution? You're 'avin a turkish mate.

But, s’ok cos Nick also said “We have announced an investment of more than £200m over the next four years in a network of technology and innovation centres, modelled on the German “Fraunhofer Institutes”. Really? So will these also do things like establish the deep infrastructure of skills, contacts, knowledge, reputation, training etc., that actually underpins the competitive advantage German’s mittelstand of mid-tech engineering and manufacturing companies have and we don’t due to the structural decline of manufacturing in Britain? I don’t fucking think so. Howzabout instead of yet another mickey mouse be seen to be doing something scheme we add the £200m to the Green Bank’s £1bn, then see if we can negotiate to buy 42 hotels and conference centres instead (but without the gyms)?

Oh, but hang on reading to the fag end of the speech it turns out we’re also establishing a “£1.4 billion Regional Growth Fund”. At fucking last, finally the government is so serious about something its establishing a fund big enough to buy 42 hotels and conference centres AND some gyms. Now we know they mean business (or is this regional growth fund made up of money taken from other initiatives?),

Back to the bullet points in Clegg’s speech though cos they sound lovely, except they're actually fucking pants.

He said: "Weaning ourselves off debt-financed growth, and onto investment-led prosperity" – Cool, except debt is used to finance investment, you can’t have either or like fer instance am guessing the Green Investment Bank will gear up each of its investment with debt as a matter of course.

He also said: "Investing in the ‘hard’ infrastructure that underpins growth, such as transport" – Cool 2x, except that’s just tarting up the fact the only fucking infrastructure spending left is on roads as opposed to additional, mad mental wasteful shit like schools. ut, he did get to say "hard", oo-er missus etc.,

Then he said: "Cultivating the ‘soft‘ infrastructure made up of knowledge, skills and education that businesses need" – Cool 3x, except how the fuck do you reconcile that with the changes to university funding? Simple. You don’t cos you can’t.

Finally, he said: "Balancing regions and sectors, instead of putting all our economic eggs in one basket" – Cool 4x except as the local authority spending review in England and Wales made clear and as public sector spending cuts will exacerbate over the next 3 years at least, those regions more reliant on the public sector are humped, which will create ever greater regional imbalances when it comes to things like unemployment, wage levels, health, quality of life and so on (but, it will also fuck scousers so not all bad)

And it turns out “Tim Stone, chairman and founder of KPMG's Global Infrastructure and Projects Group” is advising government on its national infrastructure plan, which is like turkeys asking Bernard Matthews (god rest his soul) for diet tips. Nah, all a pile of fucking shite really.

As for the alternative, the “promise” shite Labour is coming out with is almost too depressing for words. First they ripped off the US Democrats with the squeezed middle and now they’re ripping them off with that shit an’all, What a useless bunch of spod-led cocks too wank to even come up with their own empty fucking rhetoric. Instead, all we’re left with is a dismal reality where things like this, as a fabulous person I know pointed out to me are happening.

* This point originates in some comedy thing Nigel Planer did years back I think called the "Actor's Studio with Nicholas Craig"

Pond life

2011-01-31T14:36:00.000-08:00

I mind getting a taxi to the airport one morning to catch the red eye and the taxi driver, having found out I worked in a bank, explaining to me that Fred “The Shred” Goodwin caused the credit crunch. Now, Fred “The Shred” has been accused of many things and arguably not been accused of all he actually should be thanks to employment contract confidentiality clauses and the Edinburgh Brahmin class’s notion of what constitutes polite conversation, but he didn’t cause the credit crunch.

What did was/is straightforward – banks lent to people that couldn’t afford to repay their debts. They did this because they’d started paying people who’d invented a fancy dancy way of pretending people who couldn't repay their debt actually could repay their debt. Then they packaged up big wodges of this debt lent out to people who couldn't afford to repay it and started selling it to each other, only it was labelled "these people can repay their debt". To fund the lending to these people who couldn’t afford to repay their debt banks borrowed loads from awfy flighty financial institutions. When these institutions finally cottoned on to the fact the banks (and them) had kidded themselves and that these people really couldn't repay their debt, they all panicked like girly little bitches and pulled the plug on bank finances. Along the way some former building societies in the UK (and Ireland) had behaved like utter fucking mentals with their lending and given up even caring if big property investors could aford to repay their debt, so everyone panicked even more about them. All this forced government to step in and fill the gaps that suddenly emerged with taxpayer fivers. The end.

Now a patronising sod could bemoan the taxi-driving general public’s wilful ignorance of stuff and given the attention and money people chose to piss away on football and Katie Price they’d have a point. But, I reckon it more usefully highlights the us and them/winners and losers/just as fuckwitted as each other but in different ways divide now rapidly emerging.

The winner’s side recently reached its apogee when Bob Diamond the Barclay’s high heid yin told a parliamentary Treasury Select Committee earlier this month that “There was a period of remorse and apology for banks and I think that period needs to be over". What was even more interesting about this was the new fact that’s just emerged whereby Peter Mandelson appears to have set aside his view that Mr Diamond was the unacceptable face of capitalism so he could coach him for free on how to deal with them there pesky representatives of parliamentary democracy.

Obviously Mandelcunt has a lifestyle, sense of self-importance and dirty hard-on for smearing himself against the rich, the posh and the powerful he needs to be keeping up with and financing, but fair play to the man he once was a shrewd operator; but the period for apology needs to be over? Really?

Nah, fuck that shit. To sort out the financial crisis created by bankers councils the length and breadth of Britain are only NOW i.e. years after this all started in August 2007, planning to make people redundant, military hardware judged necessary for the protection of the nation is being scrapped, pay freezes and pay reductions are common place, vast swathes of teenagers are already being consigned to the employment scrap heap for life, universal benefits that constituted hard fought for political ideals are being ditched, taxes on all the stuff we buy are being raised and the only good time gravy yer average punter got was a sniff of debt financed house prices that are now falling down the swanny, and so on and so on.

So this period for apology and remorse should be declared over is it? Nah, fuck that shit. I mean seriously what kind of fucking head up their arse-piece bubble do those stupid, ignorant cunts live in? Fuck any rational debate and lets just stick to the facts - every time someone loses their job, free home help or a free school bus is proof that lot are just nasty, grubby, fiver grasping ignorant, arrogant cunts.

And saw a pic of Tommy Sheridan on the front of a paper the other day wearing a corsett with his dick hangin’ out. Whit a fanny.

Pickled shite

2010-12-14T13:10:00.000-08:00

Having really dull chat I was explaining some dull transaction that took place a coupla years ago and from which an already very rich person made oodles and oodles more cash to a fabulous person the other night. Her response, am guessing predicated on what’s subsequently happened and will happen, was that it wasn’t fair. She was right and what we’re now beginning to see in all sorts of ways is the way in which that is and will be the case.

Because it was all about an asset value bubble bursting and consequently to benefit beforehand you needed to have assets that were appreciating and could sell, this was/is a financial crisis in which the rich got WAY richer and the quite well off got quite a bit well off-er, but those with fuck all got fuck all give or take Labour’s economic policy of using oil revenues and London and South East England tax fivers to piss new mickey mouse jobs across post-industrial Britain. Now though it seems we’re all in it together.

And if you believe that you are a fucking moron. Now that the political bitch move of cutting central government grants to local authorities is being played out so local government inefficiencies and loony left schemes can get blamed for everything really, the reality is becoming more and more apparent. I’m not English and would have a helluva job pointing out well anywhere in England on a map really, but even I know that Tower Hamlets, Middlesbrough, Blackburn and Hartlepool are arseholes of the world compared with say Kensington and Chelsea. Yet going by the government’s own numbers Kensington and Chelsea will experience a notably lower reduction in its estimated' revenue spending power' in 2011-12 post transition grant, than those other ghastly in a different way places (-5.26% vs -8.9%).

Am sure there are lots of terribly dull facts that could be used to obfuscate this fucking obvious state of affairs, but fuck it. Plus, in shithole towns like Middlesbrough the public sector accounts for a much bigger slice of the economy so when it shrinks (a) it has a disproportionately larger effect and (b) there is a smaller private sector to take the strain. Hence, even a – 5.26% cut in local authority spending would mean more to Middlesbrough than it would Chelsea.

So we’re all in this together? Are we fuck, rather what we’re going to see is more people in already relatively deprived areas having progressively less access to mad crazy indulgent shit like:
- Care for the elderly
- Support services for the mentally ill
– Support for disabled children
- Libraries
- School buses
- Roads without potholes

to a greater extent than any Chelsea tractor driving shitstain married to some city cunt called Alfie and/or Charlie and (a) its no even fucking started yet and (b) its going to go on for at least 3 years. Bring on Ian Bone.

Flipped

2010-12-14T03:07:00.001-08:00

A different headline for either of these pictures would be "Anarchist trapped in photographer circle jerk" because both show how protests usually involve far more media bods than they do feral, mindless, thuggish, yob, anarchists. This is sad because it makes clear non-violent protests don’t count as news or at least not front page news anyway (peaceful protests being relegated to page 24 besides the sudoko and/or the second last item to be followed by a youtube clip of a skateboarding squirrel).

Rather media organisations, both public and private, have a clear angle they impose on all protests. Furthermore, they will only pay top dollar for anything in keeping with said angle. Hence essentially trivial gestures (oh look he’s broken a window just like that drunken sod did down Swindon high street last Saturday night) are hunted down then amplified until they drown out the actual issues being protested about.

This is interesting when you think about it. A public protest is by definition both a gathering of the public and an attempt to influence public opinion. In practice, doing so requires media attention and given the media will only respond to stories, images, etc. of violence, i.e. they tacitly present an incentive to be violent, it appears complicit in the whole process.

That’s probably a tad philosophical in a moral maze kinda style, it’s much easier to simply assume journalists and media organisation owners are for the most part the snidey cunts you think they are.

The other people violence serves of course is politicians and the police because it gives both a good get out clause. Hence politicians can grandstand about feral thugs and the need for water cannon to distract from what was actually going on and the police can hope Mr and Mrs Moral Outraged from Peterborough are too busy being morally outraged to notice officers continuing to cover up their numbers so they can wallop people with impunity, the far, far, far, far greater number of protestors than police that get smacked about and the tactics developed as the latest student protest wore on for dealing with people in wheelchairs (no tactic / tactic).

Indeed, the Metropolitan police in particular have an incredible track record for publically shitting all over victims of their own incompetence. The usual approach sees unnamed police sources briefing journalists off the record about so and so being a bad ‘un, the longest running example of this being the treatment of Colin Stagg in a lets not try and influence potential jurors/cover up our own failure to catch anyone type style. More recently there was the death of Ian Tomlinson where after each and every press release issued by the police to paint thems in as good a light as possible was contradicted by pesky facts, unnamed sources started mentioning a laptop might need to be looked at, nudge, nudge, dodgy stuff, eh? etc..

Hopefully that some ugly auld tart sat on piles of inherited cash got touched by an oik will prove enough of a distraction and Alfie Meadows won’t be subject to any of the disgusting, taxpayer funded self-serving character assassination usually dumped on victims of thuggish police incompetence. And water cannon eh? Is that distracting spin or an expectation of more protests I wonder?

Integrity (what are you doin' to me)

2010-12-05T12:04:00.000-08:00

An enquiry is a powerful means of giving the impression you’re doing something about something. Thankfully if it’s set up right at the outset you can sound all hard and (Spanish) inquisitive in a we're going to cluster-fuck you like hedgehogs on a broom kinda way and yet guarantee nothing actually happens and no one is found to be at fault.

Some obvious ways of doing so include:

1) Making sure the remit of the enquiry is so narrow it can’t enquire into anything that matters
2) Ensuing its status is such that you can’t place too much faith in the answers given to its questions e.g. fibbing isn’t a crime and/or there’s no immunity for witnesses
3) Get as many placemen on it as possible, ideally starting with the chair so no nasty questions get asked
4) Conduct it in secret so no-one is aware of what actually gets said
5) Drag it out for as long as possible to the point where everyone loses interest and rather than the results getting scrutinised the cost and time spent becomes the story.

Those things certainly sprung to mind when I read the Financial Services Authority notice that it’d completed its enquiry into the Royal Bank of Scotland and that no further actions were to be taken. Rather, the biggest fuck up in British corporate history was due to “bad decisions” and most definitely “not the result of a lack of integrity by any individual and we did not identify any instances of fraud or dishonest activity by RBS senior individuals or a failure of governance on the part of the Board. The issues we investigated do not warrant us taking any enforcement action, either against the firm or against individuals”. So there you are then.

Alternatively, lets tick off, which of the above techniques for guaranteeing no action apply here. Definitely 1) given the reference to “(t)he issues we investigated” is clear code for if there are other things that fucked it up well tough tittie cos that wasn’t in the enquiry’s remit and is fuck all to do with us give or take the FSA was responsible for regulating the whole shebang regardless. Don’t know about 2), but 3) definitely does apply given PWC was used to investigate the fecker i.e. a company that makes its living selling accountancy and consultancy services to banks was used to investigate a bank that its business development managers (i.e. salesmen) regard as a major customer/cash cow, which in turn means there was one fucking monster of a conflict of interest. 4) also applies in spades given “The FSA cannot publish the content of the RBS review as information gathered from the bank during the course of the review remains confidential under the Financial Services and Markets Act 2000” and 5) also, but to a lesser extent given in enquiry terms 21 months is kinda quick.

Except, I think the FSA fucked up big time because they’ve created a ginormous, humungus hostage to fortune that should (emphasis on the should) apply in spades to all their other reviews by stating there wasn’t a lack of integrity. Now, integrity is a powerful word; its use here is intended to convey the impression that the RBS executive and board made honest mistakes i.e. they may be utter fuck-ups, but they were fuck-ups who fucked up in good faith.

Fair’nuff, except how the FSA defines integrity can be publically stated because it is in no way a commercial secret, rather it’s a generic quasi-legal notion. And the notion of integrity in British banking, or at least parts of it is open to serious question.

In the absence of an FSA definition I looked up a few definitions of integrity and would say wikipedia’s is the best (for my purposes anyhow). It goes on about how integrity as a concept concerns consistency of actions, values, methods, measures, principles, expectations and outcomes. It continues to describe how in ethics, integrity is regarded as the quality of having an intuitive sense of honesty and truthfulness in regard to the motivations for one's actions. Moreover, integrity can be regarded as the opposite of hypocrisy, in that it regards internal consistency as a virtue, and that parties holding apparently conflicting values should account for the discrepancy or alter their beliefs. …… As such, one may judge that others "have integrity" to the extent that one judges whether they behave according to the values, beliefs and principles they claim to hold.

Now that is some powerful shit for a regulator. Put simply did senior bods at RBS and all the other banks being looked at actually behave according to the values, beliefs and principles they claimed to hold and/or espoused? More straightforwardly, and relevant here, did they behave in line with their company’s stated policies and processes when they lent money or did they do things like lean on more junior staff to do what they were told and not what they thought was right, did they take short-cuts when it came to following documented and established credit sanctioning procedures, did they "finesse" the analysis of financials and subsquent fulfilment of post-sanction drawdown conditions, beforehand did they always emphasise the positive as opposed to the realistic when it came to assessing a proposition's propsects despite credible, contradictory views being readily available and so on and so on etc., etc., in ways that are fuck off easy to find out given credit applications are well-documented things people remember?

Hmmmm. By this definition most lenders know for a fucking fact some senior bods did not behave with integrity and made lots of bonus cash for themselves by doing so. There again given the FSA said everything about British banking was hunky dory until it wasn’t it's got a mucho vested interest in its utter fucking shiteness not being disclosed, In fact I'd guess there’s no chance any of its enquiries will generate anything other than more whitewashes. Rather the best we can hope for is for the UK economy to not end up like Ireland by default and for only a few million more taxpayers’ fivers getting pissed away proving the great and the good might not be great, but at least they had integrity.

A Dec 6th P.S. - aside from revisions to the above that friends of Sir Fred Goodwin are asking for the report to be published lets you know how fucking shite it is. There again he's probably hacked off with being the scapegoat, which is fair play cos then mebbe some of the other fuckwits who fucked things up would start getting scrutinised. Except given what actually passes for scrutiny that'd simply generate more expensive wastes of time give or take pointless op-eds by financial commentators so clued up they keep forgetting/don't know Sir Fred first earned his "Shred" nickname when he was at Clydesdale Bank.

stop it

2010-11-23T14:31:00.000-08:00

Latest comments on the current mortgage market taken straight from the BBC website - "The lender said potential buyers were being deterred by the uncertainty generated by the government's public spending cuts." - no, actually that's utter fucking shite.

The reason the mortgage market is at historic lows is because people can't afford the deposits now required to buy a house. I mean for fuck, fucking sake. Like seriously, for fucking, fuck, fucking, fucky, fucky, fuck, fuck sake - people can't afford mortgages anymore. That's it, that is why the housing market is fucked for the forseeable future. Sure there's some consumer confidence uptown downturn wank pissing about on fringes, but the overall state of the market is (like it has fucking been for 2 years now) explained primarily by the restricted supply of new mortgage finance. That is fucking it.

So why in fucking, fucking cunt of a christ on a syphilitic bike is that utter fucking in your face like an ambidextrous jizz lobbing pervert gone fucking mental down the high street with his willy banjo fact not simply accepted and every alternative factor told to go shut up and fuck itself rough in a shitty corner with a hard, jaggy stick so our esteemed political and economic leaders can be left to debate how to respond and how to address the factors that underpin the current situation as well as the possible impacts of any policy responses? Utter cunts.

Aaaarrrghhhh!!!!!

Nov 24th P.S. I guess the above is part rhetorical question part rhetorical request. If there wasn't this rigmarole of tossing one off over some mortgage lender's latest self-serving press release we'd have to consider actual important shit like:

- should there be a maximum loan to value and if so what should it be?
- securitisation, the rocket fuel that drove the housing market, is fucked. Is that a good or a bad thing and should or can Britain try to start it again?
- what is the role of the state in the mortgage market, a lender, a guarantor and so on?

Much better to ignore shit like that and let politicians fixate on banker bonuses/wank on about lending targets, etc.,

Going, going ...................... fuck you

2010-11-23T12:00:00.001-08:00

I’d be grateful if you would be kind enough to ignore the recent banking reality and concentrate on the theory in the next paragraph.

How much to charge when lending money is relatively straightforward – the greater the credit risk i.e. the risk of the debt not being fully repaid, the higher the interest rate that should be charged. Hence, whereas I’d charge a fine upstanding nun with a million pounds in the bank say 2% to borrow £50 off me for a week, I’d charge an insane heroin addict living on benefits and already owes Big Ian £10,000 say3% or mebbe even 150% to borrow £2,000 off me for 10 years.

Much the same principle applies to government debt. Hence, the successive spikes seen in how much Greece, then Ireland and Portugal and latterly Spain have to pay to borrow money; all these countries are heavily indebted and are suffering the after effects of a mixture of mental public spending, property crashes, making lots of Port etc., So it all seems perfectly fair I guess, in fact the spread that’s emerged between how much Germany pays to borrow and what PIIGS pay could arguably be presented as a good thing; it’s the bond markets (government debt being sold as bonds) inflicting the necessary discipline on otherwise unruly governments, there’s no such things as a free lunch, no pain no gain, etc.,

Except, that argument can go fuck itself up the nose with a shitty, rabid dog cock. For starters all these countries previously paid pretty much the same as Germany, that insane bunch of inflation haters with an incredible manufacturing base/export record. So err yeah, the people currently doing the disciplining where “experts” whose institutionalised methodology could barely tell the difference between Germany and Portugal for fuck sake, the latter being a country whose capital city is absolutely fabulous and totally worth seeing, but from personal memory was backward enough to have street beggars suffering from horrendously advanced elephantitis.

But, setting that general fucking utter and total ineptness to one side, there’s the lovely wee causal chain now in motion that raises a number of questions:

1) Bond investor suddenly gets the willies about country A and herd mentality kicks in big time
2) What country A has to pay for its debt spikes as a result
3) Country A is no longer able to borrow/can’t afford to borrow any more cos of the spike
4) Country A gets a bail out from the ECB, the EU, the IMF, MFI, WTF, etc.,

The thing is though throughout this process Country A makes this simple claim (in amongst a raft of others) – our bondholders will be fully repaid, we will not default on any government debt.

Obviously, given it’s a politician, it’s perhaps wise to take this kind of shit with a grain of salt, but because the Eurocrats don’t want any member state defaulting, there’s a huge fucking in your face dollop of truth in it. Hence when defaulting becomes a real possibility the EU steps in and hey presto the bailout means country A doesn’t.

Now lets get back to banking basics here for a mo, which is the risk should be reflected in the reward. Except, for investors in bonds this simply isn’t the case; they get the rewards, you fucking bet they get the rewards, but when the risk starts to appear and push comes to shove allova sudden a bailout happens and it disappears again because France and Germany have stumped up the readies.

But, hang on in the case of Ireland its up shit creek because the government put the Irish people on the hook for the Irish banks whereas now the day has been saved because Germany (and France) have in turn put themselves on the hook for Ireland, so shouldn’t this same indirect on the hooked-ness now apply to Irish sovereign debt i.e. shouldn’t their cost of borrowing fall back to German levels? Not yet it hasn’t, which leaves me thinking we’re in a heads you lose tails I win situation as far as it goes with investors in government debt because as the cost of government debt increases so the risk of default (due to this forcing a default) recedes.

The one caveat and potential saving grace here is Spain. Ireland and Greece (and Portugal) are all very well, but their actual economies just aren’t that big so as a result can all be readily sacrificed/bailed out to appease the sovereign debt gods. Spain on the other hand is big. In fact in credit crunch banking parlance it’s arguably to big to fail, so as bond investors and speculators start speculating for their own short-term personal gain with this ramping up what the Spanish government has to pay to borrow as a result, one obvious option that emerges is to let the risk-reward aspect of lending reappear. In fact fuck it lets get co-ordinated on their fucking asses and have a pan-European sovereign debt default, which would leave the greedy fuckers looking about for someone else to lend to and then after realising perhaps North Korea isn’t the safest of options at the mo, mebbe a 10% haircut on debt I was already getting 6% or whatever on isn’t so bad after all. Except we won’t because we’re sad cunts.

Daft laddie and the magic porridge pot

2010-11-22T14:33:00.000-08:00

Most people in social housing (two thirds according to this note) claim housing benefit. It’s kinda confusing then to read the lovely new government proposal to allow social housing rents to be raised to 80% of the local private sector market average. So is housing benefit going to be increased to cover any (and all) increases then? That seems a tad unlikely given the emphasis is on cutting or at least capping housing benefit spending, which leaves me thinking tenants will be expected to pay the difference. Except, as already noted, most social housing tenants receive benefits to pay their rents i.e. they are by definition poor, so where exactly are they going to find the cash to pay any increased rents, the magic porridge pot?

The other thing that gets me is the notion of introducing regular means testing of social housing tenants. The rationale for doing so is so obvious enough if somewhat disgusting – if you can afford to rent from the private sector, in other words you’ve got a job, you shouldn’t be in social housing. But, given the proposal to allow social housing rents to rise only so far as 80% of the local private sector average, it’s very clear that even at its worst social housing will still cost less than the private sector alternative i.e. a policy that forces people out of social housing into private accommodation actually creates a clear incentive to not find work (or to only find very low paid work) because if you do (a) you lose your benefits, (b) you’ll have to move house, with all the uprooting that entails, and (c) you’ll have to pay more in rent so could well be no better or even worse off financially.

This perverse disincentives argument also applies to the waffle being spraffed about making it easier for social housing tenants to move between housing associations in search of work; if you do so successfully, then again by definition you render yourself ineligible for social housing. There again capping the housing benefit individual’s receive is likely to make moving in search of work less of an option anyway given high employment areas tend to have higher private sector rents.

Picking through those obvious contradictions (and the punitive approach to being a benefit claimant they embody) is quite an interesting thing I think. There’s a rhetoric of get on your bike and various other moralising shite being used to legitimise them at the same time as the market signals they actually send out are hopelessly contradictory to the point of being arguably counter-productive. Given that I’d categorise them as being more ideological gestures than anything else, in fact I’d categorise them as being expressions of dogma especially given unlike say the bankers’ bonus tax they are permanent rather than temporary measures. Following on from this is the extent they appear to exemplify a reworking of the relationship between the state and the individual and associated expectations as to what the limits of the welfare state should be i.e. this is some pretty heavy shit.

Looking to the left though, well Labour, I’ve no sense of there being any especially meaningful response let alone critique. Partly, this represents a Labour elite’s focus on power politics and tactics – lets have a 2 year policy review so we can come up with a strategy for the next election and in the meantime avoid any meaningful engagement with what’s actually happening give or take the odd huff and puff. Partly part II itts because of a depressing failure of imagination on the part of Labour’s grassroots where the universal response to pretty much anything is to (a) identify a problem and (b) recommend throwing more state at it to solve it in an environment where because the rules of the game have been accepted (by the Labour elite), this simply won’t happen.

The end result of all this is rather straightforward – just in time for Crimbo it looks like single mother’s the length and breadth of the country will be looking forward to living without something else to make sure their kid(s) have a roof over their heads. But, that’s all good cos its not as if they’d ever take to the streets in protest (government nursery arrangements being what they are), so fuck them I guess. Now, Kate Middleton aside, whose next on the list for getting royally fucked?

No idea what to call this post

2010-11-19T13:10:00.000-08:00

I was lucky enough to directly hear one of the best comments I’ve heard or read about the credit crunch. It involved someone I'd recruited to a job well below his abilities (in my defence he gave an atrocious interview) and some other bloke who was a refugee from a much sexier part of the bank who had previously taken part in some of the big deals that made my employer the institution it is today. Anyhoo, the guy I recruited was moaning about how things were post August 2007 to which the former dealmaker replied “Aye, but you didn’t complain before when you were getting your annual bonuses did you?”

Touche you might think. Check mate even. Except as the guy I’d recruited quietly explained he’d have happily foregone the extra £500 his dealmaking superior’s antics had generated if it’d meant he’d still have a job next year, what with his bonus just scraping into 4 figures as opposed to the high 5 possibly 6 figure bonuses dealmakers were paid.

To me, that perceptive appraisal has much wider applications. The way the good times actually worked out for the most part meant most people only ever got crumbs off the table – a new arts centre here, an income tax call centre and associated shit pay job there i.e. a wee bitty extra, but not too much. By contrast, the people that caused the credit crunch profited from it big time and for the most part still are.

Except, now what with the January 2011 VAT hike, pay freezes and April 2011 onwards government spending hack backs and so on we’re moving into a reality when as many of the crumbs as possible get taken away. In fact I’d guess millions of people will be handing back more than they ever received.

On a lighter note the guy I recruited recently jacked it all in to travel the world to the envy of everyone who knows him. The dipshit he had the discussion with on the other hand is still there, still clearing a fat pay check.

Stupid cunts (being us)

2010-11-17T15:03:00.000-08:00

Reading Robert Peston’s recent blog about how Ireland, the nation that is, is propping up its banking system, which in turn is being propped up by the European Central bank, a coupla things struck me. One, obviously, is the fact Ireland voted no to the EU constitution as recently as 2008, so it’s a big ha ha there. The other is the extent to which successive Irish governments have chosen to prop up their banking sector on as easy and no questions asked wherever possible basis (e.g. the blanket guarantee given to Irish depositors, which put the Irish taxpayer on the line for fuck knows how many billions of Euros in the event of a bank going bust). But, what really put all that in perspective was an email from a fabulous person today telling me how yet another Scottish local authority is hacking back its spending on musical tuition for children.

I’ll explain; the credit crunch that we are now living with and ain’t going away for the foreseeable future (no its not gone away, look at any mortgage comparison website and compare the loan to values on deals available today with what was available before August 2007. Then tell the British Bankers Association to piss off every time they claim mortgage lending stats reflect restricted demand rather than a conservative step change in supply) may have originated in some super duper complex sub prime securitisation financial engineering shite in the US that in turn engendered a crisis of confidence that rapidly destroyed the unproven balance sheet financing models adopted by banks and former building societies here and in Ireland, but actually, from a UK and Ireland perspective it was to do with shite lending.

Put simply, bog standard commercial bankers and retail i.e. mortgage lenders adopted the view that property values could only ever increase. In fact not only could they only ever increase, they could only ever rise rapidly to the extent entire banking organisations (and government policy lets be honest) were structured around that one, simple over-arching principle. Only lend 70% loan to value? Nah, fuck that make it 80, 90, 100 or even 120% in some cases cos it don’t matter cos the property market will only ever keep on rising.

Now, this isn’t rocket science and neither is it casino banking (Well it is in that its taking a punt, but its not the pointless split of investment banking from retail banking shite Vince Cable has a hard on for). The end result was they lent way, way too much against property. Like seriously, way, way too much.

Except in Ireland the property market has fallen into an utter fucking blackhole leaving the following reality:

1) With positive noises from fund managers providing the mood music bank CEOs (and their marketing and strategy departments and what not) ordered their people to lend more cash. Pronto.

1) Basically if you want to do that in banking you do so by lending more against property, hence fuelling a boom.

2) The people who did the lending met sales targets set by the great and the good and as a result got good bonuses (not investment bank mega bonuses, but good bonuses relative to the national average wage).

3) Anyone who queried this kind of lending got fucked over by organisational politics, hence all the backroom bods quickly learned to say yes to every deal so they’d get a promotion/get a not as good as the schmoos doing the actual lending, but still quite healthy bonus.

Now picking through all that the reality we've all been let with is incredibly straightforward and is as follows; the fund manager fuckwits that looked positively on massively increasing shit lending are most likely still in place.

All the CEOs, corporate bigwigs etc., who gave in to the fund managers, didn’t know any better, but set sales targets regardless are either still in place, are already earning mucho cash working for a different financial services company or have fecked off to the Algarve to piss away their early retirement pension on being cunts.

The cunts that did the actual lending? A LOT of the schmoos that did the shit lending in the first place to meet those targets/get those bonuses have moved over into bank business repair teams to sort out the shite they put on the books in the first place, but on the same salaries.

So there you are then. Few if any people that did well out the boom times have done badly during the subsequent crash they helped engineer. And that’s kind of it (in fact there are some scum who did well out the boom and are going to do even better out the crash, but that’s a different post).

Except, its not the end because to save their banks entire nations have been put on the line and to be able to afford to do so, as fabulous person informed me this morning, because of this governments are doing things like denying hundreds of kids music lessons.

What I don’t get to the extent it confuses the pants off me is the utter failure to connect these two realities and take real umbrage as a result. I mean back here its not as if its hard to work out who the worst mortgage or commercial property lenders are in British banking history, nor is it especially challenging, given what's in the process of being done to say family allowances, to spell out how the personal decisions these gits personally profited from have ultimately done more damage to things like the family than Josef Fritzl.

Social housing vs the free market

2010-11-14T06:35:00.000-08:00

Right I’ll try some pseudo academicky stuff for a change.

Social housing; while the housing element of this term is straightforward enough to conjure up images of high density housing units clustered into estates in secondary and tertiary urban locations, the social, especially now, is a politically contested notion. The use of the word “social” rather than “council” in itself reflects the fundamental shift in government policy wherein primary responsibility for the provision of housing has been moved from local authorities to housing associations. Ironically though “social” is arguably a more accurate description given it reminds us of how social housing originated in explicitly socialist politics that in turn highlight how competing ideological notions of the social have played a part in shaping the very geography and architecture of social housing, most obviously via the influence Welwyn Garden City had on the first generation of social housing. Rather than at times idealised notions of communal living and "proper" living, right now the terrain is shifting once again, becoming seemingly narrower in the process as the “social” becomes largely a matter of eligibility.

The origins of this partly reside in the Thatcher years when the housing acts of 1980 and 1988 started to unpick then historic constraints on private sector rental accommodation. These originated in WWI as a response to rent strikes along Clydeside that threatened to undermine the war effort. Confronted by this the government chose to sacrifice the petty capitals tied up in the private rental sector to the interest of the nation and the big capital of munitions manufacturers; it did so by introducing rent controls (for which read constraints) that, in an age of galloping inflation, effectively priced private providers out the market by limiting their ability to charge profitable rents. The resultant hole would in turn be progressively filled by the invention of mass council housing that over the subsequent decades saw the state become the landlord not so much of the working poor as of the working class.

However, while Conservative governments started the process it was the last Labour government that fundamentally changed this relationship. The graph on housing tenure presented above neatly shows how the decline in social sector renting was matched by increased renting from the private rental sector, a transition driven by the successive tightening of eligibility criteria used to ration a shrinking social housing stock. Put simply this graph tracks the emergence of today's situation where being able to afford private sector rents in itself largely disqualifies people from social housing. Instead social housing, for new tenants at least, has been rendered almost entirely an issue of social need; a safety net as it were as opposed to one more universalist aspect of the welfare state.

With this as context the take off seen in the buy to let (B2L) market over the 10 years to 2008 makes even more sense. This was partly a consequence of a cheap credit fuelled housing bubble to be sure, wherein small-scale investors sought to prove their financial acumen by riding a passing wave. However, the take off in B2L was also integral to this deep reworking of the relationship between state and citizen. I would argue every B2L investor who borrowed to buy a 2 bed newbuild city centre flat is as much the embodiment of Labour policy as any right to buy former council tenant was of Thatcherism. Unfortunately for Labour's electoral fortunes, this was too tacit a process and so predicated on market signals as to have largely gone unnoticed. Unfortunately, for us the ConDems either don’t understand what happened or frankly couldn’t give a flying fuck.

To be fair to Labour they did try quite cleverly to exploit the housing bubble. New housing developments over a certain size had to include and/or pay for new social housing units. Plus, they actively encouraged housing associations to borrow more to build more in the now passed. And that is the problem we now have; Labour hardwired the provision of new social housing to a property bubble that has long since burst and is unlikely to re-emerge, if at all, for the forseeable future. To give a brief example, encouraging housing associations to borrow to build is all very well, but it's no longer clear that banks actually want to lend to them given the relatively low returns on offer.

So what we now have is a situation where the number of households in Britain is set to increase faster than the actual housing stock with no sign of anything or anyone stepping in in response what with government focused on avoiding any form of capital spending and bank led credit constraints limiting the scope for B2L investors to re-emerge in especially significant numbers. This is especially unfortunate given the reworking of social housing policy now underway, most obviously the (re)introduction of caps on the rents government is willing to pay. As I understand it the current government view is that if it pays less rent, then rents will fall. Except, that was tried before, in 1915 in fact, and it simply didn’t work. Rather, what we are going to see in an already crowded nation is more people being squeezed into ever shabbier accommodation. Cunts.

A.S.H. are C.U.N.T.S

2010-11-10T13:11:00.000-08:00

I’m smoker. I enjoy smoking. I am also addicted to smoking, something I realise every time I take a break from work and trudge outside into the rain for a puff. I’ve also had a coupla years postgraduate training in social science research methods at a leading European institution, but even without that I could still rip ASH’s report on “The economic cost of tobacco in Scotland” to shreds, then wipe my shitty arse on it in an environmentally friendly, recycling styley. In fact, the only thing interesting about the ASH report is what it says about the emerging common-sense now breaking out like a pustular rash across the public sphere.

But, I digress, the ASH report is fucking shite. Notice the choice of title for starters, it’s not just cost, it’s “economic” cost, woooo, cos economists are good at understanding things aren’t they, like I dunno, the credit crunch? Alternatively, its a spurious rhetorical flourish invoked from the outset to tart up a piece of shit exercise in vested interest, cockamammie pseudo scientific spleen venting wank.

That aside, the big problem people who make a living moaning about smoking have to face is the brute fact that taxes on fags are so high it generates more in revenue than it costs to treat the consequences. End of, or at least it was in Scotland until this report came along to state that smoking generates £940m in fag taxes, but actually costs the economy £1.1bn.

This magic £1.1bn is primarily made up of £271m in treating smoking attributable diseases and £692m in productivity losses (the remaining costs being relative fag ends by comparison).

Starting with the £271m, this is pretty incontrovertible I guess except people tend to die of something and in the process incur costs. Oh and then there’s the rapid growth seen over the last few decades of the old-old population, you know they old-old feckers that are being used to justify fucking everyone else’s pension cos its too expensive. And yet at the same time as everyone else’s (including my) pension is getting the big, hard wahoo, they old-old feckers remain subject to the exponential likelihood of lovely things like dementia, which in turn require care and as a result incurs costs. But, that’s OK cos as the ASH report’s authors’ blandly state “in the absence of Scottish lifetime care cost studies, the perspective adopted for this report will not examine differences in end-of-life care costs,” i.e. they refuse to compare the cost of say treating a smoker who dies at 70 with lung cancer with the cost of a non-smoker who dies saturated in pools of his incontinent piss in a state funded care home at 95 having thought his name was Molly for the last ten years of his life throughout all of which he claimed a state pension. So in a report that claims to be cautious, conservative etc., anything likely to get in the way of their argument/prejudice gets discounted, which is a bit of a shame I guess.

Actually hang on a mo, given the kerfuffle over unfunded public sector pensions, shouldn’t we all encourage public sector workers to start smoking 20 a day once they hit 45 to reduce the fiscal deficit, I mean think about it that would both increase the tax take plus shorten life-spans that would ease the pension fund deficit etc.,

Anyhoo back to ASH and productivity, which is the trump card they’re trying to play; ASH rightly highlight how smoking varies with socio-economic class, in fact they go so far as to state “Smoking is also strongly patterned by deprivation; 43% of adults in the most deprived 10% of areas smoke compared with only 9% in the least deprived 10% of areas8, resulting in marked inequalities in smoking-related disease and mortality”. Fair play to them given that indicates taxes on fags are a tax on the poor, except I don’t think that’s what they mean or realise the implications of what they’re actually saying, which is the deprived i.e. in many cases the unemployed, are disproportionately more likely on a systematic basis to smoke fags i.e. people who are unproductive in an “economic” sense.

This is a shame because the subsequent references to extrapolating from one or two studies on the effects smoking has on productivity make no reference to this systematic bias. I think this is a bit of an oopsy in a Scottish context, but, hey ho there is a reference to some bod who studied 200 Scottish working people a few years back when more people smoked, which is nice I guess except that’s not a representative sample in anyone’s fucking book. More importantly the £244m estimate used seems (it’s not clear) to be based on the additional time spent away from work by smokers. Except, to give a personal example, I work more than my contracted hours most days of the week, most weeks of the year; smoking enables me to do that, so on a net basis? No fucking loss. However, the authors also state “It should be noted that, amongst smokers, there may be positive effects on performance associated with smoking breaks …. e.g. improved concentration or reduction in perceived stress versus withdrawal symptoms caused by nicotine abstinence). However as studies to date have not included such variables it has not been possible to estimate any impact this may have.”

So there you are then, the potential positives aren’t taken into account. More fucking generally, going by the National Institute for Occupational Safety and Health, “rest breaks helps workers to be more relaxed and calm on the job and helps to enhance productivity and leave the workers more physically and mentally refreshed” i.e. fag breaks can be a clear positive.

Actually, am getting bored with this now cos it’s so fucking shite. It’s like oohh, oooh, they know what fungibility is so if you were to point out smoking generates lovely income tax, national insurance and corporation tax from the people and businesses engaged in making, selling, wholesaling and transporting fags, which they haven’t taken into account, they would then wank on about how smokers would spend the money on something else anyhow and ignore the fucking obvious points like chances are it wouldn’t be made in Britain if it was and chances are it’d generate less fucking tax revenue regardless. It’s just fucking shite really, the kinda shite a real study would show was toss because on a net basis taking direct and indirect costs and benefits fully into account it would be totally clear smoking is an “economic” positive.

So nah, while the fact one of the people who reviewed a draft was an advisor to the Policy Exchange i.e. one of the Tories favourite think tanks, may have given me the willies, the real meat of this report, because of what it exemplifies, is the fact it's using a spurious cost saving argument given all that says about how we’ve moved into an age of austerity wherein if the rhetoric ain’t about cutting costs and/or public sector spending it ain't shit. More positively, looking at page 13 of their latest annual report the vast majority of ASH’s funding is from the public sector, so hopefully the ignorant fuckers will get the big wahoo next time they go sniffing round for taxpayer's fivers to piss away on shite.

Nov 15th P.S. My personal experience of Brian Monteith, the former Tory MSP, is limited to my having been unfortunate enough to find myself in a rather good French restaurant at the same time as he was engaged in a very, very LOUD conversation with Michael Fry, who the Guardian describes as a former Tory. The food was good, as always, but due to noises in the background conversation was impossible. To suddenly discover upon reading this today that we’re both critical of the ASH “research” for many of the same reasons gives me even more reason to loath ASH.

Mebbe there’s a libertarian argument to make about it all with ASH a state funded bunch of fannies desperate to impinge on adults exercising their right to choose, mebbe there’s no. Or mebbe ASH illustrates how the therapeutic state (a posh post-modern alternative to the nanny state term of abuse) is as guilty of as many sins as big business what with its lobbying, its self-serving research and its vested interests and as such should be treated with as much disdain and cynicism. Or mebbe it’s simply my view that the rhetoric and approach ASH chose to use is an example of how in this age of austerity, arguing for cuts has become the new common sense. I don’t know. All I know is that ASH are a bunch of bastards that have left me feeling as soiled as a non-smoker’s clothes in a room full of 40 a day addicts.

Down with this sort of thing Pt II

2010-10-31T04:57:00.000-07:00

The Vodafone protest is the best protest of the decade. End of.

1) It has a nice, clear, recognisable well-defined target - Vodafone
2) It has a nice, clear, easy to understand and readily achieveable objective – getting Vodafone to pay up what’s claimed to be its real £6bn tax bill
3) It is neatly linked into the current political-economic situation – Vodafone paying this supposed tax bill will reduce the pressure to cut public spending
4) It has a clear and motivational moral imperative – fairness
5) It has potentially much broader ramifications such as the tax law surrounding all this and associated processes would be/are open to potential scrutiny, other companies may be reassessed, the links between big PLCs and the political process/politicians (e.g. the anti-file sharing legislation rushed thru parliament shortly after Peter Mandelson met David Geffen in Corfu), etc.,

Because of all this it won’t get the same coverage as say the US Rally to Restore Sanity and/or Fear and will probably fade away quite soon. This is for various reasons including it’s too practical and dull, it cuts through the political process and associated media superstructure, there's no need for any self-serving pseudo-psephological “analysis”, it lacks any ultimately dumb big ideals for liberals to cheer about and there are no headline grabbing personalities involved either. Plus Vodafone's corporate communications department will be working their guts out to kill the story.

Ideally, what's needed is for Simon Cowell to get involved on the protestors behalf, mebbe even Jordan or worse case scenario the percussionist from Radiohead, anyone but Billy Bragg basically. Except they won’t.

Nov 5th P.S. - seeing as its Guy Fawkes night and all that says about burning effigies and bastards more generally it was interesting to listen to the ace File on 4 programme about tax dodging PLCs, which made specific reference to Vodafone stating "Vodafone agreed a £1.2 billion tax settlement for Luxembourg
and related tax disputes dating back fifteen years. That’s a lot of money but it’s a billion pounds less than Vodafone had provided for in its accounts", that provision signalling the potential bill could have been higher than what was eventually paid if not quite £6bn or whatever. Of course prudence (for which read caution) would dictate sticking a big number in the accounts, so the £1bn extra is no more than indicative, but even so.

Was also interesting to read about people being done by police for protesting outside a Vodafone shop in Brighton on the grounds that their refusal to leave constituted a threat to "public disorder and intimidation", i.e. they were presumably successfully stopping people buying mobile phones from Vodafone.

So a big PLC would seem to have successfully bilked us all out of however many millions of pounds and in return taxpayer funded police arrest taxpayers for complaining about it?

Dec 9th P.S. Brilliant!!!!!!! I was totally wrong. So sure on Saturday there the BBC didn't even name the "organisation" behind it in its initial reports about the latest Vodafone protests, but allova sudden what's now called UK Uncut is actually gathering a head of steam, geting some rather lovely attention on radio 4's today programme and there's a new mass protest planned for Dec 18th. Last shopping day before Christmas and sales are going to be blocked at arcadia and vodafone stores. Utterly, utterly brilliant and the best political development of the decade.

Evil croissants

2010-10-16T03:28:00.000-07:00

The quango cull reminded me of croissants, that and the limitations of democracy as practised in Britain. Listening to Francis Maude pretend it was about re-establishing democratic accountability in Britain this morning on radio 4 as opposed to the cutting out wasteful inefficiency it was originally presented as I thought what a fanny. Besides the obvious realisation by the ConDems that they ain’t gonna save much money there’s the self-inflicted wounds it inflicts; politics is oiled by patronage, quangos or at least a seat on the board of a quango and the associated however many grand a year dished out for spending a coupla hours a month pontificating gave politicians a fabulous resource with which to reward friends and neighbours. Cull too many quangos and all that patronage gravy goes bye bye.

‘fessing up to that would allow politicians to claim they were above board, on the level and all that kinda jazz, except doing so would be to admit the role patronage plays in the political process, which they won’t. So instead it looks like a stupid mistake unless of course the transfer of responsibilities to organisations for which politicians have direct responsibility is actually going to happen and make a difference, which brings us back to croissants.

One day one of the major supermarket chains conducted an experiment. They did some nice straight forward labelling, which assigned traffic light ratings to the contents of different types of croissant. Sales of the croissant that had lots of red lights on it fell. Sales of the croissant with more green and amber traffic lights increased. The end. Except it wasn’t, the supermarkets subsequently campaigned vigorously against the Food Standards Agency (a different FSA) making the traffic lighting of food according to its sugar, fat, salt content etc., a legal obligation. The supermarkets won so instead we have all this shite about RDAs and this and that and what not i.e. an overly complicated system no one really understands or can be arsed with so largely ignores.

This is a bad thing. Pleb morons don’t care cos they believe they have the right to eat shite food. Middle income liberals are too busy wanking over farmer’s market organic cheese to notice while fat, fat fatties have glandular issues and big bones that mean they have to eat hunners of choccie biccies and avoid any exercise. But, on balance and on average, a straightforward traffic light system would probably see some incremental shifts in what people eat and put pressure on supermarkets to tell the manufacturers that supply them to change their contents in favour of less obesity inducing stuff. Except, that would cost money and possibly sales, hence their vigorous and successful opposition to the FSA’s efforts and the associated constraints this indicates big business lobbying places on the democratic process as practised in Britain with public health being sacrificed to private profits.

So now that another FSA is being “substantially reformed” will we see a more independent approach being taken by government to the issue of food content labelling? It’d be good if we did and it’s a nice litmus test as to the benefits of the quango cull that’s in keeping with Francis Maude’s claims. In the meantime the soon to be defunct Government Hospitality Advisory Committee on the purchase of Wines sounds like the best quango to be a part of ever, I can even think of a fabulous person who should have a seat on its board.

Tit and Tory boy pt.II

2010-10-05T12:42:00.000-07:00

When your boss has to go and defend what you’ve done you know you’ve fucked up big time, so it’s fun hearing and watching David Cameron trying to smooth things over by wanking on about the need for tough and difficult and tough and fair and difficult and tough decisions. But, WOW what a fuck up the child benefit thingy is.

Aside from the tough/difficult rhetoric, the main response I’ve heard concerned an appeal to practical snobbery – basing it on household rather than individual incomes would involve a horrendous bureaucratic process (true) and also involve means testing. Now its fun to hear a politician say "means testing" in this age of the “targeted” benefit, but isn’t that kinda what the family and working tax credit processes already involve?

I’d have thought an easier approach, a pragmatic one even would have been to automatically exclude all those on £44k+, but allow them to submit a claim if their total household income was below a certain level; that way the rank unfairness of the current proposals wherein households with an income in excess of £80k can get a benefit households with a £44k income can’t would be addressed. Plus, as benefits not paid to auld yins prove, there will always be penty of people who don't claim.

But, WOW what a political fuck-up all the same given the Tory fascination with the nuclear family and notions of mums staying at home to raise the kids, but getting the shafteroo cos hubby is a middle manager in a PLC. And WOW 2x given the Tory desire to appeal to the aspirational i.e. those who don’t earn £44k but aspire to and can see themselves doing so. And WOW 3x given the stupid fucks forgot about the origins of child benefit, which is that it was to provide a universal income to mothers, i.e. one devoid of the stigma attached to nearly all other benefits and grounded as much in feminist as it was statist thinking.

The backtracking going on right now about transferable married people’s allowances (noises rather than commitments) is amazing also given cutting one benefit, but increasing an allowance would limit any net benefit in terms of deficit reduction. But, that’s a tad to sensible, rather the Beeb will simply fixate on any notion of backtracking followed by a wank off over personalities cos that’s how politics and the economy are reported on here.

Which is a pity given this deficit is a finite thing isn’t it, like the Tories are taking all these tough/difficult decisions to address a one off problem whereas presumably the child benefit cut will be a permanent measure? How that work?

Perhaps on the basis that it plays straight into the US Democrat rhetoric Labour are currently wrapping themselves in of the squeezed middling sort, providing a wonderfully practical example of how the current cabinet of toffs just doesn’t get it.

Tits and Tory Boy

2010-10-05T07:55:00.000-07:00

I could be a tit and quote myself from May this year so I will “it seems like middle income bods are gonnae get clobbered left, right and centre by various VAT,NI and income tax rises and freezes and also get excluded from as many benefits as possible e.g. no more from tax credits or nursery vouchers and say the end of unverisal child benefit and what not if household income is over 40 grand a year or something, the staggered introduction of all which will progressively knock thousands off people's disposable incomes and further ghetto-ise the benefit system”.

But, aside from my having crystal balls (it was bloody obvious), what's really, and I mean REALLY impressive is how dumb the child benefit proposals are. So that’s no child benefits for any family with at least one person earning over £44k? Seems fair enough I guess, except looking thru the following hypothetical households:

Single parent earns £44k, total household income, £44k = No benefit
Two parents: he earns £43k, she earns £43k, total household income £86k = Gets benefit
Two parents: he earns £44k, she earns £15k, total household income £59k = No benefit.

So it targets higher earners not higher income households, which doesn’t strike me as being especially fair (whether the legislation will be smart enough to pick up on same sex couples will be interesting also). And oh oh, I was a schmuck on the grounds I didn't think anyone was dumb enough to conflate individual earners with households.

Then there are the raw disincentives to work it creates. In this blessed age of flexible working a bog standard two income family debate is whether someone should cut their hours to spend more time with the kids. Whereas the economics of this originally took into account the earnings forgone vs child minding costs saved, now they will increasingly need to take into account the £1,752 p.a. in benefits foregone also.

To give a practical example if Mum A on £45k p.a. dropped to a four day week, her net salary after tax and national insurance would fall from £32,860 to £26,764, however, she would keep her child benefit and potentially save c.£1k p.a. on child care costs.

And yeah, yeah, pension contributions would also fall 20%, but so feckin what given pensions are going to be raped on a continuous basis for the next decade. I mean what’s 20% less of fuck all tomorrow compared to getting 20% of your working week back today? The other funny besides stuff like people losing out when they get a promotion and/or pay rise is the potential damage it’ll do to the tax take.

So whereas Mum A on £45k for a 5 day week coughs up £12,139 p.a. in tax and NI. Mum A working 4 days only pays £9,235 p.a. and keeps her £1,752 p.a. in benefit. So a measure intended to save £1,752 a head ends up costing £4,656, which kinda matters given it indicates only a significant minority of people need to follow Mum A’s lead for the fiscal benefits to be neutralised. Eligibility needs to be tapered or banded in some way. End of.

You could at this point be cynical and suggest that actually it’s all about reworking the relationship between the state and the citizen and weening more and more people off what had deliberately become a near-universal system. Except, that’s a pile of shite because means testing household rather than individual incomes would be both a fairer and more effective means of doing so. It also implies a greater degree of vision on the part of the government than they appear to possess. I originally thought poor Danny Alexander was wheeled round the TV studios a while back to ensure the LibDems got all the stick for Tory decisions. Rather than any Machiavellian shenanigans I’d now say the more likely explanation is George Osborne really is the fuckwit “flat tax”(??@*&?!?) Tory Boy shit stain he always came across as before the election, that and he probably wears purple buckets for a bra.