Friday, 27 February 2009


I don't have much sympathy for Fred Goodwin. He ran a Bank into the ground and gave the taxpayers a £325bn liability for around 20 years. That takes some doing. But I don't blame him for this pension fiasco.

You don't expect a guy of that kind of gambling instinct to take such risks without making sure he did not personally be set up for the future. He was in charge of all the necessary things to make that happen, surrounded by the right kind of compliant Board and, best of all, he had a desperate Government being advised by the kind of people Goodwin was - Bankers.

Is Goodwin To Blame For His Pension?

Goodwin thinks himself unlucky - massive financial turbulence caused his Company's downfall in his mind. That was not specifically true. RBS could have survived a recession and in conjunction it could have survived a large decline in the housing market - these things could not have impacted his business no more than the usual attrition.

What killed his business was RBS' sole reliance on one single point of potential catastrophic failure - lack of credit.

His whole business model was leveraged on the availability of cheap and easily accessible money to balance his books. His argument is that everyone else did the same which, to a great extent, is true.

That does not mean Fred Goodwin was right, it just made all bank executives idiots.

But Fred Goodwin was a pragmatist also. When the whole thing blew up in his face, he had a rock solid contract which defined around 15 months of pay off plus a pension top up. That is, if certain conditions were met. Should Fred Goodwin have been summarily dismissed for his incompetence, then we may not have got into this situation. However, he was offered the face-saving option of 'early retirement' and that's were the problems lie.

Due Diligence

At the time, last October, Alistair Darling had hailed Fred Goodwin for 'doing the right thing' in waiving his right to the 15 month pay off which of course saved the Government's face in front of taxpayers - Darling and Brown were seen as steely men who confronted Bank largesse and solved the problems. At the time, Brown was being widely regarded as a 'Superman' and his reputation had risen, Phoenix-like, from the ashes of economic disaster.

But Goodwin had indeed waived his pay-off rights but in return had made sure his pension pot top-up of £8m and the right to draw a £653,000 per annum pension immediately was kept in place. It was there for all to see. Now Darling and the City Minister, Lord Myners, are trying to say they knew nothing of this.

To my mind, this is standard contract stuff, just like Peter Mandelson getting 3 years of his EC Commissioner's salary as a pay off despite being employed as Business Secretary - which we pay for.

In his letter to the Treasury, Fred Goodwin makes clear he agreed to a 'series of gestures' in order to keep this little nugget. And frankly, Goodwin was never stupid and he certainly was not contrite. For all the disaster that had beset his Company, he believed he was just a victim of the market. In his mind, he had taken a lowly, provincial Scottish Bank and grown it to become one of the top 5 banks in the world - in his world, he was a hero.

Incompetence and Negligence

The whole series of bank bails outs have a parallel with the Bank failed business model because they were designed, in haste, to support the model. The theory was, by making available a fractional amount of the 'toxic debt' then banks would have enough access to capital to shore up the books and survive, even thrive. It was a disastrous misread of a highly complicated situation. Nothing as simple as just throwing big numbers at it was going to get this solved and, in my opinion, many banks needed to be weeded out rather than supported to get this put right.

If nothing else, there was a whole mindset in the City to unpick, and that's where sneaky bits of embarrassment started to arise.

It started as banks carried on paying bonuses, using taxpayers money to carry on as if nothing had happened, arguing, 'You have to pay bonuses to get good people' which does not go down well when the taxpayer is forking out around £1.3 trillion in liabilities, loans and guarantees. They seemed small to the City as if they were being contrite, but the whole ethos had not changed.

The Government, in its blind panic and swirling in a pool of bad advice, just blundered on as if everyone knew what was on their minds. Of course, they did not want Goodwin to have his massive pay off entitlement - it was bad PR - so agreeing a simple pension right was a good alternative.

The devil is the detail - Goodwin was not going to survive on the Minimum Wage, although to him, £653,000 a year is peanuts.

The fact of the matter is this. Darling, Myners and Brown are guilty of completely misreading the situation. While throwing our money around as if there was an unlimited supply, they did not attempt at any time to curtail the City with strings attached to it, certainly none thought through. So, once again, the taxpayer sits aghast that such negligence and incompetence as could be seen to have caused all this massive financial loss and disaster in the financial system could be repeated by the Government in the bail outs.

I have said it before, it is time we withheld our tax money and make this Government account for every penny before they go throwing it around. They have put us all into a position of having to sustain long term debt and every penny they add to it by incompetence, is another we will all have to find many times over in the future. I say, enough is enough.

Thursday, 26 February 2009

Enough To Make You Choke

About the only thing more disgusting than Fred Goodwin being able to draw a £650,000 per annum pension for life from the age of 50 is the knowledge that it could have been prevented.

Alistair Darling has admitted that once again the Government did not do anything to prevent it although they could have. Now they have the embarrassing job of once again trying to lock the gate after the horse has bolted by trying, via legal means, to prevent Goodwin having it.

The Deal

Goodwin lied to the Treasury Committee when he said he had the same pension as all other employs of RBS, a Defined Benefits Scheme. If you want to be pedantic, he got defined benefits alright but only those allowed by topping his pension pot up to the tune of £8m when he was sacked. No wonder he waived any rights to a pay off - he was laughing for life. If such a scheme were granted to all employees of RBS then the business would no longer be viable.

Gross Negligence

Under the RBS scheme, and by virtue of him being sacked, RBS and the Government had every right to prevent him drawing this absurd pension and particularly when he was only 50.

It once again beggars belief that we allow this Government time and again to get away with such negligence and incompetence under the guise of bank bail outs and rescue plans.

It all comes back to the advice they are getting. The Directors of RBS weren't going to stop Goodwin getting his money - after all he had given them their nice, well apportioned positions and they enjoyed the ride. It was as much as they could do to make sure that taxpayer money looks after their favoured son in his 'retirement'.

The real culprits here are Ministers who are constantly advised by the very people who condoned what Goodwin did - Investment Bankers. At every move, the Government is found to be lacking in thinking through the plans, properly accounting for money and blindly guessing their way forward hoping it vaguely takes them nearer some sort of economic salvation.

It's a strange day when George Osbourne gets one over on you but Darling's excuse on lack of due diligence and the Government's obsession with getting through the bail out and ousting Goodwin in a simultaneous blow was indicative of the whole credit crunch fiasco - no one cared to study the detail. Lord Myners certainly did not - he was one of the boys from the City.

It's time they paid attention to how they spend that money because I think it is high time we start, as taxpayers, withholding it until we are convinced that it will be spent on the right things, for the right reasons.

Enough, surely, is enough.

First Dog To Be Inaugurated

Portuguese Water Dog, thought to be named Moose, is set to be sworn in as First Dog later this week. He has already pledged he will get rid of cats and introduce compulsory butt-sniffing for identification purposes.

President 'Moose' Obama, is to be rescued from political oblivion after intervention by Senator Ted Kennedy who has given his personal recommendation for the candidate that apparently swayed the voting in the Obama family.

'They are political animals,' said Sen. Kennedy. 'I have two of them and they have kept me and my family out of controversy for many years, helped on my decision making particularly while driving and they are defence experts. Besides they are better than the bald rats proposed by the guy in Peru.'

Longest Election Campaign In History

The election victory comes at the end of a long campaign which started at the vote winning speech by Barack Obama in Chicago when he pledged that his daughters would have a dog. It was the first Presidential order he signed with ditching Guantanamo Bay coming a distant second.

'Every President needs a dog,' said President Obama. 'Look what it did for George W Bush - he even made Christmas addresses to the people with his. I plan to make every policy decision in conjunction with the First Dog, just after he has his daily constitutional. His paw will be on the Red Button should the time comes - rest assured, my fellow Americans, if it comes to oblivion, I'd rather a dog choose it than me.'

Portuguese Water Dogs are known for their energy and intelligence and have a thick, tight, curly black coat that almost shields their eyes from view which makes them ideal helicopter pilots. They also have the benefit of being one of the few breeds of dogs which are hypoallergenic, which was critical in the choice by the electorate.

Sen. Kennedy's Water Dog, Splash, even featured as narrator in a children's guide to US politics called 'My Senator and Me: A dog's eye view of Washington DC' which was ground-breaking if unintelligible and focused mainly on the lampposts suitable for urinating on.

'I am proud to endorse the Portuguese water Dog as the First Dog of The United States of America,' said Sen. Kennedy back in January. 'They have a can-do and hopeful spirit. They are smart. They are resilient. They are determined. They are optimistic. And they are tireless. Sounds like the perfect fit for the Obama family and his Administration.'

President 'Moose' Obama is expected to have his own office in the White House and not be in the Oval Office as a continuous wall may confuse his urinating habits.

The Dawn Of A New Era

RBS finally gave us the full force of the bad news this morning. It was nothing less than what we expected, to be fair, as they clocked up UK Corporate record losses of £24.1bn for 2008.

It means the bank will be radically reformed and the first thing that will happen is that around £325bn will be sidelined as bad debt and insured under the Government's Asset Protection Scheme which will allow it get back to lending to firms and individuals.

Chairman Philip Hampton blamed the loss of 'massive turbulence' in the financial market - absolutely nothing to do with the massive over-extension of the company through raising borrowing under Fred Goodwin.


One of the most obvious effects of this massive loss, aside from the minor detail of largescale unemployment, is that sport will be hit big time. RBS had embarked on an unprecedented spending spree to sponsor sport and sports people making several famous individuals highly paid ambassadors to sport for RBS - some appointed just weeks before RBS' demise. These include Sachin Tendulkar, Jack Nicklaus, Jackie Stewart and Zara Phillips. Many other sports will be deeply affected by the loss of RBS money and F1's Williams Team will need a new sponsor soon as will Andy Murray to name a couple while the deal with the RBS Six Nations was recently extended. However most deals have a longevity to them so they are no way immediate cuts.

Some Things Remain The Same

But warm your heart as some things about RBS remain the same. Thankfully the £650,000 annual pension granted to ex-CEO Fred Goodwin remains in place and he can draw it merrily. He is just 50 years old and he has a pension pot worth £16m .

Sir Fred was the man at the helm when the proverbial hit the fan and he was the man who out-white-knuckle rode the competition to buy ABN AMRO Bank who were widely seen as the most vulnerable to the credit crunch, handily placing them in the taxpayers' check out trolley when the music stopped on the merrygoround. RBS is now 70% owned by a group of notsowell-heeled mugs called The Taxpayers.

Treasury Minister Stephen Timms has realised that this pension payment is slightly embarrassing when read in conjunction with record losses and so he has has UK Financial Investments Ltd, the company set up to manage our portfolio of dead donkey companies we now own, to try and claw back some of the payment.

We all know Gordon Brown was 'angry' about bonus payments being made after the Government bail outs as if he was totally unaware that banks pay them when he negotiated the clever deals to save them. Now his Ministers seem dumbstruck by the intensity of the money-siphoning bank executives were guilty of and seem once again not to have anticipated such embarrassing details coming to light later. Why Timms cannot just instruct a lawyer to go and claw the money back is beyond me but once again the dark influence of the banking advisers at the side of the Government's decision making seem to be at work.

They seem to divert the PM's attention from the obvious and make him focus on the 'Big Picture' - how to make a small number of people very rich again at the expense of smaller individuals and companies.

So Fred Goodwin has the last laugh - after being fired he had set himself up for life, we find. All very convenient, it's as if he always had his insurance policy ready and that the Ministers who presided over the incompetent bail outs never suspected.

To my mind it proves that Goodwin and others knew far more about the possible outcomes than they make out.

The Obvious

There are two things that struck me about Fred Goodwin's disgusting pension situation. One is that he should be personally appealed upon at minimum to defer any pension until he is at genuine retirement age rather than just firing age. The second, who on earth granted such a show of appalling largesse?

Company Remuneration Committees are generally the odd company executive and then a bunch of relaxed, well-heeled Non-Executive Directors who are too fat, rich and have too many other such freebie engagements with other companies to either notice or care about what is going on. They are not going to rock the boat and stop executives paying themselves ludicrous bonuses or grant daft pension rights as they can easily be voted off at the next Board Meeting - so they just nod, take the free lunch and pick up the cheques.

Something has to change. The UK must break this stranglehold of members of the Non-Executive Club who have portfolios of watchdogs and FTSE 250 companies where they literally do nothing and get fat fees - making sure their pet executives who pay them get what they want.

Defined Benefits

Goodwin argued at the Treasury Committee that he had the same pension as everyone else at the bank - a defined benefits scheme. I suspect his worked slightly better than the other thousands of staff who will shortly lose their jobs due to his incompetence.

Wednesday, 25 February 2009

All That Education And Nothing To Show For It

To some of us, academic achievement did not always come easy. To some, whizzing by exams and getting firsts at some Oxbridge College ensured a lifetime of achievement. All they had to do was turn up.

For those who fit into that bracket at the FSA, that's about all they did do. Today, the Chairman of the FSA, Lord Adair Turner, was giving his interpretation of events leading up to the world's worst financial crisis since the Great Depression of the 1930s to the Treasury Committee.

The Light Touch

We have heard the contrition at these committees from the likes of Andy Hornby, former CEO of HBOS, who was very sorry indeed - more sorry than Fred Goodwin, ex of RBS and Eric Daniels, CEO of the new Lloyds Banking Group. After an estimated £1.3 trillion of liabilities hurled at the taxpayer, sorry doesn't seem to quite cut it. I think for many of us, exile in Guantanamo Bay would not be good enough for them - sadly President Obama has shut it down too hastily.

This time we had the turn of the vicious city watchdog, whose job it was to watch over 10 major banks and in that time only 5 of them went bust - it could have happened to anyone. Turner alluded to a 'Light Touch' that was 'politically preferred' and so the FSA complied. That part was easy, most Chairmen of watchdogs have several other jobs so it easy to get distracted. Not the same could be said for the highly paid Hector Sants, CEO of the FSA. His lucrative salary was plenty enough to turn a blind eye to the obvious.

Intelligence Lacking

Let's face it, most of us with half an ounce of intelligence knew that the housing market was massively overcooked. The relentless price rises, year after year were fuelled by a flawed business model in banks which allowed them to leverage each new debt to raise new money to fund the next debt and the next capital. It was an upward spiral that simply had to implode because at some point the connection between the debts and the value had to disconnect. This is where the genius Gordon Brown tries to blame sub-prime but that was just a manifestation of the fragility of the model - it could have just as well have happened anywhere. The funny thing was that because the UK did not have many sub-prime mortgages, it was reckoned we would not be vulnerable. The problem was that there were many points of weakness in the model, any one of which could have taken the one thing out of the equation upon which all other things depended - Trust that the assets were at their original value when the original loan bargain was struck. Britain always stood to lose the most if this was ever recognised as our house rise was way ahead of others.

Wallop! The moment the flawed model was exposed, everybody was caught up in the web of debt swapping, derivative flinging, exotic swallowing, option swilling daftness that was the model. Trust was lost and the one thing they all needed to survive was credit and it simply dried up as no one knew who held what debt.

The FSA couldn't see that because they did not have the time in their busy days, they operated their 'Light Touch' very lightly, they had not the intelligence to notice, they were well heeled enough not to care or they were part of the deception system that allowed the whole scam to survive and flourish (delete as necessary).

What Does A watchdog Do?

Some of Lord Turner's answers were so pathetic as to wonder why he was not summarily dismissed from his post for not at least taking the time to come up with more plausible excuses. His constant references to 'political assumptions' make you suspect that perhaps the Government were pulling his strings but you would think a successful businessman in the past would have more guts than to just sit at a desk and do nothing.

But it's what he and all the highly paid idiots there did.

It beggars belief that he and Sants still have jobs anywhere, frankly. They have presided over the unhinging of 50% of the British banking set up and allowed the taxpayer to become liable for all their lunacy. Not once did he or anyone else step in to ask questions over business models and methodology. Yet he thinks the way the FSA acted was 'competent'.

Lucky for us it wasn't 'incompetent' or else we would have really been in trouble.


Lord Turner consistently referred to political assumptions and lack of independence and I think there is no smoke without fire. It seems the Government tack was to tone down the role of the regulator and this probably is endemic in all the watchdogs. Each are manned by Chairmen who have at least 5 or more other Non-Executive roles, are paid lucrative salaries and and are hand picked for their abilities to do what they are told.

So what happened to the CEOs? Surely the same can't be said of the well paid Hector Sants? Well the sum of it came when he outlined what was the only consideration to be taken into of when a senior banker was put into a post - whether he had a criminal record or not. It reminded me so much of the Monty Python sketch of the guy being interviewed for the Secret Service - he was asked, 'Can you keep a secret? Well you're in.' It would be funny if it wasn't so real as this was in response to HBOS appointing an executive to be in charge of risk at the bank who had no previous experience of the field.

The saga continues tomorrow - I just wish I could make it all go away. The shower of total incompetence belies the intelligence of the people involved. Surely they had more sense of conviction to do the job properly no matter what the Government said? How can they be kept in these jobs for the future if they didn't care before?

For a fraction of the £900,000 a year Hector Sants earns anyone who read the papers and could add up could have done his job the proper way. But that of course would presuppose that they cared enough to take it seriously in the first place.

So What Was There To Hide?

The war in Afghanistan always seemed legitimate - the regime was a legal target, sanctioned by the UN, as they harboured terrorists. Iraq, however, was an entirely different kettle of fish. And as the country seems deeply divided over its legitimacy and the agenda afoot at the time, it comes as a frustrating yet entirely predictable 'surprise' that Jack Straw has vetoed the publication of minutes of Cabinet meetings leading up to the decision to go to war in 2003.

I don't know about you, but that makes me even more suspicious that the last reason that was on Tony Blair and his Cabinet's minds were Weapons of Mass Destruction.

Information And Government

We have fought long and hard to get more access to information but I do agree with Jack Straw's sentiments that there is always a balance to be had. There are some things which need to be kept out of the public's eye in case they jeopardise lives or the safety of our forces.

However, 6 years on and one Prime Minister down, there comes a time when people's minds need to be put at rest. What were the real reasons for the decision to support the USA and invade Iraq? At the time, the UN resolution governing it did not give a clear mandate - only if WMD were found could it have legitimised our actions. Hans Blix and his team of weapons inspectors pleaded with George Bush and Tony Blair for more time as he found nothing suspicious in Iraq. Lots of disinformation claimed Blix was being taken for a ride by his Iraqi hosts but we were later to learn that indeed there were no WMD or vast underground Chemical Warfare Laboratories let alone anything that could be turned against UK sovereign territory in just 45 minutes as the Intelligence Report published to the public confidently predicted.

It was subsequently found that the Intelligence Report which purportedly came via the desk of John Scarlett, the Joint Chief of Intelligence, was in fact a work of fiction with parts of it plagiarised from a thesis by a student which he had written some time before.

The hand and influence of Alistair Campbell was felt everywhere and there were even rumours that he had chaired meetings of the Intelligence forces as if he had Ministerial powers.

The David Kelly Affair

Then Andrew Gilligan got into hot water when he exposed the document of having being 'sexed up'. The source of this claim was apparently a Defence Adviser, Dr. David Kelly. All hell broke loose as it was tantamount to accusing Campbell himself of 'sexing up' the document in order to strengthen a weak case for going to war. In the events that followed, David Kelly tragically took his own life with his own blunt penknife, Gilligan and the BBC got slaughtered and Campbell burst in on Channel Four news and demanded to be put on prime time TV, got his way and damned everyone in his path. The whole affair had the edgy feel of an Orwellian novel and that the propaganda-ists were running the country. The subsequent Hutton Report into the Kelly Affair found that there was nothing unusual at all about the whole thing and that the Government were heroes.

Explanations Needed

I certainly am one of those people who feels owed an explanation by the Government. It is one thing supporting the USA but it is another blindly following and risking the lives of our troops in a cause that was questionable. The reasons subsequently alluded to was that Saddam Hussein was a bad man and therefore it was justifiable on those grounds alone.

That might ring true had it been the explanation given in the first place but, of course, that had no mandate at the UN.

The fact is no matter how much we or others may dislike say Gordon Brown that is no reason for anyone else to invade us. There are many political leaders and regimes around this world who are nasty to their people and other nations and we do not seem to do much against them except occasionally posture or impose some sanctions. Robert Mugabe springs to mind as a prime example of someone who is clearly off his trolley and a danger to his people and us, yet nothing is done. You could argue the rest of the African Nations may not like it but if you had polled many people in the Arabic Middle East, Saddam Hussein was a cult hero.

Saddam, by all estimates, was a spent force. Hemmed into his own country, he was more a danger to his people than us. And we had our opportunity to depose him in the first Gulf War but International Law was clear then on our mandate no matter how much a bad person we thought he was. So why the change?

Bush And His Legacy

I have said before that I think the Blair-Bush years are ones of missed opportunity. I think Bush in particular got blinded by vengeance in the first instance and then used the smokescreen of a wounded America to solve some old problems related to oil. It has been a gross miscalculation of a very complex situation. Two wars fought in two distant countries have opened up two fronts where anyone with a gripe against the West can hone their fighting skills and score a few points for their Cause, whatever that may be. Afghanistan is a country that has variously been invaded but never conquered and the reasons remain the same. Conveniently, Osama bin Ladin, remains at large, sneering at us from his retreats, communicating freely with his network of operatives, we are told, in a world where the security forces have direct access to all our communication methods and bank details and have satellites that can see the hair on the backs of our hands.

Iraq has been the bigger of the miscalculations in that it was easy getting in and overthrowing Saddam but then you have the rattlers nest of all the various factions who want their Iraq not one built by former disgraced telecoms companies, big contractors on the make and having McDonalds' franchises in every town. The depth of feeling in the Country was supposedly felt when Saddam's statue was pulled down, but as with 'Shock and Awe' it had nothing to do with conquering a proud people.

Where Does It Leave Us

It circles back to the point of the blog. Somewhere, someone knew something that made this all worthwhile, that gave Tony Blair the 'Pure Heart' in God's eyes as Cherie put in her memoirs to sanction the invasion. We have waited a long time to find out what awesome knowledge or terrible secret that has been such a burden to that Cabinet that surely they would want to get off their chests and share the burden of the big responsibility with the people who put them in power.

Or is it that the reasons were not there as given to us before and that there was a completely different agenda - one that would never have stood up in International Law? We may never know.

You Couldn't Make It Up

Former Home Secretary and now Justice Minister, Jack Straw, has been the victim of Internet scammers from Nigeria.

'Don't Worry It's Only My Constituency E-Mail Address'

The scam was excellent. Nigerian hackers bashed their way into Straw's Blackburn constituency email account and sent out a message to people on his address book like Party members, Council Chiefs and Ministerial people at The Justice Department, you know, the usuals on his joke distribution list. The message read that he was stuck in Nigeria and his wallet was stolen so he needed $3,000 to get home. Apparently a fair number of constituents and contacts received it and Mr. Straw only cottoned-on that he was the victim of a scam when he started to receive phone calls from worried constituents to see if he was actually in Nigeria.

It is a baseless lie that many called in to offer money to keep him there.

Mr. Straw was swift to point out that only his constituency email address had been hacked into. One theory is it happened when he logged onto some dodgy porn or gambling site, but we are sure that could not be the case. But Mr. Straw said that security was not at risk as his ministerial email account was fine and that there was nothing worth knowing on there as he didn't do much anyway, or some cynics would say. As for his constituents, they should not worry that they have been posting their private details of concerns or worries, possibly with revealing details about their homes or possibly even bills they have received unwarranted. Most likely all were safe as he deleted most off without reading them.


Jack Straw knows a thing or two about Hi Tech security. As Home Secretary, he established a National Hi-Tech Crime Unit precisely to stop such Internet scams - good to see all that hard work and money paid off.

Mr. Straw was quick to point out that 'The Internet is wonderful in many ways, but I think it was so obviously ridiculous that I could go off trekking in Africa and lose my wallet.' He no doubt went on to say that's about as ludicrous as thinking highly sensitive data on CDs and laptops could be lost as close at hand as the UK.

The best laugh is that only one person apparently replied to the mail but no money was offered.

When Governments And Commerce Collide

There is a good reason why Governments interfering in commerce is not a good idea and that's because they generally change the rules or allow it to happen. As we have seen in the past with the Railtrack fiasco, even if companies get into trouble, nationalisation should be a place of last resort.

What we are seeing in this financial crisis is a series of knee jerk reactions which typically end up favouring certain businesses and markets over others and the same can be said for individuals. While people with mortgages have had their woes eased, those saving for the long term have been hammered seeing not only their investments trashed heavily in the stock market dive but to add to their heartache their savings are not getting anything either.

Northern Rock

The same can be said of bondholders at Northern Rock. While it could be said the bank would have gone bust without Government intervention, people who funded it previously stand to lose out considerably as new proposals are forwarded by the Government-paid clever Consultants swarming all over the Rock.

Northern Rock has now revealed it is to create a 'Bad Bank' of its own to park its 'Toxic Debts' as a spin off so that it can start relending in the mortgage markets where there are lucrative rewards to be made in a new risk-clear legal entity. How very convenient.

Of course, in the real world of commerce such a thing could not happen and certainly not without some recourse in law. However, creditors who hold the bonds fear they will get dumped into the 'Bad Bank' and the Northern Rock bond prices have slumped on the news. It will not have escaped their notice that around £12bn in bonds were held and the new mortgage funding Northern Rock will release will be £14bn.

Bonus Bonanza

In the bizarre world of the bank bail outs and Credit Crunch fiascoes, despite announcing a £1.4bn loss, Northern Rock will be paying its staff and 100 executives a nice chunk of bonuses, principally as they hit their deadlines of paying off £18bn of the £27bn we loaned them. Of course, we as taxpayers get no bonus for helping them out as the buck stops at us but while we hand out money, companies can do what they like with it. I don't suppose we have a great deal of sympathy for the holders of the £12bn of bonds but it must gag in their throat to see what is going on here.

Having clapped themselves on the back for paying us back on time, there is a catch to be heard. Naturally, now that Northern Rock has fulfilled part of its obligation, it can change the rules. It has now decided to start relending in the mortgage market to make fat profits again and therefore it will pay us the rest of the money back at a much slower rate, which means they can pay themselves whacking bonuses on the profits to be made.

We must be mad, but that's what we agreed to.

Government Interference

This all started when the Government took over Bradford & Bingley. They unilaterally rewrote contracts which would delay capital repayments and reduce interest - see, it's easy when you are not subject to the law. This affected what is known as the sub-debt market where these bonds are traded and spreads became far wider as creditors started to panic.

It's fine to do it right now but of course this has long term repercussions. The sub-debt market is a vital area for all companies to raise money by issuing bonds upon which interest is paid at an agreed fixed rate. If the Government is going to start playing God in these markets then potential creditors will just walk away. While that may be a viable risk in the short term to get banks out of the mess they are in, going back to it in the future will be difficult. This has a potential spin off in the equity market where nationalisation plays havoc anyway. In reality, the City is very dependent on what the Government does today to ensure it is a long-term viable centre for capital raising. At this moment, the prognosis does not look too good.

Losses & Losers

Gary Hoffman, CEO at Northern Rock, whose puppet strings are pulled by the Consultant Ron Sandler, confirmed the taxpayer would not be paying anything further than the £3bn of capital we promised in August claiming this was enough capital to manage good and bad assets.

However, capital is being used pretty quickly there. Northern Rock suffered £1.4bn in losses in 2008, writing off £900m of bad debts and they are expected to make significant losses in 2009. The FSA has already had to waive its rules again with Northern Rock on its capital levels, you might have thought now was the most important time to be very hard. The fear is that the £3bn new capital is already blown and that creditors will be the ones holding the new losses.

Never Mind That - Lend!

Northern Rock, under the original plan, was due to return to profit and be free of our generosity by 2012 - which seems long enough, quite frankly. However, Hoffman has now confirmed that the strategy has been 'suspended' to allow it to lend the £14bn over two years at up to 90% loan to value. How nice of them to consult us before informing us they are re-inventing the rules. In fact, it is no longer apparent when Northern Rock will once again be a private company as the executives seem to see a great opportunity to have 'the best of both worlds', i.e. to make whopping profits on loans and capital they have unrestricted access to on their own terms which they can change as and when they like. It's too good to be true - but it is. How a private company would love to have such wonderful terms to raise funds, yet banks are having this luxury.

In fact, having paid back £18bn of its £27bn loan from us, it plans to slow its repayments in order to borrow a further £10bn to support the new lending while its bonus payments are a mere snip at just £9m although senior staff may get deferred bonuses in the form of loan notes - slightly dangerous as Norther Rock now has a policy of changing loan terms whenever it wishes.

We are a generous lot, we taxpayers, you know. We have also granted Bradford & Bingley the right to pay £1.7m in bonuses and a further £1.3m in deferred bonuses to senior managers who busted the company.

Wake up - the coffee smells great!

Tuesday, 24 February 2009

Get Your Cheque Books Ready

As you sip your tea or coffee over breakfast this morning you may just want to check your wallet as some day soon we may all have a nasty cash call on us and the numbers aren't pretty.

Asset Protection Scheme

As part of the bank bail out scheme, the Government has introduced the concept of an insurance underwritten by you, the reader and taxpayer, which in return for a premium paid by the bank insures their future losses. Whether those losses are solely linked to the 'toxic debts' everyone talks about or losses in general no one really knows but there are some things that may make us pause for thought.

Of course, we haven't been consulted over this but then again we really do not understand the mechanics of modern banking nor have we either the intellectual capacity or a calculator large enough to cope with the astronomic numbers. We should just sit back and applaud the PM, Treasury Ministers and the retinue of finely paid advisers for their sheer genius to do the mathematics for us.

Not to worry anyway - at RBS and Lloyds Banking Group, our liability is a mere snip at £500bn. The good fellows at these two banks have until the end of the week to agree the terms but the points at issue are what strings the scheme comes with and the cost of the insurance policy which even makes bonus payments seem cheap at an alleged £8bn for RBS. As the deal completes, it is reckoned by the BBC's Robert Peston that the total amount we are in for is a cool £1.3 trillion.

That may seem like a lot of money to someone as intellectually challenged as me but I have it on reliable oath that this figure, made up of loans, insurance, guarantees and investments is equivalent to the entire annual output of the UK economy. So no worries there, then.

Poor Banks

Naturally, the banks are negotiating hard. They certainly do not want, under such a scheme, to have to take losses themselves - surely isn't that what the insurance pays for? Not so - there will be a proportion of the loss that has to be taken by the banks anyway - a sort of pathetic 'skin in the game' and a constant reminder that they cannot just forget the debts they created.

Also, the fees, at such astronomic heights themselves, would be self-defeating if they had to be paid in cash. So the Government is negotiating that the fees are paid in preference shares and carry no voting rights so effectively the Government stakes in RBS and Lloyds, already at 70% and 43% respectively, are not increased. In reality, they are and it is just one short step away from full scale nationalisation of banks - a far cry from the harmonious free-market enterprise at the heart of Gordon Brown's dreams for the UK.

It also means that private investors in the banks are pretty much left high and dry in terms of having a stake over the profits and assets of the banks, making their shareholdings close to worthless. It is most likely to be greeted with yet another fall in share price.

There is just a chance that one day we may get some news that does not increase our future tax liabilities - that should be worth waiting for.

Like A Kipper

A fine kipper at breakfast is a rare delicacy. They are notoriously intricate and tricky to eat, fraught with the danger of choking on a bone but if you can get a good one, there is nothing like it. The only problem is that they repeat on you the whole day to remind you of the meal - that's fine unless you have a bad one.

A Kipper - An Analogy For Business?

Work with me on this one, darlings, work with me. Being invited onto an £80m yacht, moored in the Mediterranean and offered a nice stay with a businessman is a rare treat indeed. The delicacy can be awfully sweet but it is risky as it can be easily be misconstrued if people find out. The memory no doubt lingers on well after the treat but if it turns bad, it can be a haunting. In many ways it's like a kipper meal.

How such an innocent meeting will be interpreted may yet be proportional to the after taste for Lord Peter Mandelson and his liaisons with Oleg Deripaska.

The Holidays

Of course, the whole business came to light when George Osbourne considered being on the same yacht with Mandelson, then an EC Commissioner, more than a coincidence. Osbourne is pretty much a low-life himself and he made this meeting public when Mandelson was called for by Gordon Brown to be fast-tracked back into Government. The only way to get him back was to have to give him a Peerage where he shares good company with Truscott et al, then a newly created post of Business Secretary, which indeed is the powerful iron fist of the Government.

But the matter did not end there. As soon afterwards we were to learn that the coincidental meeting on the yacht was not the first time Mandelson had met Oleg Deripaska and despite telling his colleagues in Brussels otherwise, he had indeed met him prior to a crucial vote on Russian Aluminium import duties - the very element that Oleg Deripaska made his considerable fortune with. As this revelation broke, Mandelson sought to cover his tracks over the fact that the crucial days of those meetings were missing from his diary which caused the 'misunderstanding' by Brussels auditors that he had not met Deripaska before the vote which ended up in Deripaska's favour, led by Mandelson.

Fantasy World

Peter Mandelson was the Chief Architect of the New Labour Project which saw the Party move as far away from its socialist roots as to be all but conservative. The phrase 'Champagne Socialists' aptly described the likes of Blair and Mandelson who seemed to think that commerce and business revolves solely around the influence and hob-nobbing with fabulously wealthy people, yet the roots of the Party lay in its appeal to the guys on the production line. It was clear where priorities lay in the Government at places like Lindsey Oil Refinery - it had lost all touch with the very people who had constructed the Party and gave it a reason to live.

In this fantasy world, Mandelson, seems to think it is perfectly fine to be seen with Russian Oligarchs prior to crucial votes which do not just favour them but make them fabulously wealthier again. That's the kind of kipper I am talking about - the one that will come back to haunt you, a bad one.

The LDV Story

As the Government talk the talk over rescuing industry we had Mandelson preaching to us that 'The Government was not a bank', 'The lender of last resort' and that he would take this opportunity to support new green business initiatives over traditional ones. This was at loggerheads with the Car Industry and so special interest cases were talked of. As talk is cheap, there has been plenty of it and precious little action. So when Tony Woodley, joint-leader of the union Unite, spoke at the weekend of a potential car plant grinding to a halt and this being the thin wedge of up to 80,000 jobs being at risk, Mandelson did what he does best - he got on the warpath.

Mandelson got on TV and accused Woodley of rumour-mongering and scare tactics while he knew of no such car plant in such mortal danger. But there was - it was LDV Vans.

Leyland DAF Vans was the original company after DAF trucks merged with British Leyland Rover Group. In 1993, the company went into administration and it was bought by Russian car maker GAZ, who in turn are owned by Russian Private Equity House, Basic Elements Group. In turn the Private Equity house is the main investment vehicle of none other than Russian Aluminium tycoon, Oleg Deripaska. The circle is completed as it was Mandelson's department which rebuffed LDV's pleading for bridging loans as it saw sales almost halve in the last quarter and 850 jobs were immediately at risk.

We all know that Private Equity Houses have been the particular love of the Blair-Brown regime. Not only are they great vehicles to buy defunct companies but they can be used to wash profits against debts and so mitigate tax completely - and that goes for the people who run them too. They are special status companies in the UK and have been the centre of many controversies over mega-profit deals that attract no tax like MG, Mini and Rover.

The Kipper Repeats

For Lord Mandelson, it is an embarrassing reminder of that sumptuous kipper he consumed when he met Oleg Deripaska before that crucial EC vote. It is said that GAZ have ploughed millions into LDV but since December 12 it has stopped its production lines, laid off 100 staff and it employs in total 850 workers in the factory, a further 1,200 in its dealer network and around 5,000 jobs are dependent on supplying it.

They say in business 'It's not what you know, but who you know'. I have always felt this was not true, because if you do not know about the person beforehand, they may not be worth knowing like Deripaska, Sir Allen Stanford and Bernard Madoff. Lord Mandelson has become a caricature of himself, ranting at Starbucks' CEO recently in New York, larging it over trade in this country as if he knows what he is doing and then getting caught with his pants down (metaphorically speaking) yet again.

He simply cannot resist a good kipper when he sees one. This one will haunt him for a good while to come. It's time for 'Champagne Socialism' to end and remind themselves that it is those at the production lines who will suffer far more than the oligarchs and investment bankers they so blatantly favour.

Monday, 23 February 2009

Crunching on Credit

Tonight's Panorama program entitled 'Credit Where It's Due', which features a documentary by Theo Paphitis of Dragon's Den fame, looks at some of the experiences of Britain's 4.5 million small companies who provide some 13 million jobs in the credit crisis.

It should be interesting viewing and I am sure we all have our stories to tell. On the program will be comments from Lord Mandelson and there will be some shining examples of how banks and large companies take out their woes on small businesses.

Big Company Syndrome

One example was particularly appalling - a small dental supplies company in Herefordshire was unilaterally sent a notice by Boots plc, one of its customers, telling it without notice, reason or discussion that they were moving their maximum payment terms from 30 to 75 days. It means, as we all know, that using end of month 'supplier payment runs' Boots can extend terms to beyond 100 days. In this particular example, Boots not only paid after 75 days but took a 2.5% discount for doing so without negotiation or notice - no doubt assumed to be a 'prompt payment' discount. In any other circumstance such un-agreed terms could be breach of contract at minimum or, in terms of the discount taken, even theft. But as the small business is dependent on Boots for a major line of business, it just has to sit there and take it. The example was not exaggerated as Boots admits on the program that it is 'reviewing its terms' and does not deny doing this.

Morals, Ethics and The Law

I believe what Boots did was immoral, bad ethics and downright illegal and an abuse of its position as a large customer to many small firms dependent on its distribution skills. No one denies them the right to want to change terms, but there should be discussion and agreement involved beforehand at minimum.

We have a local chemist acquired by Boots - it will be the last time I use it.

For many of us in small business this is not at all unusual. While we try and pay our own suppliers as well as we can because failure to do so will effect our credit terms and therefore ability to run our cashflow and expand, our large customers can easily dictate and change terms which are not agreeable to us with impunity from the Law. It is a case of, 'If you don't like it, I will go elsewhere'.

Currently, of my own 5 contracted customers, one of them pays beyond the terms and because it is currently my largest customer, despite discussions and some warnings, they have ignored the contract they have signed and take terms of up to 60 days when my services are given up front. My cashflow is suffering heavily despite buoyant billings and at this stage it means late salary payments at least. In normal circumstances, when contracts are relatively easy to find, I would refuse to do further business with them. However, I do not have that luxury and the people I do the work for remain embarrassed and highly professional - and I enjoy working with them. It is the Finance Department that dictates the rules.

Banks and Their Role

I generally do not have any real issues with my bank. I run my accounts in credit and the only issues I have at times is that I sometimes do not transfer funds into my credit account ahead of big payments from my deposit account and so go into the red momentarily. As I use Internet Banking, this is usually never more than 24 hours and I do get charged but it is rare it happens anyway. However, at one point I had bought one of their high interest bonds with a six month, fixed interest term, which enabled me to park the money I owed in Corporation Tax and make it work for me. For just a week or so only, due to payment timings, I needed cash for salaries at the end of the year which were important to trigger tax refunds.

Would they lend me it? No. Not even the fact that I had held in a Bond in their bank over 5 times the amount of money I required for just a single week, they said they never lent money to fund salaries. In fact, they actually then told me that the terms of my overdraft were more then they should be and reduced it.

As you will see in the Panorama program, the risk of talking to the bank as a prudent measure on funding, can actually work against small businesses, as it can trigger newer, more stringent terms that they are trying to apply. By meeting or talking to you, they can claim to have had the discussion and so implement new terms which, once again, as we are dependent on their good will for our own enterprises means that we have no choice but to comply.

What Were The Bail Outs For?

I come back to the senseless, ill-planned and badly implemented bank bail outs and Government Schemes. Firstly, the bank bail outs have singularly failed in their supposed purpose in helping small businesses and house owners get credit. What has happened is that money has been quickly gobbled up to pay for continued lifestyles for the rich executives, 'wealth creators' and 'rainmakers' who got us into this mess in the first place. Secondly, the banks have used the bail outs to largely save their investment and other banking businesses - their consumer and small business divisions which typically trade profitably have been used as a source of funding to prop up these horribly failed areas. As always, banks look after these stupid executives who run their businesses on 'boom and bust' cycles and know nothing about creating and managing sustainable, steady businesses. That's why they then raid their stable, profitable businesses for cash and fire rafts of the staff in order to cover for their own failure.

In the end, small businesses and consumers pay the price of failure.

So to The Government

Lord Mandelson is a two-time failure in morals so there is no reason to suspect that he or any of the Treasury goons who came up with the bail out and Government Schemes had a shred of compassion for small business. In fact, Lord Mandelson seems only interested in those businesses whose proprietors are fabuslously wealthy which should tell us a thing or two about his morals. The priority was on sustaining the engine of the banking system, those on the edge had to fend for themselves. So there was none of that money that came with the non-negotiable stick that said X% of it goes into INCREASING loans and credit to small businesses. We hear again over the weekend that two banks have defied the Government to pay £2bn in bonuses to staff.

To put that into perspective, those banks will pay in bonus alone nearly double the amount of money allocated under Mandelson's Enterprise Finance Guarantee Scheme. It is abundantly clear where the priority lies.

Further, in some fit of bravado, the Government promised that not only would their departments pay on time, they would pay in 10 days. I can assure you that businesses who depend on Government custom are NOT receiving payments on any invoices in 10 days. It's why most small businesses shy away from doing business with Government as we become small scale banks for them - how fitting then that Mandelson's quote on Panorama tonight will be that 'The Government is not a bank.'

I come back to a central point in my blog of late and don't apologise for it. The Government, in tackling this fiasco, has surrounded itself by advisers from the world of investment banking. This has meant that the very people who failed to spot and gauge the disaster are telling us how to spend vast sums of money in order to get us out of it.

Like the Government, they are proving to know as much about the solution as the cause, and we should not have been surprised.

But what is more shocking and disgusting, is that from the start they have prioritised the saving of their own particular part of the banking industry and system at the cost of the core of banking business and the industries and consumers who depend on them.

And we have paid for it and will continue to do so for years to come.

The Gravy Train

I thought I was listening to exerts from 'The Joy of Sex' over the weekend when people started talking of 'Fiscal Stimulus' and 'Quantitative Easing' as forms of relief. Sadly it was much the same tosh rolled out by desperate people as we hurtle toward Banana Republic status.

It's good to catch up with the 'Snouts in the trough' crews who seem to make money out our votes. First up is the new business phenomenon, Tony Blair Global Enterprises Inc. Happy Tony, away from the glare of the spotlight of responsibility, has been busying himself with the serious business of making vast amounts of money. You didn't think that envoy thing in the Middle East would get in the way of more serious matters, did you? Besides, in these trouble times, thanks to his old enemy Brown, a man has to get what he can take.

You see, it's not possible to live on the taxpayer funded £63,468 a year to be fair, or to make anything worthwhile out of the £84,000 allowance he still has to run a private office - I mean his son couldn't do any research for that kind of peanuts. No, Tony has started up Tony Blair Associates which will 'allow him to provide, in partnerships with others, strategic advice on a commercial and pro-bono basis, on political and economic trends and governmental reforms' according to its website.

He should be good at the trends bit as he has plenty of knowledge how graphs point upwards but isn't so good at the downward pointing ones - that's where a partnership with Brown may help.

On The Make

Tony is a serious hitter when it comes to making money - he is sitting on a sweet advance from his publisher of around £4.5m for his memoirs which I should imagine will be as riveting and daft as Alistair Campbell's, the real leader during his terms in office, but he is also one of the City real fat cats as he receives £2.5m per annum for his role as part-time adviser to JP Morgan - and they can really afford that due to the bail out money in circulation, thanks to the stupidity of people like Tony - it's what is known as an 'Economic Cycle' in the Blair household. But he also gets £2m per annum for another part-time adviser role with Zurich Financial Services which is one of the nicest gestures of alms you could possibly get unless they want advice on insuring dodgy mortgages from ex-con men.

Such trifling hand outs to settle old favours, possibly, is not enough for a man of his calibre - after all the country and indeed, the world, owe him. So Tony is on the lucrative after dinner speech circuit along with Les Dennis and others, but 'Big' Tony is a crowd puller and he earned a nice £240,000 for 90 minutes worth of bull to hungover mobile telecom executives in Barcelona recently.

The really best part is that a spokesman claimed that Blair Associates allowed him to best organise his time so that he could devote more time to his core activities in the Middle East. As we saw in the recent crisis there, Tony was at the forefront of handling the situation and his Blair Associates hologram was advising JP Morgan, Zurich Financials and the drunken crew in Barcelona.

The Gravy Train

If he gets short of cash and things to occupy his time outside his 'core activities', Tony Blair could always become an MEP. In a recent report these guys can clock up as much as £1m in just 5 years if they work the system well enough. I would love to see the report extended to EC Commissioners and find out the scams they get into outside of back-scratching on £80m yachts for Russian Oligarchs but we will have to wait for that.

These lucky fellows can play the expenses game to their advantage according to a confidential report by Robert Galvin, the head of internal audit at the European Parliament. Some of the scams are worthy of seasoned fraudsters who are subject to police scrutiny and the law but what goes in in Strasbourg, stays in Strasbourg, as they say I'm sure. Some of the best scams are:

  • Payments paid to assistants who were not accredited and to companies whose accounts show no activities
  • End of year bonuses of up to 19.5 times monthly salary to assistants in order to use up their full annual allowance
  • Payments, supposedly for secretarial work, were made to a creche whose manager happened to be a local politician from the MEP's political party
  • Payments were made direct into the accounts of national political parties
  • Some assistants doubled their money from outgoing MEPs at the same time as receiving salaries from incoming ones
  • One MEP claimed to have paid the full £182k allowance to one person, suspected of being a relative

It's a pretty juicy business as these guys can take up to £257 per day in subsistence also, plus they can claim up to £217,800 in expenses by claiming their home was their office - Jacqui Smith should really hurry on down. Finally, as usual, MEPs have a final salary pension scheme which is even more generous than the MP scam, I mean, scheme whose cash value is around £350k over the a full parliamentary term. The best part is that we are all paying for this.

In case you don't believe anyone is scamming us, Conservative MEP, the oddly named Den Dover which sounds like a name from a Carry On film, was forced to pay back around £500k as he had inadvertently been paying his EU allowances to his family firm. A slight oversight which did not attract the attention of the law, of course.

I feel sorry for Derek Conway, in this context, he's just a second rate, cheap scammer compared to the real professionals.

Good News

It's not all bad news - last night Britain was very successful at the Oscars, with 'Slumdog Millionaire', a feel-good British film, sweeping up 8 Oscars while Kate Winslet won an Oscar for Best Actress. Way to go the Brits.

For Gordon Brown and Co. it's worth pointing out that Slumdog was made on a budget of just £10m and is set to be a real winner for this country. It proves, you don't have pile money down a drain or to rich bankers to fund talent and find success.

Friday, 20 February 2009

Here Come The Girls

It’s a sure sign the country is in trouble when beer sales fall – in fact at a rate faster than the recession itself at -5.1%.

Perhaps a more worrying sign is that loonies other than David Cameron and Nick ‘Who?’ Clegg are lining up to mount bids for leading the country. Harriet Harman has bid to undermine her glorious leader and raise her own importance by organising a Women’s Summit prior to the G20 meeting.

Should we be scared?

Probably. For the cynical chauvinists this is no ladies book club meeting or hen party, this is a serious attempt by someone who really does think she will be Party Leader at least and second Lady Prime Minister at best (or worst) to undermine Gordon’s Browns attempt to augment his position as World Saver.

I can’t say I like her. I like her husband even less. Jack Dromey was the man, who as Treasurer to the Labour Party, claimed he had no idea about the nature of the Party funding. Apart from the fact it was his job to know how the party was funded and manage the finances, it was certainly his job to find out as he was in charge of the coffers. But no, he was whiter than white when it was found that only Tony Blair, and his long-time friend Lord Levy, who knew what was going on. They had obviously taken the passwords to the computers, the ledger books and access to the bank accounts away – hadn’t they? Nor Gordon Brown, who knew a thing or two about economics or so he had us believe, who was Chancellor, had no idea where or why money was being taken in or possibly repaid at some point in the future. No such thing as adding up or keeping the books tidy in the Labour Party despite the fact the Treasurer would have to be aware that there was a serious hole in the finances which needed shoring up.

It’s about as believable as Bernard Madoff having a 'Mom & Pop' accountant or Sir Allen Stanford having accountants with tiny offices and two desks in Enfield. Indeed they did – how convenient?

The Italian Connection

Rather like Tessa Jowell, whose ‘former’ husband has taken the dive on behalf of his alleged briber, Italian PM Silvio Berlusconi, this week, Harriet claims to know about as much as Manuel the Waiter when it comes to her husband’s doings – how very convenient. Jowell reacted very badly to finding out her husband might ruin her career despite helpfully signing forms when their mortgage was remarkably paid off on a house in the Cotswolds from a lovely ‘gift’ by their Italian benefactor's 'people'. Rather like his old friend and holiday largesse receiver Tony Blair, Berlusconi enjoys a life of freedom despite allegations of ‘bribes’; in Tony’s case they were mere peerages for loans. For Berlusconi, it was just a way of life.

Then again, I am sure Harriet has a clear conscience – as does Jack, Tessa, Tony, Gordon, Lord Levy, Silvio et al.

Dodgy Deals Galore

On the subject of dodgy deals, we are told that Jacqui Smith will be hauled up in front of yet another committee with a foregone conclusion over her claiming £116,000 in expenses on her alleged second home – the one she spends most time in no less. According to complaints by neighbours of her ‘primary’ residence which happens to be a room in a house, she spends no more than 2 days a week there despite it being in London where she is supposed to work. No surprises here, I think, as I would imagine this is the thin edge of the wedge of the vast scam that is MP, Civil Servants, National Assembly and Councillor expenses generally and I certainly think she is not putting much effort into her job.

Rising Value

But a lady who is rising in stock value quickly is none other than Secretary to the Treasury, Yvette Cooper. In the skulduggery that is the slow and clandestine preparations to replace Brown as Leader, Cooper has emerged as a viable candidate to at least block Harman’s manic bid. Cooper is the one who has been trooped out to give condescending , ‘Janet & John’ interpretations of high finance so that the public can understand that billions down the toilet is not as bad as we think and the only way to fight the dreaded doom of financial oblivion so neatly masterminded by people like her. I find her obsequious and sanctimonious tones less than credible and if it represents the standard of opposition to Harman then we may as well have ‘Watch with Mother’ rather than Parliamentary Debates and PM Question Times in the future.

And Your Coffee Is Rubbish Too!

After Starbucks's CEO Howard Schultz had said on a TV Show in New York that the UK was spiralling down (faster than his company's profits), Lord Mandelson, ever the true patriot, reportedly used a four letter word in questioning Schultz's knowledge of the UK economy.

Evidently, Schultz had read my blog linking the bursting of the South Sea Bubble and the collapse of the Coffee House Culture in Britain and how his company's decline is similarly linked to the current recession - or at least that was my view.

I think there would be several people who might use several four-letter words to question Lord Mandelson's understanding of any economy let alone the British one.

But that's Mandy for you, all froth and no cappuccino.

From Facebook to Face-ache

On a non-political note, I see Facebook has withdrawn its new Terms and Conditions which would have allowed them to have kept people’s personal information for themselves even if you decided to delete your account. Amid a clamour of complaints euphemistically termed as ‘Questions’, Mark Zuckerberg (the founder of Facebook) has sought to calm his followers by reverting to the old terms until they ‘can figure out’ a way to do it without any legal recourse.

Many lawyers and concerned people who know something about data privacy think this will be the last of the matter but it is really only Round 2 in the journey that is known amongst the Venture Capital glitterati as ‘Monetizing’. Facebook has been pretty much a huge sump for cash since its inception and despite its extraordinary valuation has clocked up no revenue to talk of to date. This is because it has spent its money accumulating vast amounts of data – the latest is the craze for people to admit to 5 or so things that people didn’t know about them which sounds like a recipe for disaster if ever I heard one.

The fact remains that Facebook is on a race to create a credible and sustainable revenue stream for the future and it has just one asset from which to extract this – that’s us and our valuable data. So, if you have Facebook as your home page, think about this for the future – from there you may enter many other applications or websites and even spend money. Imagine being given a Facebook ‘credit card’ or being tracked as you do so with Facebook getting a referrer fee or percentage of spend in exchange for making your data available to others.

Not possible? Just you wait and see.

Thursday, 19 February 2009

It's Just Not Cricket

Call me old fashioned, but I am a bit of a cricketing snob. Don't get me wrong, I just love the new 20-20 cricket and would love to see the new IPL on TV - I think it is true 'Blue Ocean' thinking on a previously tired sport. But when a Texan billionaire offers $20m just to stage a couple of games in the Caribbean, some of them against County opposition, you had to wonder what was the point.

Because he could, would seem to be the answer. When I first read it, I had to look the guy up and since I used his name in my blog on Cricket and Blue Ocean Thinking - Sir Allen Stanford, for indeed he is a Sir, albeit conferred on him by an island other than Great Britain, seemed to be a kosher billionaire. I tried to look at where his cricketing credentials had come from - did he play once even in a pub team? You don't get much cricket in Texas as far as I'm aware. It turned out his connection was with the Caribbean. If you looked at his website when I had done, very little was revealed about the sources of his wealth other than to say his companies were passed down to him from his father and that he was extremely active in Caribbean life and charities there. He seemed like the sort of guy you would be very keen to tap up for a few million for a couple of games of cricket.

Furthering The Sport

It comes as a bit of embarrassment then that just days after his re-election as Chairman of the ECB, Giles Clarke, who was instrumental at negotiating and putting together these daft games as part of the 'Stanford Super Series', has seen Sir Allen arrested by US Authorities in an alleged $8bn financial fraud.

When the actual games were played last year, we had the daft sight of England playing the Stanford Superstars Team (who were a select bunch of West Indian cricketers) for a one-off, winner-takes-all $20 million bonanza. It proved very little and the only thing about the England Team that turned up were their wives and girlfriends - it was a farce. Undeterred, Clarke had felt that this was some sort of template for a future series and succumbed to negotiating for more of these pointless matches, when the real action was taking place in India and the real goal should have been how to accommodate the single most exciting thing to happen to cricket for years into the packed cricket calendar instead of packing it even more with meaningless games.

Not wishing to pre-empt things but perhaps the best thing that could have happened was that the founder of the dull series was arrested for alleged fraud so that the matter could be ended once and for all. While Giles Clarke may not be linked to the fraud, of course, it would seem an appropriate time to question his judgement on England's future, already dim enough ahead of the 2009 Ashes, and ask him to resign. Let's not even start mentioning his handling of the Kevin Pietersen captaincy fiasco.

End of An Era

Again, as a bit of a cricketing snob, and a greater lover of things like Test Match Special, on TV you simply could not beat the acid tones of Richie Benaud's insightful commentary. It is the end of an age of brilliant commentary as, at the ripe old age of 78, he has finally decided to hang up his microphone and depart the field.

I have always been a poor imitator of Benaud, with his crooked mouth and one-eyed delivery but that has never stopped me trying and boring everyone senseless with my 'What a great delivery', 'That's the shot of the day', 'He's gone', 'Thank you Jim, good morning everyone', and 'The only cold thing I had after a day's cricket was a beer.' At one time, just about all of my friends were at it giving imitations of varying degrees of worthiness of the great man. We even managed to get hold of the hilarious sets of Aussie tapes which spoof the whole Channel 9 commentary team who have difficulty pronouncing the Sri Lankan cricket teams' names. These tapes would be repeated every Summer whenever there was a bit of cricket on and like Monty Python they had an evergreen comic value.

So imagine should you ever be stuck on a plane from the South of France and you sit next to the Great Man himself, Richie Benaud. This did not happen to me, but it did to my old rugby playing friend whose only knowledge of cricket was that Benaud was a commentator. So when my friend related the story it went along the lines of this.

'I bet you didn't know how to spell Richie Benaud's name,' he said as openers. Showing my friend my copy of 'Richie Benaud, my spin on cricket' I explained I was one of his best fans so I did and knew the French connection through his autobiography. 'Well,' he continued, 'I'll bet you didn't know he played cricket.' I was aghast. Apparently Benaud had said to him that he originally came to England in 1954 - my friend remarked that was young for a commentator and Benaud explained that he had been an Australian Test Cricketer and indeed had captained the side later.

'Really?' said my friend. 'You know I have a mate back home who does a great imitation of you - here listen to this. I keep my teeth inside a jar, I broke me 'and, dad,' and various other lines from the stupid tapes including the vernacular. Benaud, get increasingly nervous and horrified, had no idea what he was talking about and clearly thought my friend had confused him with someone else or was indeed just bonkers. Finally, having met again at the luggage carousel, my friend had invited Richie to the Garibaldi pub in St Albans and he happily agreed to come along and meet all these friends who could impersonate him so well. To my knowledge Benaud has not yet made good on that promise. I wonder why.

Richie Benaud gave up commentating in the UK when cricket moved away from free to view TV - it was the mark of the man that he believed it should be viewed by as many people as possible. He is one of the greatest of all, the finest leg spinner in the game before Shane Warne and one of the greatest Australian Captains of all - he was a Professor of the game and his insight, acerbic comments and Aussie lilt will be much missed by the purists.

I wonder what Benaud would have said if Giles Clarke had asked his opinion of the farcical Stanford Series before he ventured down that path?