Wednesday, 19 December 2012

Peter Oborne explains the Tory party politics

Peter Oborne turns his fire on the dim witted cannon fodder that sit behind Dave in the Commons.  It is quite inexplicable to me (life long Tory) how we have ended up with such a dull and (let's be honest) unpleasant bunch of Tory MPs. 

It's probably true that Dave has always perceived this strata of his party as the real opposition, he is bored by RedEd and Eeeeeeeed and seems more interested in goading the make-weights on the right of his party. In this respect Dave reminds me of my father who used to describe himself as a Pink Tory (wouldn't work today) - quite posh, liberal and in the centre.  He hated puffed up right wing up ideologues.

So the campiagn is on and Gay marriage is the first engagement - it will be interesting to see who wins through - I'm not backing the plebs!

Tuesday, 18 December 2012

Bon mot

The old stager Tony Blair addressing the lobby journalists at the House of Commons today has a great quip on UKIP,

 “Never far from being nasty and never close to being sensible.”  as reported in

Working harder making less

One of the great mysteries of this recession is the missing jump in productivity.  Normally, after  economies have been in recession a while there is a improvement in productivity, less people producing more per head.  In this recession in the UK and other European economies there has been no uplift in productivity.  It feels like we are all working harder for less money but the figures compared to prior downturns don't bear this out. 

These charts are taken from the OBRs quarterly update

So why might this be.  Well no one really knows, it could be poor data, almost certainly to blame in part.  More likely it is the fact that higher paid jobs in financial services and in the Public Sector  (yes many Public officials have been over paid for years) have been replaced by lower paid or part time working.  Is this a bad thing probably not!  The chart below shows how the economy is re-balancing away from the public to private sectors.  This is an unusual feature of this recession normally the Government would pick up the slack and create (false) jobs to bolster the economy this time we have seen the opposite.

Another feature might be that our most productive industries have been hit hardest - financial services specifically and this is probably hurting us disproportionately.

Monday, 17 December 2012

Dave's mid term manifesto

David Cameron (Lazy Davey) needs to make some response to the nonsense being spouted by his co-coalitioner Nick Clegg.  Whilst Clegg is claiming the political no-mans-land of the middle ground Cameron has a chance to further show that the Libdems are the  handbrake on the process of clearing-up the mess left by Labour and modernising our institutions. 

The problem is that Lazy Davey has long since taken his foot off the accelerator of change, having got off to a good start in 2010 it's been a woeful tale of tactical tinkering ever since.  If he can summon the vision and leadership ability he could get into a good position - the key policies of Welfare, EU and Immigration could well all land well for him and the general economy is now on the turn.  To win an outright victory he need to do more, specifically he must:

1. See through the successful execution of the policies around deficit reduction, welfare reform and immigration reduction

2. Square the Tory right on Europe - there must be a deal that leverages Angela Merkel's requirement to reduce budgets with our need to simplify and popularise our membership of the EU

3. We need a couple of flagship measures that give Davey the reforming platform that would get him a second chance (without the Libdem handbrake) at Government (and keep the Right happy).

The options might be:
     a)  Tax simplification - George Osborne needs to be bold - simple taxes will drive collections
     b)  An investment / R&D strategy that targets harnesses the strengths we have in our  private equity industry
     c)  Give business an excuse to unlock the cash that private business are sitting on, to generate new high quality jobs in the UK

The question is - how fussed is Cameron about the second term?   I think he is too interested in keeping his hair rather than risking pre-mature aging through an overdose of power.

Bring back the Keynes

 Very interesting Opinion piece in the FT on the serch for new solution to our economic woes.

The jist is that Keynes, having been on the scrap heap for 20 years or more, is now being dusted of across the pond by byLawrence Summers, the former Treasury secretary, Paul Krugman, the economist-columnist, and the US Federal Reserve chairman Ben Bernanke, came with the belief that short-term fiscal and monetary expansion was needed to offset the collapse of the housing market.

The issue is that caused of the recession were the very high levels of personal and public debt, which became apparent during the credit crunch; caused by under-capitalized banks. To resolve this people, governments and banks have to become credit worthy, stimulating demand artificially is likely to cause deeper long term problems, so it doesn't seem probable that Keynes will have the answer. The one area if wriggle room is in the private sector, where large corporates are sitting on cash, unlocking these liquid assets may provide part of the answer.

So no need to bring back the Keynes. 

Middle earth

Nick Clegg’s speech today seeking out some middle ground from the wreckage of the latest set of opinion polls is poor strategic thinking.  To stand any chance of re-election both the Tories and the Libdems will need to show that the pain has been worth it (the pain is unavoidable).  To achieve this by 2015 they need to approach the next two years with same reforming zeal as they showed in the first 6 months of the coalition, if the libdems think they can bounce back in the polls by endlessly watering down promising (unpopular) Tory policies they are backing the wrong horse. 

Eeking out a position in middle earth on welfare, EU and immigration may not please the public who are opposed to the status quo on all these issues. My bet is that this message of controlling the excesses of the Tory party may not play well in 2015.  Much better to be an important member of a reforming coalition who have turn the tide on labour's poor thinking and muddled execution.

'Angie - beautiful and sweet'

I think I'm in love. She may not be a sex bomb but she lights my fuse!

Angela Merkel makes the important point on the cost of welfare (Reported by FT) that Europe represents

7% of the world’s population

25% of the world’s GDP

And 50% of the world social spending

Reconciling the last two numbers is where the pain is.

For Ed Miliband and others on the left these are uncomfortable numbers and its annoying the Lazy Davey can't communicate these simple truths as eloquently as our Angie!

Sunday, 16 December 2012

It's a Gas, Gas, Gas

It  amuses me that England may be about to enjoy a fracking gas boom just when the Scots are about to vote for independence.  Sadly Scotland is 90% granite - not much shale around north of the border!  Having moaned that we have squandered their oil inheritance they will be pretty peeved if we end up having an energy boom of our own just after they ditch the grand alliance!

Up dated on 11th jan 2013

We now find that the Shetland Islander don't want to play ball either - Alex Salmond could be running short of energy very soon

The Up Helly A festival in the Shetland Islands to show off their Scandinavian heritage
The Up Helly Aa festival in the Shetland Islands shows off their Scandinavian heritage

Clear-out needed

In an article on Maria Miller in the Guardian today

A senior Tory backbencher was reported to have said of the culture secretary Mrs Miller: "No one's out to get her in Parliament. She hasn't antagonised anyone. She's a dull, over-promoted housewife who really isn't cabinet material, but who you know is pretty inoffensive. This absence of enemies will save her. Plus, she's a woman."

Whether the backbencher did say this or not - no-one is surprised.  I think this is why Dave sees his role as a reformer as being unfinished business.  As a toff Dave would prefer to clear out this kind of small minded ignorance from the Party rather than be re-elected,  his strategy around Gay marriage reflects this approach as does his ambivalence to UKIP.  Good on him!  Maybe the Tory Party still needs to get smaller before it can win a majority at a General Election - if you know what I mean!

Saturday, 15 December 2012

No need for guns

I have served in the army, I have spent memorable days shooting pheasants with friends and sad to say I absolutely know that guns are a universal evil.

However conscious of the need for safety and careful the gunman is, the overriding feeling a gunman gets from holding a weapon is one of power.  My plus-four garbed friends won’t admit this, but it’s true.  How could the act of holding a killing machine affect one differently? 

We need to respond to the problem globally whether its a lone Fascist in Norway, Drug runners in Mexico, Moose hunters in Alberta, a lunatic in Newport or Pheasant shooters on Exmoor - I think the answer is straight forward GUNS RESULT IN DEATH - and the correlation is clear.

Friday, 14 December 2012

Magic Mushrooms

My thanks to the Economist again for an illuminating article - this time on drugs.  Not surprisingly alcohol comes out on top as the most damaging to all parties.

 It is the most harmful to others by a wide margin, and is ranked fourth behind heroin, crack, and methamphetamine for harm to the individual.

The serious and considerate abuser should consider magic mushrooms as they have little or no impact on others - sadly the problem is that the don't have much of an hallucinogenic effect

Euro budget on hold

Eurozone could agree Banking supervision but not the financial integration to secure the Euro

The initial thinking behind the Eurozone budget is that it would small scale 10 - 15 bn Euros and interestingly it could be funded by the financial transaction tax, which where we come in.  Although  the  UK is not in  Eurozone most of the revenues raised by this tax will be raised in the UK!


Some cheek,  RedEd Miliband is to address us today on the need to better integrate ethnic minorities into our society.  Let us not forget that he and the last Labour government are directly responsible for letting the floodgates of immigration open without a second thought for the challenges this would create for all sides.  State sponsored multiculturalism with no plan has resulted in the kind of intolerance and small mindedness offered by BNP and UKIP.  How dare he lecture us on this of all topics!

And the reality of the speech was that there was;
1. No apology
2. No ideas on how to improve things
3. No support for any control of new immigrants
4. Contempt for those living with the consequences
5.  Patronising guff about his roots

He is being opportunistic again hoping to drive a wedge between the Tory right and the government - this is childish behaviour and dull leadership.

Thursday, 13 December 2012

Social media car crash

This week I made a presentation to about 25 bankers.  In the middle of the meeting my Skype alarm call went off - it was my daughter calling from school.  When I refuse her invitation to chat (because I have a roomful of important people) she told me that I'm was 'a boring LOOOOOOOOOSER'!  Guess she is right, better IT skills would have allowed me to kill off Skype without the public embarrassment of the whole room seeing her note to me!!

Secret Santa

My very selfish list (of course I want to put an end to world hunger but …………..)

1.       Tennis lessons – I am in desperate need of  serviceable backhand

2.       A cure for Tinnitus – its driven me mad since it started in August

3.       Some self-esteem – I’ve had a poor year at work and it knocks the confidence

4.       The loss of about 12lbs without having to give up booze in the New Year

5.       The love of my wife and family for another year

Wednesday, 12 December 2012

Hungry like a wolf

A spot of deja vu -  Riots in Belfast, Teachers revolting, Michael Foot (RedEd) stalking the corridors of power and a crisis over Europe - we could be in the early Eighties!  God save us from Duran Duran.

Uptick or the worst of the downtick over

Our flexible economy is working to help us combat the downturn in the public sector ‘economy’.  But interestingly the up-tick is now growing due to permanent jobs not part time roles.  This could be a further sign that things aren’t getting worse!

Monday, 10 December 2012

Gambling on Gavyn

I blogged a couple of days ago on an article by Gavyn Davies in the FT; that in a round about way was suggesting that it's likely that we are at a turning point in the global economy.

While I was trying to understand his article I remebered me what my Grandfather used to say - 'Stock markets will run 20 months in front of the real ecomnomy'.  So on this basis the recovery in the UK will be pretty anaemic.

Sunday, 9 December 2012

Calling the end of the recession

Who should we rely on to call the end of the recession, no me for sure but Gavyn Davies (Ex GS partner).  The graphs he uses in his blog show that the downward revisions in forecast and the expected outcomes for 2013 mean we could be at the tipping point for returning to growth.

As he says -

In order to achieve the calendar year averages shown in the graphs, the annualised growth rate in global GDP would need to bottom at about 2.4 per cent in the current quarter, and then gradually rise to 3.5 per cent by 2013 Q4. In other words, the global economy would now be at a critical turning point.

What this means in English is that we are nearing the end of the global recession and we should not be overly neg about the up-swing - its happened before!

Saturday, 8 December 2012

5 giants

An article in the FT by Janan Ganesh is a good reminder of how out of date Beveridge has become.

At the end of the war the 5 giants that we needed to slay were: want, disease, squalor, ignorance and idleness.  It seems to me that it would be worthwhile to up date these.

So what should be on the list now for us in the west.  I would only keep two from the original list and my five giants would be: Debt, Greed, Intolerance, Ignorance and Idleness.

I blogged on Beveridge before -

Wednesday, 5 December 2012

Her Majesty's Opposition - The BBC

Making a mash of the numbers.  Stephanie Flanders is fast becoming the only serious opposition the government have in economic policy, Ed Balls is a spent force and RedEd has nothing new to say.

Her main tactic is to cloud the issues with convenient statistics - (just to remind everyone her job is to clarify the situation for the licence paying public not just make things look as bad a s possible).

She keeps the focus on the deficit as a % of GDP and whilst the UK is borrowing less than in 2010-11 Steph tells us, austerity so far has still only reduced the deficit by 0.5% of GDP to  4.3% of GDP.  The important number is the £59bn reduction in spending and the fact that the annual deficit has been cut by a quarter.

I would have thought its obvious that if you cut govt expenditure you have to grow the private sector by the same amount to stand still (Govt spending is 50%+ OF OUR ECONOMY) - so in a low growth economy where there is no inflation the % of GDP deficit reduction is going to be very small. 

The government were silly to think that they could grow at 2% whilst cutting gov spending at 3% annually - and Steph is making them pay. 

Her slot on the News at 10 tonight was a low point in biased reporting!

Ourbucks, you're having a latte

According to the Reuters investigation, Starbucks generated £398m in UK sales last year but paid no corporation tax and it found Starbucks had made over £3bn in UK sales since 1998 but had paid less than 1% in corporation tax!  At 20% profit (not unreasonable) they have avoided over £100m in tax.  

Starbucks claim in the FT that they haven’t been as profitable as they would like is obviously a joke. If  it turns out that they have been subsidising the UK business with profits from abroad or dumping prises to grow market share that is anti-competitive activity, where the penalties will be worse that a little back tax 

Tuesday, 4 December 2012

If GDP = C + I + G + (X-M)

The Government and media commentators are obsessed with our GDP growth.  When the Government’s spending is in balance GDP may be a relevant measure but when we are running a huge deficit and need to cut government expenditure it’s not so helpful.  We should obviously be interested in growth associated with (Consumption goods & services (C) + Investments (I)  (Exports (X)  Imports (M)) but when 50% of the economy is Government Spending (G) we should not expect to grow GDP whilst hacking back G

Boris get outer tier

Boris is still stoking it up over Europe, which looks like a blatant attempt to de-stabilise Dave at a pretty critical time.  Boris is proposing a two tier approach which looks good if your selling but not great from a buyers perspective.  To propose that we leave the EU 'inner tier' is just saying its all to difficult to solve complex problem of our future relationship with Europe.  To put us in the same boat as Switzerland and Norway is crass - we are the second biggest economy in Europe not Albania!

Sunday, 2 December 2012

Recession what Recession!

Today's article in the Telewag today gives us a glimpse of the mess the Tories have been making their in communication of economic policy.

By focusing on GDP (overall growth) the Tory party is under selling the strong performance of the private sector, This hidden good news story need airtime.  If we want to shrink the public sector (over half the economy) we are not going to get GDP growth, but to present this as bad news is self defeating. The government should start to focus on the positives and specifically the growth we are seeing in the private sector.

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