Biscuits

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

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

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

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

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

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

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

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.