Green Shoots And Leaves?

An article on the web this morning tells us that bank trading volumes are up for the first time in two years, giving some clear signs of a recovery. It does point out that pensions and life insurance products still remain depressed, which I would argue are the better long term indicators, but the point is taken.

However, a cursory glance at the familiar barometer of the employment situation, The Sunday Times Appointments Section, revealed that confidence is still at rock bottom. Firstly, you would be hard pushed to find a single private sector job advertised in there. Secondly, the number of Non-Executive jobs and Public Sector jobs seems to be dominating all aspects of the section. Indeed, I had a good chuckle seeing a nice advert for a well sponsored, 'Non Executive Director of The Year Awards' night which was to celebrate the outstanding achievements of these people who wear similar ties. No doubt Tom McKillip and the army of NXDs who sat on the boards of banks and other financial institutions getting fat and rich while doing nothing, will be right up there in the award ceremonies showing the way.

Getting back to the Appointments Section generally, it is clear that the Public Sector seems to be propping up the high end recruitment sector with companies like Odgers and Tyzack prominently and expensively displaying pretty naff Public Sector jobs. It seems the Private Sector has gone to sleep for a long while as the Section had been like this for around a year. I cannot recall a time in the two or three recessions I have sat through when the Times was so thin on Private Sector jobs. The hunt for good talent has gone underground at minimum, but it more likely reflects business conditions.

Meanwhile, in my layman's observationary mode, my wife and I ventured into London on Saturday and caught the final hour of shops around Oxford Circus. There were no shortage of shoppers - it seemed very busy. But the shop assistant I spoke to at Libertys pointed out that the credit cards were mostly not from the UK but are tourists enjoying the almost perennial sales we seem to have at the moment. We went for the early supper at a really superb restaurant on Poland Street, Vasco's, and had the pre-theatre meal of two courses for £19.50 each. The food was outstanding and the owner, observing that we were the only people in the restaurant, berated the fact that business has been like this for months - no early diners for the theatre anymore, but clogged full from 8 o'clock. He was right, Soho seemed absolutely empty and getting a drink with a group of friends at the Argyll Arms was easy, they even allowed us to fully occupy the upstairs dining area as only one family were in.

Pubs and restaurants are good barometers of the times we are in. On a Saturday night in early Autumn, with pleasant if windy weather, the eating and drinking places were nowhere near full or empty. London is no different from most cities. The green shoots are not so evident.

That said, the number of placards outside houses marked 'For Sale' seems to be on the rise in my area although I know some people who have had their houses on the market for 18 months with not a single viewing. It would be a shame if the biggest feature of a recovery is another housing boom as that would be a sure-fire indicator we put our money in the wrong place as they are precisely the kinds of stupid asset inflations that got us into trouble last time around. But that's another story.

For me, the green shoots are not yet in evidence in the right places.

Post Crash Experts

If only Alistair Darling and Lord Adair Turner had ever visited a front bar of a pub nowhere near the City prior to the credit crunch and financial meltdown, they would have got their chest heartlity prodded and been told in no uncertain terms that there was a massive hole looming in Britain's finances and that our economy had become unrealistically dependent on over-inflated asset values which were being traded spuriously to raise cheap money on the international markets.

Of course, none of us armchair sages would have had an earthly idea about why this was so dangerous, what these derivative products actually were, how badly our economy would be affected by asset value falls but we all new that what went up HAD to come down. There was a bubble inflated to maximum and it was going to burst - and boy, didn't it just.

These Governemt and associated 'illuminati' like Turner sat back murmuring how beautifully under control everything was. Even when things started to go worng like the 'discovery' of sub prime in America, no one linked this with the financial system in general - not even the bankers. As the crisis got worse, Ministers told us that it can't happen to us as we had a 'robust economy' and then that recession would hurt us less as house prices were more stable here. But the whole vicious circle of finance catches you up - all you needed was one small puff of bad gas and the whole financial system would collapse like a house of cards.

So now that it has all happened, Lord Tuner has had an epiphany. After all that education, years in the Consultancy business, heading the CBI and sitting on numerous Quangos, he has suddenly realised that bankers were in fact trading products that had no real implicit functionor even value other than for them to earn money and that these bankers had little understanding of the implications of doing so. Other, of course, than the fact that they could earn sensational amounts of money by doing so. Mr. Darling has also suddenly woken up and has smelt similar coffee and now espouses the same 20-20 hindsight wisdom as Turner. We are all finally singing off the same hymn sheet.

Not as such. What has either the FSA or the Government done to outlaw the trading of these daft products? Nothing. In fact, as we piddle about fiddling with bonus cultures and wondering if everyone will do the same thing or else one us gets left behind, the written down toxic debts are being 'traded' for vast profits right in front of our faces. Stuff that we now guarantee or have written down in value with our taxpayer cash are actually being used to create vast new profits for banks as if they have suddenly reclaimed some value. The embers of Lehmans and some 94 other banks that have failed in the US are being raked over for little nuggets to trade while Barclays do not even use a white cloth to hide their toxic debt that they suddenly make vanish and create a $3.9bn profit by doing so while at the same time they make 45 former employees millionaires - overnight with one click of the computer and a swish of the pen - it even makes their capital ratio look better it such a good magic trick.

Despite all this post-crash wisdom, nothing has been done. And nothing will be. But talk is good - it helps us taxpayers get used to the fact that we can blame people who have added over a million to our dole queue who will this year be getting multi-million pound bonuses after a short technical hitch to their money making. The fact that the sails are set fair for the next crash seems to ellude their feeble minds and that talking is not going to get the problem fixed. It will take one of the leaders to confront the issue and make sure that his/her country's economy is no longer so dependent on a few people making more money each year than an average worker would make even if they won the lottery jackpot at least once a year.

The G20 starts this week, my bet is that nothing comes of it that will change the behviour and machinations of banks substantially and we will all forget the crash until the next one happens again. Then the same sages can act as dumbfounded as they were with this one.

In a cruel blow to Odgers, the recruitment company charged with headhunting the new CEO for UKFI who manage our 'investments' in banks, they have been fired as they took on an ex-RBS banker.

They learned the bitter lesson that headhunters and recruiting managers should all take on board - just because you have experience of an industry, it does not mean you know anything about it.

Scam After Scam

The reason we put up with it is because we have no say in how our own money is spent.

What the hell am I referring too? Of course, it is our 'investments' in UK banks amongst other things - the sort of investment that needs to be managed by some cerebral high-brow who can watch when the cursor gets above the value 'bought' and press the button to 'sell'. For that, one of the top headhunters have snaffled a former RBS banker to lead the intrepid search for the person who has the right sized digit so that they don't press 'buy' - the same headhunters who the TCCB paid a fortune for in order to select the acting coach of England's cricket team to be the coach - the one and only Odgers. Money well spent, indeed.

Well, you may be happy to know that as the banks gear themselves up to do ever more risky deals with our cheap money and then pay themselves massive bonuses like the one I reported on at Barclays on Friday, the scam works equally well with our money at the opposite end.

Let me explain. You see we bailed out the likes of Lloyds and RBS, the former having bought HBOS, has 28% of the UK mortage market. Now we injected some £70bn into them in new capital, guaranteed a load of debt, ring-fenced a load of toxic debt, gave them loans at virtually no cost and walloped a load of Quantitative Easing money down their gullets too. You might possibly think that might be good for us. Well, if you want a mortgage, it isn't.

Last week, the Bank of England voted to keep interest rates at an historic low of 0.5% for the fifth consecutive month. The cheapest mortgage you can get today, even with 40% deposit is 4.95% - that's nearly 10 times the base interest rate. If you wanted a five year deal with RBS or Lloyds, then you are looking at shelling out on their new, 'highly competitive' deals of 7.49% at Lloyds or 7.25% at RBS - some 15 times the base rate. The shrewd people amongst us would note that the current superb mortgage rates are now higher than prior to the credit crunch. The best rate you will get on a 10% deposit mortgage in the UK is 6.19%, a whopping 12 times the base rate.

There aren't many industries where you can charge such rates. And this is at the time when the public owns a share in at least 5 High Street banks, two of which who offer mortgages we own outright (the Rock and Bradford & Bingley). For all the blustering and piffle from Cabinet Ministers and Gordon Brown himself, we are being racketeered by the very companies we so very generously were proxied to bail out.

If you sat down and tried to try to write the worst case scenario for a financial mess, you could never have got to within a million light years of the khazi we are in. You could also never dream of writing some of the guff we are told about how well off Britain is in this scenario by the idiots who run this country.

As taxpayers were are being royally shafted at all ends - and the shafting has only started as the cuts in public services and the higher levels of tax to pay for our own largess has not yet kicked in.

You couldn't dream it up - we bailed out our banks so that they could absolutely shaft us to make massive profits on their lending while they continue to take mega-high risks to pay themselves huge bonuses. And it's our own money they are using.

I've said it before and I'll say it again - we must be stark raving bonkers.

Cricket In A Spin

The ECB has been in a right mess of late. Not least because the absurd situation that developed around the rift between former coach, Peter Moores, and his Captain, Kevin Pietersen, which resulted in both being dismissed which showed a lack of management skills, but they then followed it up with the piece de resistance when the saviour of English 20-20 cricket, Sir Allen Stanford, was arrested for a $9bn financial fraud.

So, the theory is, having bungled monumentally lately, they are taking no chances in appointing the new coach, ready for the vital Ashes Series this Summer.

The Next Cock Up

In doing so, the ECB has hired Executive Headhunting firm Odgers Ray & Berndtson to handle the recruitment process.

Clang!

Yes, for those of us in industry, ORB have a decent reputation in their field although many would argue most of these headhunting agencies are just glorified CV sifters who have zero experience in industry so would have difficulty spotting and motivating talent even if it came up and slapped them in the face with a damp kipper. So expecting them to have the ability to find a cricket coach is about as stupid as organising a pointless triangular tournament for $20m prize money in the Caribbean not even between two countries.

Besides I don't think anyone in ORB has any experience of Test cricket barring watching the odd game in a Corporate Box unless I'm mistaken - that has never stopped Headhunters talking a fine story in industry in the past but I would assert some knowledge of the sport would be pretty essential outside of reading Wisden.

Again, Giles Clarke, the CEO of the ECB, excels himself in his ability to waste money and time in producing an array of the usual suspects that he could have read the back pages of most newspapers and found out for himself. Quite why he thought that an Executive Headhunting firm could have read those pages better or quicker than he or his management is quite beyond belief.

The Suspects

So the Headhunters have drawn up a short list. Miraculously they all are something to do with cricket, although only two of them have really played any Test cricket, one of the others had a game or two and one only played just 7 games in first class cricket - perhaps they should have looked at some decent pub cricket coaches too. Listening to the likes of Geoff Boycott, Ian Botham, Nasser Hussein and Jonathan Agnew - and they are an assembly that have a good deal of experience at the highest level - you might be led to believe that having Test level experience is pretty fundamental. So it would be great to see what the ECB gave as criteria because this list really could have been put together one afternoon in Trap 1 reading the back pages of the Times and the Telegraph.

1) Andy Flowers - Formerly a fine Test cricketer from Zimbabwe who is now British. He averaged over 50 at Test level and that would enthuse the likes of Boycott. Sadly, as current Assistant Coach under the defunct Moores, he is perhaps tarred with the same brush. However, the man who received the toughest of treatment, former captain, KP, is one of Flowers' biggest supporters for the job and it could be fair to say he has done well as Acting Head Coach in the West Indies. After his batsmen have scored 8 centuries so far he could argue they are playing well, but at 1-0 down and yet to take 20 wickets in any of the Tests, it could argued he is one dimensional as a former batsman.

2) Ashley Giles - One of the heroes of Ashes 2005, England and Warwickshire's former left arm spinner and average late middle order batsman is ever popular in England. He is currently Director of Cricket at Warwickshire and has been their spin coach. He is a good lad in the dressing room and that could be one of his weaknesses. Strongly associated with former captain Michael Vaughan, he may be too close to the players to exert sufficient authority.

3) Graham Ford - Yes, who? A South African who is currently Director of Cricket at Kent, has the vast experience of playing just 7 first class matches and scored just 142 runs in the process. This puts him marginally ahead of me and a swathe of decent club and pub cricketers. Whilst some of his charges at Kent are supportive, it is prominent that he turned down one of the dream jobs in cricket which was to coach India while he is more of a media recluse than front man - and we thought Duncan Fletcher was bad. Frankly, how he made the list I don't know considering Kent haven't been exactly burning up the Championship - at least Fletcher proved himself by taking an unfancied team to the County Championship at Glamorgan.

4) Dav Whatmore - An Australian but we'll forgive him that although he may not be the ideal man to have around as coach when playing.....the Australians. Yes we have shades of Graham Henry coaching the Lions here. However, at least he did play a smidgen of Test cricket and in his 7 Tests he scored a mammoth 293 runs. He can certainly teach the likes of Strauss and Pietersen a thing or two then.

Actually he probably could. Having taken a second tier nation at Bangladesh to their first victories against top tier Test Nations, he has a good record of doing something with nothing - a strong qualifier for England. But there is a good deal more - he rebuilt Sri Lankan cricket and coached them to the thrilling World Cup win in 1996, he has coached Lancashire to double one-day cricket champions and is now Director of India's Cricketing Academy. This makes him sort of more of a one day specialist but what do I know?

He is widely respected and there is no doubt he has a superb track record working with lessor teams in international cricket which has earned him his plumb job now.

And that's it. No more candidates. Just because Headhunters are involved doesn't mean to say that we can poach other teams' coaches or find any up and coming talent who may be blazing a path to future glory. This is the sum of their diligent work.

Mistake After Mistake

Frankly, if the ECB are paying fees for that then they ought to be shot. Two blokes in a bar could have done the same in 30 minutes while they were more likely to come up with other, just as suitable, candidates. And why people like Tom Moody cannot be motivated to consider the position shows the Headhunters have just gone for fast track fees - the least path of resistance.

What do you expect? I suppose good on Odgers for diversifying from Finance and Hi Tech - no money in that any more.

Bring back Duncan Fletcher - all is forgiven, except that dreadful book you wrote!