Monday, October 27, 2008

Political Deflection Makes My Blood Boil

He's beginning to make me angry now. Check out this interview with Gordon Brown.
" also told us, as Chancellor, you ended boom and bust..."
"What I said is we're not going to return to 15% interest rates like we had under the last world downturn."
No. I distinctly remember you saying multiple times we weren't returning to boom and bust. And I'm getting sick to death of his smugness as he's trying to score points off the Tories when thousands are losing their jobs and seeing their pensions flunk on the Stock Exchange. There's little more disturbing than world leaders that can't take responsibility for their actions.

What I'd like to see is every journalist take a transcript or video recording of one of the numerous times he has spoken about ending boom and bust and go Paxman on him, refusing to go on with the interview until he has answered the question. That'll put an end to his propaganda as he launches into answering his own question.

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Tuesday, October 21, 2008

Silly George - Keep Your Distance Next Time

George Osborne MP has evidently been playing games and has now been cast out of his club for it. The fact that he keeps the same company as corruption media magnet Mandelson only adds to his worries. Rather than trying to score points there he should be distancing himself greatly from anyone occupying the centre of that particular Venn diagram.

And all this when donations to the Conservative Party are barely needed. £50,000 is not a sum to get in trouble over. £5 million, maybe. They are rolling in it while Labour harbours a debt. Quite frankly, I shudder in fear of the idea of the Party in power being in debt: that can only encourage shady shenanigans. So there is no need to draw attention to the issue which is killing off trust, what little remains of it, in British politics.

Front benchers need to steer well clear of such discussions. Close the conversation before it starts, leave the room, it doesn't matter how it ends but it must end sharpish. If the discussion comes up, best thing to do is hush their lips, hand over the party fundraiser's business card and say how delightful the wine is to change topic.

What this episode teaches us is that Osborne has poor judgement when it comes to his rich chums. Its not particularly fun to think of when it comes to the mixing of our politicians and the obscenely rich but they need each other so it should be expected. He needs to address that quickly if he ever hopes to become Chancellor of the Exchequer.

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Keyboard Security

Sensor technology will undoubtedly expand widely in the 21st century. It turns out the electromagnetic radiation produced by keyboards is trackable by radio antenna.

20 meters is still a bit close but I guess I better keep an eye on my neighbours two doors down. Expect some kind of dissipater as a keyboard feature in the future.

/remove tongue from cheek

Source: BBC

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Wednesday, October 15, 2008

Bonus Bashing - Don't be so Quick

If I had a fiver for every time Lord Digby Jones has said "don't beat the bankers" I'd be able to buy Iceland. Well, they are hardly short of a penny even if they are out of work now and if they didn't save well enough then evidently they couldn't have been particularly good bankers and so were bound for the chop by one means or another anyway.

Not the point I'm interested in, however. The more interesting part is the speed of which the outrageous bonuses have been jumped and criticised. So long as we remember that there is nothing wrong with bonuses. It is a quintessential element of performance related pay which, of course, is the right way to pay people.

Now before you think "no it isn't" the scenario is simple. You and your co-worker perform exactly the same work. You quite simply, in every measure plausible, are twice as good. Are you paid twice as much as you co-worker? Not bloody likely. Is it fair? No not really. Hence peach encouraging performance related pay is the finer method than lemon demoralising straight salaries.

The problems are the bonuses, it is the criteria on which they are based. The higher you see figures in business the more you see it is all about next months revenue or, if you're lucky, next quarter. It's not surprising in the slightest that the bonus schemes in place have resulted in the turmoil we now face. When the rules are clearly wrong the fault lies with the rule makers not the players.

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Tuesday, October 14, 2008

Sticky Plaster Economics

Sometimes I think government forgets what it is there for: externalities. Any two people can go about and conduct their business with each other. If it only effects them, fine and dandy, if not the government of the day needs to have it's ear out.

No good comes from 125% mortgages. Anyone who needs that much evidently can't save, not even enough for the legal fees. Fine, you say, the lender wants to give out a load of unsecured cash and the customer wishes to take it, good for them. Well, no. Multiply that several times over and you have a contributing factor to the grand mess we are in now.

Without reining in crazy practices like that when the government is recapitalising the banks they are just asking for trouble repeated. Leaving it be is bordering on the criminally negligent.

Speaking of irresponsibility; the government wants mortgage lending to return to 2007 levels. Why?
1. This is at the height of the overpriced housing market where stupid lending practices were at their most preposterous
2. There is absolutely no need for it. It is nothing as a measure

If it turned out that for a single year absolutely no-one wanted to move home, that's not necessarily a bad thing to be discouraged. The people who earn their living off the back of people moving around will have to find something better to do, sure, but there is no inherent need to encourage house moving and it certainly shouldn't form part of any government target. Other countries get on perfectly fine without it.

While we're at it, this Lloyds/HBOS deal still seems to be on the cards. Again, why?
1. Neither company has money to lend out to its potential customers so how one proposes to buy the other out I don't know
2. Why are no banks allowed by the government to fail? They are too big to fail. So the answer to that is to break the competition laws to allow a monolithic merger? Don't be ridiculous.

The problem stems from the fact that the industry is too large and too integral to the economy to be allowed to obey the standard rules of market. But nationalisation is also way off in the distance. This middle ground approach that is being taken can only be seen as a fudge because there is no vision or desire of it being the permanent state of affairs.

Guess what, if it not meant to be permanent then it is ultimately wrong. Fine for quick fudge but attention needs to be quickly turned to working out the correct way to run our banks.

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More nonsense than you can shake a stick at

Picture what we apparently should be doing now compared to say, a month ago:
Feeling sorry for bankers
Feeling sorry for estate agents
Congratulating Gordon Brown

I think that successfully categorises why the world has gone nuts this week.

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Monday, October 06, 2008

I Know it is Unfashionable to Say, But Credit is a Good Thing

There's a good reason we're not all speaking French now and that's all down to credit. Pilfering the renowned Dutch system of credit the English went on to outproduce the French (with more than double the population and economy) in ship building and consequently rule the waves.

Credit is all about using money to make money or at least it used to be. When it worked. Now credit is being used to pay for all sorts of needless (and often disposable) material items in the consumer crazed world we now live in.

And that's where we've been getting it wrong. Continual prosperity comes from both parties making something out of the loaned resource. When once side is only getting a quick fix and not adding any value to themselves or others then it is only a matter of time before it all catches up to them.

So the moral of the story is we need this rough spell to catch up. Both borrowers and lenders have been playing a silly game which could only have played out this way the past decade or so. A year or two of sorting out exactly who owns what and how much it is really worth is in order. After that we can get onto using the credit system for what it is good for, capitalism, and not this nonsense consumerism that's been poisoning our soul and planet for long enough.

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Dodgy Ground for the Pope

Never being one to duck out of a bout with the fantastic contradictions that are organised religions... As soon as the Pope evens thinks about criticising the pursuit of wealth he really needs to keep his mouth shut.

If he lived a subsistent existence up in the mountains then fine, you can bad mouth the pursuit of making money. But when you live in the Vatican, sitting on enough money to solve an awful lot of the worlds problems (especially in the catholic African countries), you're really not in a position to judge and be taken seriously.

Not that he isn't right. I envy those with faith much more than those with ambition. Just a tad hypercritical is all.

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Sunday, October 05, 2008

If Only it Were as Simple as a Reshuffle

You would think that the Prime Minister is given a lot of power. It's true, that person does. However what often gets overlooked is the ability to perform a reshuffle of their human resources otherwise known as Members of Parliament and Lords.

Imagine that in business terms. You have a large pool of talent and of your own accord you can move your pieces into place. It's the opposite end of what happens in business where the tendency is to work on a more tactical basis. Single positions opening up and with that position filled by someone going I like the sound of that job description. (And how often does a job description match what you actually end up doing?)

Perhaps I should talk to more HR people about strategical placements...

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Switching to Irish Banks

Depending on who's quoting the figure you'll hear either that 96% or 97% of UK account holders are protected by the government's deposit guarantee. There's absolutely no reason for them to move.

Anyone with more money than that is either proper wealthy with most of their money already in Switzerland or the Cayman Islands, mid-transfer on the property market where either the money is going to be out the way so quick it is not worth worrying about or it'll be split over multiple accounts, or pensioners who managed to save who will likely be passing on their inheritance rather early.

Not that people switch banks anyway as we all know. So no, people aren't notably flocking to Ireland and it's not a surprise.

Although UK banks are probably right to fear the move of business accounts that way. A euro nominated account has been looking better and better as the year goes on provided the exchange charges aren't too harsh.

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