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Sunday, 30 December 2012

Christmas 2012 #1

The Queen's speech.  The daft old bat could have droned on about what she did this year, where she went, who she met etc etc.  Instead she gives over half the broad cast to the Military Wives Choir.

Class, pure class.

If this woman wasn't already queen, and we needed a monarch, I would vote for her.

Thursday, 29 November 2012

The funniest EU joke since the Nobel Peace Prize

In a speech in London yesterday on the future of Europe, Tony B. Liar let us know that the EU is undergoing its gravest crisis since its formation after the second world war. He even said that some EU countries are undergoing an existential crisis. Maybe, but they have been through worse.

And would that leaving the EU would be "hugely destructive of Britain's interests", and he argued that "our country faces a real and present danger in edging towards the exit".

Leaving aside the last time the same politician warned us against imminent danger, Mr Blair is telling us that outside the EU, Britain (GDP per capita: $35,494) faces an uncertain economic future, much like Norway  (GDP per capita: $61,882) and Switzerland  (GDP per capita: $49,151).  Indeed, without our annual contribution of €15 billion a year, the country would be an industrial and financial wasteland.

What Mr Blair is really saying is that if UK tax payers decide to take back their own fishery and farming policies, plus a host of other measures, he has absolutely no chance of being crowned the El Presidente de la Unión Europea, an idea that has fascinated his wife Slotgob ever since she was put in her place by our own head of state.

Tuesday, 20 November 2012

Autonomy: a law unto itself

I like to think I know more than a little about tech companies.  Its not my business area, but it is in my background. And Autonomy has always been a bit of a mystery to me.

I have a simple view on tech companies. Who buys their products and/or services, and how much do they pay?  technology is driven by innovation, so the profit margins will be pretty good, at least until somebody else figures out how to match or surpass your product and then you become a commodity supplier and then disappear.  Remember Sperry Univac, Amdahl, Ashton Tate or Loitus?  Neither do I.

But Autonomy always seemed to be valued way above what I would expect for a one trick pony (fancy searching) with a few related but low value acquisitions (archiving, document retrieval), and to be frank, although I heard a lot about Autonomy businesses, I don't remember hearing many people telling me how much they were paying for Autonomy products and services, and to justify a $10 billion price tag, even with a supposed 55% annual revenue growth, you need a lot of sales.

Which is what makes the following blog post from a year ago by Alan Pelz-Sharpe, a man from whom we may be hearing a lot more, about his misgivings about the acquisition of Autonomy by HP, and statements by the former (although current at the time) boss of HP, Leo Apotheker:

Leo Apotheker wildly stated that Autonomy had "a strong cloud based solution set" and Autonomy claims that over 400 software companies are building applications using Autonomy IDOL.  Well first off I am not sure what this strong cloud based solution set consists of...is it the archiving solution from Zantaz that Autonomy acquired? Surely not as that would contribute a tiny fraction toward this valuation. As for the 400 software companies building applications on IDOL, in effect embedding (OEM) IDOL, we just can't find them.  What we can find is a lots of people using basic document filtering widgets (KeyView) and some using the old Verity K2 search engine, but hundreds of software firms using IDOL? They are nowhere to be seen, at least by me, and I watch pretty closely.

Plus we have some pretty dodgy accounting with, according to HP, intra-group licenses reported as sales and loss-making hardware sales booked as software sales to massage sales growth figures, or to use HP's words:

"... HP now believes that Autonomy was substantially overvalued at the time of its acquisition due to the misstatement of Autonomy’s financial performance, including its revenue, core growth rate and gross margins, and the misrepresentation of its business mix.
Although HP’s investigation is ongoing, examples of the accounting improprieties and misrepresentations include:

  • The mischaracterization of revenue from negative-margin, low-end hardware sales with little or no associated software content as “IDOL product,” and the improper inclusion of such revenue as “license revenue” for purposes of the organic and IDOL growth calculations.
  • This negative-margin, low-end hardware is estimated to have comprised 10-15% of Autonomy’s revenue.
  • The use of licensing transactions with value-added resellers to inappropriately accelerate revenue recognition, or worse, create revenue where no end-user customer existed at the time of sale. 

This appears to have been a willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers."

Saturday, 3 November 2012

MacShane says

"I want to thank the people of Rotherham for allowing me to serve as their MP and the Labour Party for allowing me over the years to fight for the causes I believe in."

"I love the House of Commons and I hope by resigning I can serve by showing that MPs must take responsibility for their mistakes and accept the consequences of being in breach of the House rules."

Well how about showing us how much you love the rest of us by paying back the stolen money?

Sunday, 28 October 2012

For the benefit of any readers in China

... who have found that the NY Times article stating that the Chinese premier and his family have trousered $2.7 billion since he came to power has been blocked by the Chinese authorities.


Petar Kujundzic/Reuters
他们持股的对象包括位于北京的一处别墅开发项目、中国北方的一家轮胎工厂、一家曾参与修建包括标志建筑“鸟巢”(Bird’s Nest)在内的一些北京奥运场馆的公司,以及平安保险,世界上最大的金融服务公司之一。
今年70岁的温家宝,作为一个仍然严重依靠政府带动的经济体的总理, 在为其亲属带来巨大财富的主要行业中拥有广泛的权力。比如,中国公司如果不经过他手下的机构审批,就不能在证券交易所上市。他在决定是否批准能源与电信等战略行业中的大型投资项目方面,也起着关键作用。
这些看上去是在掩饰自身财富的努力显示,围绕着中国精英统治阶层的政治氛围相当紧张,很多人坐拥巨富,却不愿引人注目。6月份,彭博资讯社(Bloomberg News)报道,中国下届国家主席的既定人选、副主席习近平的亲属积累了数亿美元的财产,中国政府随即在国内屏蔽了彭博社的网站。
温家宝夫妇唯一的儿子曾将自己开创的一家科技公司以1千万美元(约合6千3百万元人民币)的价格卖给香港首富李嘉诚(Li Ka-shing)家族,并利用另一个投资平台成立了新天域资本公司(New Horizon Capital)。相关记录与对银行业人士的采访显示,目前,该公司是中国最大的私募股权公司之一, 其投资合伙人包括了新加坡政府。
记录显示,总理的弟弟温家宏(Wen Jiahong)掌控着2亿美元(约合12.6亿元人民币)的资产,其中包括污水处理厂与回收企业。
尽管还不清楚温家宝对自己家族的财富知道多少,但在维基解密(WikiLeaks)2010年公布的美国国务院(State Department)外交电文中,有一份电文显示,温家宝对其亲属的商业交易有所了解,且相当不满。
总部设在瑞士的世界珠宝联合会(World Jewelry Confederation)的主席加埃塔诺·卡瓦列里(Gaetano Cavalieri)已经认识张蓓莉很多年了,他表示:“在中国,她是最重要的人。她就是中外合伙人之间的桥梁 。”
1999年夏,在达成了从俄罗斯和南非进口钻石的协议后,中宝戴梦得在上海证券交易所(Shanghai Stock Exchange)上市,募集到了3.25亿元人民币。根据公司文件,这次募股为张蓓莉的家人带来了大约800万美元(当时约合6600万元人民币)。
尽管她从未被列为股东,但她以前的同事和生意伙伴表示, 张蓓莉早年成立的钻石合伙企业最终成为了一系列企业的核心,她帮助自己的家族和同事获得了那些企业的股份。
“温家宝成为总理后,他妻子出售了部分钻石相关的投资,转而进入新的领域,” 一名同该家族有过生意往来的中国高管说。 因为怕遭政府报复,这位高管请求匿名。公司记录显示,从上世纪90年代末开始,一群富商轮番买进这些钻石公司的大量股份。出售方通常是温家宝的亲戚,然后,在这些商人的帮助下,他们将所得再投资到房地产和金融等有利可图的项目中。
在中国,人们普遍认为高层领导人的下一代构成了一个特殊的阶层,人称“太子党”。这些人往往持有常青藤(Ivy League)名校的文凭,享受贵宾待遇,甚至能在热门股票发行时以优惠价格获得股票。
另外,根据公司记录及熟悉其家庭投资情况的人士的陈述,温云松与其妻还拥有珠宝公司、网络公司和动画公司的股份,他们甚至通过非直接的方式,拥有政府鼎力支持的在线支付企业联动优势科技有限公司(Union Mobile Pay)的股份。一直以来,他们住在位于北京市中心的总理官邸内。
温云松毕业于北京的精英学校,并在北京理工大学(Beijing Institute of Technology)取得工科学位。他后来出国,在加拿大温莎大学(University of Windsor)取得了材料科学的硕士学位,并在美国伊利诺伊州埃文斯顿的西北大学(Northwestern University)凯洛格商学院(Kellogg School of Business)取得了工商管理硕士学位。
熟悉温云松生意的人透露,他2000年回国后,在五年时间里和别人一起成功打造了三家科技公司。随后他将其中两家公司出售给了香港的企业家,其中包括亚洲首富李嘉诚(Li Ka-shing)的家族。
经查阅香港与北京的公司注册信息发现,温云松在2000年成立了他的第一家公司优创科技(Unihub Global),提供互联网数据服务,启动资金为500万美元。资金来源于一些关系密切的亲戚与他母亲以前在政府和钻石行业的同事,以及香港第二富有家族的家长郑裕彤(Cheng Yu-Tung)身边的一个人。这家公司的最早客户是一些国有证券公司和平安保险。总理的亲属持有大量平安保险股份。
2005年,他进行了更大胆的尝试,开始进军私募股权行业,和一群西北大学的中国同学成立了新天域资本公司。公司很快从各方投资者募集了1亿美元的资金。投资人中有日本软银集团(Softbank)旗下的思佰益控股(SBI Holdings)和新加坡政府的投资基金淡马锡(Temasek)。
香港行业出版物《亚洲私募股权评论》(Asia Private Equity Review)的主编凯瑟琳·吴(Kathleen Ng)说:“他们的第一个基金就一炮打响。这使得他们可以募得更多资金。”
目前,新天域管理着逾25亿美元的资金 。
其他与总理的亲属合作过的富商拒绝就本报道置评。段伟红强烈否认自己与总理或其亲属存在任何金钱往来,并表示,将平安股票放在他人名下,只为避免媒体关注。“投资平安的钱全是我自己的” ,曾经是平安监事会成员的段伟红表示。“我做的一切都是合法的。”
与温家宝的亲属进行合作的另一位富商是掌握着香港集团企业新世界发展公司的郑裕彤(Cheng Yutung)。《福布斯》(Forbes)数据显示,他的身价为150亿美元,是亚洲最大的富豪之一。
在20世纪90年代,新世界正在中国内地为一家专门经营高档珠宝的姊妹公司寻找落脚点。1998年,这家名为周大福(Chow Tai Fook)的连锁珠宝零售企业在中国内地开设了第一家门店。
相关记录与对当事人的采访显示,郑裕彤的手下向背后有温家宝的亲属支持的钻石企业进行了投资。还与这些企业一起,共同投资了一系列企业实体,其中包括生命人寿 (Sino-Life)、国民信托(National Trust)和平安保险。企业披露的报表显示,郑裕彤作出的这些投资现在至少价值50亿美元。连锁珠宝企业周大福也得到了蓬勃发展。今天,该公司42亿美元的年收入中,60%来自中国市场。
哥伦比亚大学法学院(Columbia University Law School)教授克提斯·米尔哈特(Curtis Milhaupt)曾研究过中国公司架构,他表示:“复杂的企业架构并不一定有阴谋诡计。但在企业所有权和政治权力紧密交织的中国体制之下,壳公司就会放大资产所有人不明、资金来源不明的问题。”
“这将影响他手中剩下的政治力量,” 研究中国领导层的专家、加州克莱蒙麦肯纳学院(Claremont McKenna College)的政府学教授裴敏欣(Minxin Pei)表示。

Tuesday, 23 October 2012

Who has caused the recession?

As ever its all in the numbers.  Some say it was the fault or default of the banks in 2008.  The government poied up about £70 billion in cash, but that was used mostly to buy shares, which had and still have a value.  Discount the value of the shares and we are down about £25 billion.  The government also carried out some balance sheet support, wrapping banks assets in a cosy 0% risk weighted guarantee, which was nice because we made some premium income for providing the service and the guarantees were never likely to be called and they weren't, and they are gone now.

So net net the banks have cost us about £25 billion, which is not good.

Now compare that with the £600 billion of extra government borrowing from 2006 to 2012.  That's £600 billion borrowed out of approximately £3.5 trillion of spending . £575 billion of that borrowing had nothing to do with banks.  It was spent on civil servants pay, welfare and all the good things that we expect from government, except that in those 5 years the government spent 20% more than it was collecting in taxes, and has remarkably little to show for the "investment" that politicians claim their sending represents. The fact that we can't really point to anything enduring paid for out of this borrowing show how wasteful it is (capital schemes with solid assets are generally under PFI and don't show up in these numbers.

So if the £25 billion the banks have cost us created a problem, as some might contend, why is that any different from the £575 billion of government spending in excess of revenues.The £25 billion thrown at the banks might have caused a hiccup, but since money is fungible the £575 billion that the government has borrowed and spent and will never see again must be a problem that is at least 23 as big.

As ever, the truth lies in the numbers.

Sunday, 21 October 2012

Scotch that

Mr Salmond said this weekend "Why on earth do we allow this incompetent bunch of Lord Snooties to be in positions of authority over our country? Westminster would put this first class nation in the second class carriages. No more second best for Scotland. It is time, it is past time, for a fresh start for our nation."

All fine and bullish except who does he think has been running the UK since 1997.  The current PM is clearly of Scottish descent, going on his name, so are Liam Fox and Michael Gove, as is Lord Strathclyde, the leader in the HoL and Danny Alexander.  I make that 20% of the cabinet coming from less than 10% of the population.

And under the last lot it was even worse with Blair, Brown, Darling, D. Alexander, Reid, Falconer, Irvine, Cook, Robertson, Dewar and probably many more but I really can't be bothered. So who does Salmond think has been messing up the UK for the last 15 years?

Don't send me your bill

The world of politics seems to have been detached from reality, largely since the Blair/Mandelson era with the obviously non-existent WMD, triangulation of policies and the bare-faced misrepresentation by that government, but some might say it started before that. But recently it has got much worse.

Yesterday we had a TUC led demonstration to complain about the "cuts in government spending".  Only there have been no cuts in spending.  Spending and borrowing is higher than ever, although possibly smaller as a proportion of GDP.  But nobody gets paid in proportions of GDP.  They get paid in pounds, and the number of pounds being spent goes up ever year.  What the unions are complaining about is that some public sector jobs have been disappearing.  Why? To pay for the pay increases that their colleagues have been getting, which have been rising faster than inflation and faster than the rise in government spending.  But how can that be if government pa is frozen?  Simple.  Pay isn't frozen.  It is pay scales that are frozen, but public sector pay has continued to grow nicely with annual increments by shifting staff up pay grades and giving promotions.

But the position of the government isn't much better. Although they talk about reducing the deficit the last thing the do is to actually cut spending. Government spending is actually growing, when what should be done is to cut spending back to the levels of the pre-Brown era.  It's easy to do.  Every penny that is spent has to be authorised.  Just sign fewer cheques. It isn't that hard to do.

But the position of the Labour Party is even more ridiculous.  They insist to the unions that they would have to make cuts but not as much as the Conservatives, which is funny for the same reason, the Conservatives are not making cuts.  But then to give themselves some credibility with the workers they engage in some economic class war. The problem they imply is all the fault of billionaires who aren't paying enough tax.

Which doesn't make any sense either.  Take all the assets of the billionaires in the country and you would come up with something like £400 billion.  Assume that was put to work and produced taxable income at a rate of say 5% - the actual amount would usually be less because they would usually invest for capital growth, but that is enough.  5% return on £400 billion gives £20 billion of taxable income.  The difference in tax take between Labour's 50% income tax rate and the Coalition's 45% tax rate is only £1 billion. 

Taking it further and assume for argument's sake that that income was taxed at 100%.  That would only produce an extra £10 billion - assuming that the all hung around to pay the tax.  Now compare that with the £150 billion deficit, the £209 billion social security bill or the £125 billion bill for the NHS and it is clear that Labour and the unions don't have any answers.

The reality for all this is that today's politicians are just kicking the problem into the long grass, so that the little kid in the photo can pay for it.

Friday, 19 October 2012

The way we are now

Sometimes the way we are governed, overseen, regulated etc leaves me in despair for the sheer illogicality of it all.  This morning we woke to reports that the FSA could have done better over RBS' acquisition of ABN.

Actually, it was a bit worse than that. The report by Parliament's Treasury Select Committee criticised the regulator for the part it played in RBS' near-collapse and subsequent £45.5bn bailout by taxpayers.

Or more precisely for the role that it didn't play, namely the FSA's failure to intervene in the "calamitous" deal - worth almost £50bn. MPs said banks needed a regulator with the self-confidence to intervene, even if it causes short-term destabilisation.

It isn't a question of self-confidence.  It is a simple matter of what the regulator should have been doing.  Before a bank goes and blows half of its Tier 1 capital it should at least have some idea of what it is buying,  which as we recall RBS did not because it was a hostile takeover.  And the regulator should have been all over the purchaser asking how the buyer knew the merged bank would be adequately capitalised (it didn't).

Instead of being wise after the event, and costing the tax payter £45 billion that it didn't want to spend, the regulator should have done its job.  At the very least the FSA should have realised why there are so few hostile takeovers in banking.  But they were too stupid.

Fast forward to this afternoon and we hear the announcement that the very same FSA has Bank of Scotland has been fined £4.2m for failing to keep accurate records of the mortgage payments of 250,000 Halifax customers.

Well fair enough you might say except that it is we the tax payer who owned Lloyds/H/BOS these days, so the regulator is effectively fining the tax payer, and the government is taking cash out of one pocket and putting it in another while the rest of the mugs in the country who don't nip off to Monaco, pay themselves through a Limited Company or do some Jimmy Car tax scheme are paying the salaries of these numpties.

But worst of all the sloppy bookkeeping dates back to 2004 when HBOS was under previous management and ownership.  So whose fault is it that this only being dealt with now and not hitting the bonuses of the BOS management of eight years ago?

The FSA of course.

A poke in the eye for the plebs

So Andrew Mitchell has gone, well not entirely, but to a quieter place.

But who replaces him but none other than the most patrician of parliamentarians, an old Etonian and a hereditary baronet, Sir George Young.

Expect many of Fleet Street's finest to point out that SGY is also a keen cyclist, but even more ironically, when his own seat in Ealing was abolished in the mid-nineties, the 6'4" toff was parachuted into one of the safest seats in leafy Hampshire, guided and sponsored by the outgoing MP Sir David Mitchell, father of the outgoing Chief Whip.

Political elite? Surely not. Ask the bloke in the picture.

Sunday, 14 October 2012

No longer tenable?

On Friday the West Midlands Police Federation said Andrew Mitchell had “no option but to resign” after a meeting with the chief whip.

Excuse me, but since when did the police force decide who should be in the government, or in this case, the chief whip of a political party?

I have no particular fondness for Mitchell although I know his former MP father, who is a nice guy and a complete plonker in equal measure, but the police are forgetting their status, which as everybody knows is plebeian, less than patrician but higher than the proles.

Mitchell is of course a total prole.

Friday, 12 October 2012

Beyond parody

There's a guy in Washington who chairs a meeting every Tuesday.  At that meeting they pick the names of several people in a far away country to be assassinated.  The committee has no jurisdiction in that foreign country, the two countries are not at war and most of the people targeted are civilians. Many other people have been killed in the process although they were not targeted.  The man running this killing operation is Barack Obama. Three years ago he won the Nobel Peace prize.

Just to show that this was not a one off, the Nobel Committee has decided to award this year's peace prize to the EU. Thorbjrn Jagland, head of the Oslo-based Nobel Committee, justified the award by stressing the EU's role in bringing France and Germany closer together, and by helping strengthen democracy in southern as well as central and eastern Europe.  So the EU gets a prize because Germany hasn't invaded anybody else.  The euro has reduced the economies of Greece, Italy, Portugal, Spain and Ireland to rubble and brought their governments under the control of the ECB/Bundesbank without a shot being fired.

And some joker in Norway thinks that is worthy of a prize.

Thursday, 11 October 2012

Just put down that application form and step away from the desk

The future was looking bright yesterday.  For once a politician was prepared to bite the bullet and deliver the bad news: the western way of life was under threat from more competitive economies in the east and western countries have to shape up and become more competitive or watch their standard of living fade away.

The current governor of the Bank of England has been quietly giving out the same analysis for several years, but not necessarily the same prescription, but tere was at least the prospect of an emerging consensus that the only thing that stops the UK from goin the same way in the next few years is the fact that its currency is not tied to the euro.

But the solution was always the same: cut government spending.

But then we get the worthless point of view from Adair Turner, Mr Executive Hair and Baron Turner of a poxy little village at the back end of nowhere.

"Debt reduction could hit growth for years", says Lord Turner.  Unfortunately,  Lord Turner is seen by some as a front-runner to be the Bank of England's new governor  He is currently the head of the FSA, and has previously had a string of tax payer funded jobs over the last thirty years preceded by a stint at McKinsey, a few years at Chase Manhatten and a few months at BP.  In other

In other words someone who is quite happy to see the government spending money it hasn't got and that our grandchildren will have to pay for, because that would keep him in a £400,000 job for the rest of his career.

What we need is a governor who will work for £100k on the condition that nobody else in government, the civil service, local government, the NHS or the BBC earns any more than him.

Do that and we might balance the budget.

Do that and we might see some real investment.

Do that and we might see some growth.

The Savile Enquiry

With pressure building on the BBC and senior staff working during the 70s and 80s to explain what they knew about Jimmy Savile sex abuse claims, a book by a top journalist reveals details of alleged paedophilia involving another children’s broadcasting star at the corporation.

In the late 1960s, the current BBC world affairs editor John Simpson was tasked with reporting the death of a former BBC children’s entertainer – given the pseudonym ‘Uncle Dick’ in his book Strange Places Questionable PeopleCalling a former co-star for reaction to his passing, Simpson was shocked to hear Uncle Dick described as an “evil bastard”:

“Week after week, children from all over the country would win competitions to visit the BBC and meet Uncle Dick. He would welcome them, show them round, give them lunch, and then take them to the Gents and interfere with them.”

Does that sound familiar?

Uncle Dick’s partner for many years — Auntie Gladys — told the BBC that she was deeply saddened by his death. She said “He had a wonderful way with children.”

“If their parents complained afterwards, she said the Director-General’s office would write and say the nation wouldn’t understand such an accusation against a much loved figure.”  Relating this discovery to his editor, Simpson was then admonished for being a “destructive young idiot”  before a full scale newsroom cover up was orchestrated. The copy written up for newsreaders read as follows:

As with the fawning tribute to Jimmy Savile broadcast after his death in 2011, BBC managers wouldn’t allow serious allegations of child abuse to tarnish the reputation of one of their stars. So far at least the BBC has been totally silent about what appears to have been a complete failure of its child protection obligations in relation to Jimmy Savile over decades.

However, since 1933 successive child protection laws and regulations have laid down strict rules on the protection of children in theatres and film and broadcasting studios. These require under-16s to be supervised and protected at all times when on such premises by suitably qualified chaperones licensed by the relevant local education authority.

Ofcom’s regulatory framework includes specific provisions for the protection of children who participate in television and radio programming through their Broadcasting Code (rules 1.28 and 1.29). The Ofcom Code sets standards for the content of television programmes and the protection of viewers from inappropriate material in the content of programmes. The rules balance the right for under 18s  to participate in programmes with the requirement that broadcasters take steps to ensure the protection of their physical and emotional well-being and their dignity. These rules are supported by guidance developed by Ofcom which covers the involvement of people under eighteen in programmes and requires that due care should be taken at the pre-production, production and post-production stages

The BBC has additional and specific guidelines relating to children in programmes. Their management structure includes a lead person on child protection in each major department. The BBC Executive is held to account by the BBC Trust and in certain aspects of content, by Ofcom. Other broadcasters have similar internal guidelines and management arrangements.

It might be argued that children who are merely sitting in public audiences during broadcasts do not need to be chaperoned, but those actually taking part in filming or live broadcasting, as in many Jimmy Savile programmes, certainly do. The regulations make this very clear. In the context of the present allegations and the case of 'Uncle Dick', they specifically refer to supervision by chaperones at all times in dressing rooms.

Which is why the BBC are making such a fuss over their own investigation.  No doubt it will come up with a result of "lessons must be learned", when the reality is that the scandal should be investigated by the police, the harmed should be compensated, the guilty should be prosecuted and the individuals responsible should be imprisoned or fined.

This is why we have lawyers

Lance Armstrong's lawyer has described Usada's report into Armstrong's drug taking as a "one-sided hatchet job". Sean Breen called it a "taxpayer-funded tabloid piece rehashing old, disproved, unreliable allegations based largely on axe-grinders, serial perjurers, coerced testimony, sweetheart deals and threat-induced stories".

Didn't say it was wrong, though, did he?

And I like the way "tax-payer funded" is now a term of abuse.

Zut alors

This just in from Paris:
Le Président de la République a reçu conjointement cet après-midi, au Palais de l'Elysée, M. Bill GATES, co-président de la fondation « Bill et Mélinda Gates », et Bono, co-fondateur de l'organisation non gouvernementale « ONE ». Le ministre délégué chargé du Développement, M. Pascal CANFIN, a participé à l'entretien.

You have to hand it to M. Hollande. He must have one hell of a sense of humour. Just days after announcing that he thought it would be perfectly reasonable to tax all French plutocrats at a marginal rate of 75%, who does he invite to the Elysée Palace?

Why none other than the former head of a US multinational that ran all its European revenue through Ireland to get a 12.5% tax rate, and an Irish popstar who thinks it is perfectly reasonable to book all of his royalty income in the Dutch Antilles where it suffers tax 5%.

As I said 2 years ago "the next time the sanctimonious U2 frontman comes calling to berate us about how little we do to help poorer countries, we can point out that while we put up a ten figure sum to help out his home country, he routes his royalties through the Netherlands to the Dutch Antilles because he finds the 5% cost of doing so preferable to the meagre 12.5% corporate tax rate he would have paid if he left them in Ireland."

Monday, 8 October 2012

Not fit for purpose

Long term readers may have gathered that I am not a fan of the BBC. This is for a number of reasons: (i) the fact that it has confessed its inbuilt bias towards leftist statism, (ii) that it can produce such consistently and universally poor output despite a budget of £5 billion a year from all sources, and (iii) that it chooses to squander such vast amounts of money on mediocrity. The third point arises from the arrogance of celebrity, and that point is made again today

A few days ago the BBC's new director general George Entwistle sent an email urging staff to "come forward" and talk to police if they have any information about alleged sexual abuses by the late presenter Sir Jimmy Savile.

Then over the weekend, Liz Kershaw who arrived at Radio 1 around the time Sir Jimmy was leaving, said: "The rumours were there, the jokes were there. It was an open secret. "Round Radio 1 everyone joked about Jimmy Savile and young girls. The main jokes were about his adventures on the Radio 1 Roadshow. It was massive then." "It was rather like the X Factor going round the country then. Can you imagine the X Factor judges rounding up the contestants and asking for sexual favours after the show? I don't think so," she added."

But then, in what seems a breathtaking bit of arrogance, the BBC says it promises a "comprehensive examination" of allegations the late Sir Jimmy Savile sexually abused girls while working for the corporation.
Director General George Entwistle said all "outstanding questions" would be addressed - but only after "police had finished everything they have to do".

Sorry, but this is like the West family examining the conduct of Fred and Rose, or the Bridger family investigating their son Mark.  Those guilty of sexual predation should be prosecuted as should those guilty of hiding the facts from the authorities.  It amazes me that the BBC think that there are facts that it might learn from such an investigation that shouldn't be handed over to the police, and even more astounding that the BBC thinks that there might be areas that it and not the police should investigate.

Still, if the BBC didn't think it was above the law, Savile would have been arrested years ago and there wouldn't be 25,000 staff members in front of and behind the camera, treated as self employed so that the BBC could skimp on their PAYE and leave more pay for their already overpaid managers.

Time to break up the whole sorry mess.

Thursday, 4 October 2012

European politicians shoot themselves in their collective feet

Finance ministers of the European Union's 27 member states are expected to discuss the increasing number of requests for a financial transaction tax when they meet in Luxembourg next Tuesday (9 October).

Last Friday (28 October), the finance ministers of France and Germany sent a joint letter to Algirdas Šemeta, the European commissioner for taxation, to request a proposal for a transaction tax under the ‘enhanced co-operation' process – which allows legislation to apply to some but not all member states, on the proviso that at least nine countries take part. Belgium and Austria this week also submitted requests and it is possible that at least nine will have joined the list by the time that the finance ministers meet.

In their letter, Wolfgang Schäuble, Germany's finance minister, and Pierre Moscovici, his French counterpart, wrote: “European integration in this matter is necessary in order to counteract distortions through measures taken nationally by member states, bearing in mind the high mobility of financial transactions and the need for the proper functioning of the internal market.” The UK, Sweden, Ireland and Luxembourg had indicated that they will not support such a tax and have said they will not participate in the enhanced co-operation.

Schäuble and Moscovici said that they wanted the “scope and objectives” of the financial transaction tax to be based on the Commission's original proposal from September 2011. That proposed imposing a tax of 0.1% on trades in shares and bonds, and a 0.01% tax on derivatives trading, with the proceeds going towards the central EU budget.

Which is good news for London, where the taxes will not apply.  We already have a stamp duty reserve tax on share trades, but not on other instruments.  if other countries want to see whatever derivatives trading they have disappear to London, Zurich and Luxembourg, then who are we to stop them?

Wednesday, 3 October 2012

One Party, One Leader, One People

That's National Socialism for you, Mr Miliband.

A party funded by, voted for and populated with people who advance the cause of industrial disruption and class antagonism can never aspire to ‘One Nation’ politics.

Monday, 1 October 2012

You haven't thought this through.

Ed Balls says he is goind to call for "urgent action" to kick-start growth, suggesting a "clear and costed plan" to use the proceeds from the forthcoming sale of 4G radio frequencies to scrap stamp duty for two years on properties worth £250,000 or less.

"With this one-off windfall from the sale of the 4G spectrum, let's cut through the dither and rhetoric and actually do something," he will say. "Not more talk, but action right now.

"Let's commit that money from the 4G sale and build over the next two years: 100,000 new homes - affordable homes to rent and to buy - creating hundreds of thousands of jobs and getting the construction industry moving again"

Well £4 billion isn't going to pay for any homes.  It works out at £40,000 per new house, which would mean they would have to be impossibly small.

Somehow this stamp duty land tax is supposed to apply to new built low cost homes.  But stamp duty isn't a tax on the sale of houses but a tax on the sale of land.  The house becomes legally part of the land by dint of its semi-permanent affixation.  So how does it get applied to new homes?  If I sell a £1,000 shed on a £245,000 plot of land, do I get a lower rate of SDLT?  And what if I renovate an old building?  How new does it have to be, or does the holiday apply to all buildings?

Not really worked out, this idea, but then neither was any Balls fiscal policiy when he was a member of the government.

He would, wouldn't he

HM Telegraph has a big splash over its front page to the effect that former minister Keith Vaz received a total of £500,000 in payments that went through his personal bank account over a period of about 5 years, in addition to his salary and the rest.

Mr Vaz denies anything improper occurred, but I refer him to the statement of  Ms Rice-Davies in the Profumo Affair.

Friday, 28 September 2012

Ce qui est à toi est à moi

Earn over a million euros in France next year or the year after, and you can expect three quarters of the excess to go to the government.

Which is why Bernard Arnault, head of luxury empire LVMH and France’s richest resident, is asking for a Belgian passport. Talk abounds of a rush of French tax exiles to friendlier havens. In the age of high-speed trains and Internet, the CFO of a French-based company can easily work from Brussels or London.

The reason for the tax hike is to give the French government political headroom to slash spending.  Not such a bad idea.

Wednesday, 26 September 2012

Who would be queen?

What a day for old age pensioners living in big houses.  First of all the BBC pick up on your conversations with the Home Secretary and splash them all over the airwaves.  Then the next thing you know, some washed up politician from a has been party masquerading under the title of Deputy Prime Minister (even though one had no say in the matter) announces that if he has his way, one would lose one's bus pass, winter fuel allowance and free TV licence.

Now I don't want to overstate the obvious, but it is clear that like most Lib Dem proposals, this hasn't been though through and would actually work.  let's give it the thought tat it lacks:

1. How many mansion dwellers have a bus pass? Probably none or as near as next to none as would make little difference

2.  If you live in a £1m mansion, and you are aged over 80, it probably costs a small fortune to heat the place, and the winter fuel allowance would be dwarved by the VAT receipts the government makes on the oil or gas fuel.

3. Cutting the free TV licence would just be churlish.  For the over-75's it makes no difference.  Strictly they need a licence which is available free of charge, but have you ever heard of an over-75 year old being prosecuted for not having a TV licence.  And would TV Licensing seriously prosecute on the basis of the valuation of somebody's assets?  Sounds doubtful  If the government wants to cut the cost of TV licenses for the over 75's they would make more money by reclaiming the cost paid to the BBC of the unexpired portion of the licenses given by the government to the over 75s when they die part way through the term of the licence.

It seems that the Lib Dems are tapping into the last remaining permissible form of discrimination, against the rich, or to put it more succinctly, envy.  We don't means test use of the NHS, roads or schools and quite right too.  Universal services and benefits mean just that.  Either we all get them, or no-one does.

Tuesday, 25 September 2012

Making up the news

World Twenty20 chiefs must re-examine giving women players a third less daily living allowance than men, England captain Charlotte Edwards has said.

.... or so run the headlines in the BBC website article here, where the England captain didn't say anything of the sort.  More's the pity for the BBC reporter who repeated the same line on Radio4 this morning.

The England Women's T20 team may be one of the best 10 women's teams in the world, but they aren't a patch on the men's team.  They get paid £60 pounds or so living costs in Sri Lanka, which is enough to live like a king or queen in Sri Lanka, but £40 less than the men.

Nobody quite frankly could give a damn, least of all the women on tour (flown out Economy compared to the men in Business), except for our intrepid BBC reporter who makes up the news as she goes along.

I'd rather be a pleb part 2

The Mitchell saga continues, and so shall I.

The most offensive thing about Mitchell calling a policeman a pleb is that he obviously lied when he denied doing so.  He is a politician. They lie. Get over it.

The second most offensive aspect is that Mitchell is giving himself airs and graces.  He is quite definitely a pleb himself, not the patrician he would have us believe.

He is an MP, and the son of an MP, albeit a largely undistinguished one, and his father was a wine merchant, which is definitely plebeian, which paid the fees for the younger Mitchell to be schooled at Rugby (a step or two up the ladder from his father's Aldenham), which is a bit grand, but a notch or two down from my own school where fewer than 1 in 10 classed as a patrician.

True enough Mitchell worked at Lazard, but in London that is a little boutique in a'60s concrete building above the escalators at Moorgate tube station, so still plebeian.

The distinction between patricians and plebeians in Ancient Rome was based purely on birth. Although modern writers often portray patricians as rich and powerful families who managed to secure power over the less-fortunate plebeian families, most historians argue that this is an over-simplification. As civil rights for plebeians increased during the middle and late Roman Republic, many plebeian families had attained wealth and power while some traditionally patrician families had fallen into poverty and obscurity.

Better to be a pleb than a prole.

Sunday, 23 September 2012

I'd rather be a pleb

.. than a prole.

The police will always be plebeian and should never be patrician.  That way lies a police state.

Saturday, 22 September 2012

The chutzpah is breathtaking

Anybody who has been involved in an election campaign against the Lib Dems will be aware of their legendary capacity to be two-faced while talking through their collective rear end, as evidenced by Clegg's apology last week, niot for going back on a pledge but for making a pledge in the first place.

What he is saying is that not only is it perfectly reasonable for a politician to go back on a firm promise to the electorate, but by implication, the voters should never trust even the most explicit promises made by politicians.

Which makes today's statement that the Conservatives should stick to the Coalition agreement and consider some sort of wealth tax and House of Lords reform is doubly disingenuous.

Not only were neither point mentioned in the Coalition agreement, but it is the Lib Dems who are flouting the agreement by refusing to honour the part of the agreement which explicitly linked the AV referendium (which we have had) with constituency boundary changes (which we haven't because of Lib Dem opposition).

The hypocrisy is stunning.

Saturday, 8 September 2012

Do as I say, not as I do

So Labour came out with their idea for the pre-distribution of wealth.  Chuck-us-ya-money, the Labour Shadow Business person explained it on the radio this morning.  The big idea is to get people earning more by restructuring the economy so that there are more high value jobs in industry.

Like duh! That is exactly what the rest of the world have been 5trying to do for the last 100 years, while Labour have been undermining industrial evolution for the sake of their vested interests.  Worse than that, from 1997 to 2010, the proportion of GDP represented by industry fell from around 22% to 11%. Under Thatcher it fell from 25% to 23% and under Major from 23 to 21%, but under Blair and Brown it really fell off a cliff (or rather it stagnated while the rest of the economy became bloated on government borrowing).

To put the causes in perspective, remember that it was the Labour government that dropped the rate of corporation tax from 30% to 28% (sounds like a good thing), but then announced that the entire measure 2would be funded by reducing the rate of writing down allowances from 25% to 20%.  So in other words, the amount of corporation tax stayed the same, and while all the advertising, PR, film and TV production companies paid a lower rate of tax, the bill for doing so was picked up by the people who spend a lot of money on plant and machinery - i.e. industry.  Which is one reason (amongst a host of similar why industry will never grow under Labour).

So why vote Labour when you can vote for the real thing

Hang on a 'mo

A couple of weeks ago, the ex-management team at Barclays 'fessed up to the NY Banking regulator and ponied up half a billion or so of shareholders' funds to settle a complaint that Barclays had misreported LI(BOR.  OK, everybody knows that misreporting LIBOR was a bad thing, and the culprits should be sacked and punished, but nobody really knows the scale of the misdemeanour, and as LIBOR was being under-reported, borrowers (who are the ones we are supposed to like, kids), wouldn't have been hit at all, although cash depositors and swaps traders might have (but we certainly don't like the latter).

But this week, we hear that RBS is negotiating to settle as well.  Now, hang about.  Who says the costs of fixing LIBOR (the LONDON interbank offered rate) is anything to do with NY regulators.  The whole idea behind the London interbank market was that it was outside US (and French, German etc) regulatory control, and there is no evidence that there has been any cost to any US person as a result.

But worse than that.  As a joint shareholder through a 90% government interest in RBS, why is my money being used to pay for the misdeeds of the bank before my taxes bailed it out.  And why is my money being paid in to the US tax coffers for an act that took place in London?

Monday, 27 August 2012

Toot toot, chuff chuff

The last time Beardy Branson had such a good whine, he was crying to his mother from police cells after being questioned in connection with the selling of records in Virgin stores that had been declared export stock. His latest tizzy is all about being outbid for the West Coast Main Line franchise. You have probably heard about it because he has been on the airwaves trying to create a fuss about the rival bid.

For the record, and because you won't hear much about this from the BBC, the rival bidder, FirstGroup, has promised to introduce better wi-fi and food, more frequent trains and more seats, and to cut standard fares by 15%. They would also introduce 11 new 125mph six-car electric trains on the Birmingham to Glasgow route and provide more direct services between destinations. Oh, and they have promised to pay £5.5 billion for the franchise. Now that is what the franchising system is all about.  More competitive bids, offering more for the franchise and creating better services.

But Branson's argument is that they can't deliver. Not so, all the targets are perfectly deliverable.  The only issue is whether they make any money at it,, and that is the risk of the bidder.  Well, what if they don't perform? Well if the franchising contract is drafted correctly then the entire First Group can be held liable.  First Group may have smaller annual revenues (£6 billion or so) than Virgin (£15 billion give or thereabouts), but their embedded infrastructure (train and bus franchises) is a lot less volatile than the video games, jewelry, houseware and holidays that form an increasing part of the Virgin business.

And if anybody has to make a judgement call on that, well it is the rail regulator, or to give it its full name The Office of Rail Regulation, the independent safety and economic regulator for Britain's railways.  Which makes it all the more laughable that Angela Eagles and the Labour Party should be joining the Branson bandwagon, looking for an "independent" review of the the decision.  The ORR is independent, and ultimately answerable to parliament.  Some parliamentary ego-maniacs just never know when to stop.

Saturday, 18 August 2012

Living in the real world

Some people really just don't get it. Such as the BBC and the Labour Party.

 How can unemployment be decreasing (and employment increasing) when GDP is falling? Simple really. Everybody who is in work is being paid a lower aggregate amount (hence the 0.7% fall in GDP). The trouble is that working for less than you did before, or as we old fuddy duddies like to call it, "matching wages to the real value of labour as determined by market forces, is an experience well understood and experienced in the private sector, but virtually unheard of in the NHS, the BBC or the rest of the public sector.

A dear friend, who I knew for many years as a top corporate finance banker, but who left the City ten years ago to work as a consultant, tells me that he has found a new job. I say job, but in reality it is nothing more than a casual labourer contracted by the day for peanuts, paying far less than he earned as a basic wage in the 1980's.

 That is the reality of the private sector today. Remember all the talk of the benefits of globalisation? Real enough if you were a plutocrat staying aloof from all that, but in the real world, wages were forced down., At foirst private sector wages, and now it is time for the public sector to feel the pain.

I 'd like to teach the world to sing in perfect harmony

EU foreign policy chief Catherine Ashton says the jail terms for the Pussy Rioteers questioned Moscow's respect for the "obligations of fair, transparent and independent legal process".

German Chancellor Angela Merkel said the ruling was “not in harmony with the values of European law and democracy.”

True enough, but although the Russian President rules by fear and intimidation and his government is known to have ties to the Russian mafia (the FSB pay them to make arms shipments), it has to be said that  Vladimir Putin was elected into office, unlike Mrs Ashton.

Although the non-election of EU spokesmen and even European heads of state as in Italy and Greece seems currently to be very much "in harmony with the values of European law and democracy.”

Friday, 17 August 2012


My wife's cousin's eldest son (not sure what relationship that makes us) posted on Facebook that he is taking his girlfriend to see The Dark Night Rises tonight.  They haven't been dating very long and he reckons that this is the ninth time they will have been out together.

So far it has been dinner, dinner, dinner, dinner, dinner, dinner, dinner, dinner, Batman.

Thursday, 16 August 2012

Faceplant continues

The fantasy business that is Facebook continued the decline in its share price.

Keen readers may recall that I tipped the price of the share to decline exponentially when it was launched in May.  It seems to have a half life of about three months, because today the prohibition on sales by its major holders at the time of the float was lifted and the shares fell 6% putting them at $19.88, less than half the value just after flotation.

Still not to worry, because the Facebook website will be airing reality TV programs. Well, I'm no media expert, but what I do know is that if a website is putting out TV programs that are available on free to air YV at the same time  don't expect the web business to make out like gang busters.

This one is going all the way to zero.

Olympic Legacy: a suggestion

I am not a great fan of TV.  That may be because I don't watch it very much.  That may be linked to the fact that I don't have a TV, which in turn explains why I don't have a TV license, which in turn is explained every time I peruse the TV listings that show nothing of interest to watch.

But that could change if the BBC actually decided to put on something of interest that didn't involve either (a) putting the same dozen comedians in front of a camera "ad-libbing" pre-scripted jokes and calling it entertainment or a quiz show or (b) using the same tired old formats derived from Antiques Roadshow featuring either chattels or immovable property.

The latter form of mental torture features heavily on BBC 1 on Saturday afternoons. This week we have:

12:10 – 13:10 Homes Under the Hammer
Martin Roberts and Lucy Alexander visit properties in Cheshire, Kent and Derby. (R)

13:10 – 14:10 Bargain Hunt
31/32 Four experts make up the red and blue teams shopping for bargains. (R)

14:10 – 14:40 Cash in the Attic
A mother and son invite Jennie Bond and expert Jonty Hearnden into their home. (R)

14:40 – 15:40 Escape to the Country
Alistair Appleton seeks a Hampshire home for a couple who spend half the year in America. (R)

Nearly 4 hours of tawdry asset gawping, and not only that, but the programmes are all repeats, so that the UK TV viewer can decide whether they are still as enthralled as the last time they watched this tat.

And hats off to the BBC, recipients of £10 million a day in licence fees, who will have managed to have satisfied about £1-2 million of their prime-time weekend obligations on the major TV channel by simply switching on the video playback machine and going on a 4-hour tea break.

But it doesn't have to be that way.  There could be a sports programme lasting for 4 hours, perhaps extending into the football scores, covering all the minor sports that feature in the Olympics and more besides. Not just athletics and swimming, but boxing, judo and taekwondo, cycling and rowing, sailing and canoeing, the odd bit of horsey stuff (even dressage), archery, shooting and modern pentathlon, and in the winter skiing, bobsleigh and the rest.  None of it difficult to cover, just a few cameras and a knowledgeable presenter/commentator.

I even have a name: Grandstand.

Churls just wanna have fun

I was struck by a piece in HM Telegraph this morning about the turnover of senior civil servants:

There must be something rotten in the Coalition, when so many of our top civil servants are on a veritable stampede for the exit. Right across government the mandarins are shaking the dust of Whitehall from their feet and moving on to bigger, better jobs elsewhere. They include senior officials at Education, the Cabinet Office, the Ministry of Justice, International Development, Energy, and the Home Office. Surely they can’t all be leaving because they are brassed off with David Cameron’s Government?

“No,” said one insider. “Not all of them.” The emphasis was telling. Some undoubtedly feel that Mr Cameron’s Whitehall no longer offers them a rosy future. Cuts and more cuts stretch ahead; staff are demoralised. Ministers with unrealistic political timetables display growing impatience.

“Being a perm sec isn’t fun any more,” was one comment.

Fun? Fun!?!? Fun??!?!?!?  Did somebody say it wasn't "fun" to be a civil servant? 
Listen buddy, we don't pay you to have "fun".  If you really think that the vastly overpaid (in my book anyone earning more than the prime mininister or 7 times average earnings without actually taking any "business risk" is by definition overpaid) senior civil servants in this country have job descriptions that contain the word "fun", then you must be living in cloud cuckoo land,  err... make that Disneyland.  

It was the public sector that grew under the last government, that spent £700 billion a year while collecting only £530 billion in taxes.  It was the public sector that has burdened the tax payer with ridiculously expensive PFI schemes in order to overcome departmental accounting and budgeting issues rather than considering the broader national interest. It was the public sector that managed to double health spending with very little extra output, just letting the extra money flow through to the highest paid clinicians in Europe. It was public sector departments that wasted money by spending their full budgets when economies could have been made, out of fear that economies would lead to lower future budgets, and loss of status or power.  

And now they complain that they aren't having fun any more.

Tuesday, 14 August 2012

Kazakhstan residents are happy to victories of local athletes

The Kazakhs were definitely "in it to win it" at the Olympics.  Out of eight Kazakh medals, seven were gold and the eighth was silver, but only just judging by this report from Caspio.net:

On the last day of the London Olympics Kazakhstan residents watched fights of Kazakhstan boxers online. The Mangistau region residents supported all boxers but they paid particular attention to their fellow countryman Adilbek Niyazymbetov. In the final fight Adilbek Niyazymbetov fought with Yegor Mekhontsev.

Adilbek showed all his best in this fight. The fight was head-to-head and finished in a draw. However, additional factors made the judges award victory to the Russian athlete. The honoured boxing coach of Kazakhstan Alexander Drach believes that Kazakhstan athlete lacked a stroke of luck.

Alexander Drach, Honoured Boxing Coach of Kazakhstan said «He is a very talented athlete; it’s a gift from god. At the same time he is a very modest guy and it was very pleasant to work with him. It was a truly spectacular fight and Adilbek should have been a little more active. The Russian athletes showed more attacks. Adilbek can work with such boxers and he should just be a bit more active.»

Sabit Niyazymbetov watched his son’s match with particular attention. Father is proud of his son and thinks that a silver medal is still a victory. Sabit Niyazymbetov, Father of Adilbek Niyazymbetov said «I am very happy for my son. His silver medal is like gold medal for me. I would have been happy even if he gained bronze. I would like to thank all Kazakhstan residents and residents of the Mangistau region for all their support for my son.»

Aktau fans of Adilbek are happy with his success in London. They believe that he will achieve a lot, since the Mangistau boxer is very promising sportsman.

Saturday, 11 August 2012

Congratulations to Ed McKeever

Probably the only part qualified accountant to win a gold medal at London 2012.

Mens 200m kayak, since you ask.

Thursday, 9 August 2012

Standard outburst in uncharted waters

So a US regulator in NY that you have probably never heard of is kicking up a fuss about Iranians, or rather about Standard Chartered, the London-based but Asian-focussed bank that operates in Iran.  Now Iran isn't everybody's favourite nation, particularly Israel (which views Iran as the root of most if not all evil), and the United States (which for the last 33 years has waged an economic war on the state with a comprehensive range of economic sanctions).  The US rules pretty much prohibit US citizens and corporations from doing any business with Iran, with limited humanitarian exceptions (medicines and the like).

But the rest of the world doesn't quite see it the same way.  The EU is quite happy to permit business relations with Iran.  The French designed and managed the construction of the Imam Khomenei International Airport.  The Germans sell them machine tools, as do the Japanese and both countries sell their cars.  The Chinese buy Iranian oil, but they also built the Tehran subway.  Australia sells them wheat, New Zealand sells them lamb and Argentina sells them soya.  Meanwhile Iran sells the rest of the world its oil, Persian carpets and .. pistachios.  Chances are the next bag of pistachios you buy in the shops (assuming you are not reading this in the US) will be contributing to the Rafsanjani family fortune.

All of these goods and services have to be paid for, and in all likelihood the non-Iranian buyer or seller will want to pay or be paid in dollars. And that is where it gets tricky, because in theory all dollar denominated payments (unless they are between accounts at the same bank) would have to be made through the correspondent banking system in New York.

For those who don't know what correspondent banking is, instead of the tens of thousands of banks in the world maintaining accounts with each other on the off chance that the Third National Bank of Kurdistan should want to send $25,000 to Banco Comercial de Patagonia, smaller and even quite large banks keep accounts at a few large money centre banks and use those banks (correspondent banks) to operate payments to other coresspondent banks in the same country/city who forward the payment to the account of the recipient or his bank.  Which means that if anybody is sending dollar payments to or from Iran, they are likely to go through New York at some point, at which point the US authorities might get a bit touchy.

Now arguably, nobody in the US is doing any business with Iran, simply with the people who are moving money to or from Iran, but that doesn't seem to cut much ice with Benjamin Lawsky, the Superintendent of Financial Services in New York.  Mr Lawsky, who as you might expect from his name is a Friend of Israel, who thinks that such business transactions are just plain evil.  "How much of this $285 billion has been used to fund terrorism?", he asks. 

At a rough guess, I would say pretty much none of it. Terrorism doesn't require much funding, Mr Lawsky.  Just ask your fellow citizens at Noraid.  And most terrorist funding in Iran comes not from the government, but from the Islamic foundations ("bonyads") that own vast swathes of the Iranian economy.  They don't need to send money to Hizbollah in dollars because I doubt Hizbollah has a checking account with Citi on 5th Avenue in NY.  Wherever their terror cells are located, chances are the local currency will be dirhams, riyals, pounds or euros, not dollars, so no need to trouble Uncle Sam's end of the SWIFT network.

Meanwhile, Mr Lawsky's accusations may be rebounding on him.  There have been reports that the censuring of Standard Chartered on Monday by the New York state regulator surprised not only the bank’s executives but also stunned officials at the federal agencies investigating the bank, the Treasury and Justice Departments and the Federal Reserve. Some of the Treasury officials had reportedly concluded that while Standard Chartered’s handling of Iranian transactions might have been questionable, they were not necessarily illegal.  The trading with Iran occurred with non-US entities, which is why Mr Lawsky accusations have nothing to do with OFAC regulations, but the catch all charge of money laundering and false accounting.  Whether or not these apply will depend on the facts, but since the money seems to have got through to the right place, it sounds as though any mention of an Iranian bank would have been superfluous, and the fact that a particular transfer was connected to Iranian business but that the Iranian business was not actually involved in a particular leg of a transaction suggests that the transactions were perfectly compliant under the law as it existed at the time.

And if SCB want to structure dollar payments so they don't pass through the US, it is so easy to avoid doing so:  If Iranian client with $100 million on deposit at SCB wants to make a $100 million payments they buy $100 million of euros from SCB, and send that amount to the account of the intended recipient at their bank.  The payment is cleared through the euro clearing system outside the US.  Simultaneously SCB and the other bank enter into a $/€ FX deal for $100 million face value at the same rate and the other bank does the same with the end client.  Net result, Iran moves $100 million to client, and the US is none the wiser because all they see is an FX deal between 2 non-US banks.

Saturday, 28 July 2012

Good on yer ma'am

After the trickery and fakery of the Beijing opening ceremony it was good to see some honest to goodness enterprise by Danny Boyle and his team.

I note however the churlishness of the Chinese media, who suggest that the Queen may not have performed all her own stunts.

Tuesday, 17 July 2012

You couldn't make it up #94

The Scottish government failed to meet its climate change targets in 2010, according the latest official figures. They showed greenhouse gas emissions rose by 1.9% on 2009 figures, after taking emissions trading into account.

The government is attempting to reduce greenhouse gas emissions by 42% by 2020. Scottish Energy Minister Mr Stevenson said "Scotland faced its coldest winter temperatures in almost a century - and quite rightly people across Scotland needed to heat their homes to keep warm and safe".