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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".

Sunday, 15 July 2012

What is the point of Andy Burnham?

Answer:  to point out all the good things that the government is doing to the NHS.

If you think that the NHS is some sort of sacred cow into which endless amounts of tax payer's cash can be shovelled, then you might buy his line.

If on the other hand you think that it is a bureaucratic muddle, employing some of the most overpaid clinical staff in Europe, then his interventions are to be welcomed.  Ah, some might say, but the UK spends about 8% of GDP on the NHS which is about the same as the rest of the world and less than the US.  Not quite, that figure for health spending doesn't include the amount for private healthcare including dentistry, which is what you would need to put us on a direct comparison with the US, so make that figure about 9.5%, and then bear in mind that the GDP denominator is flattered by over £120 billion of deficit spending.  Cut the GDP numbers to a more sustainable figure based on say £35 billion of net borrowing (call that a drop in GDP of £100 billion), then you can factor up that 9.5% of GDP figure up by about 7%, so let's say that in the real world without la-la land deficit spending UK healthcare costs would be about 10.5% of GDP, which is a lot.

The trouble is that while the private sector has been suffering from competition from India and China for years, the public sector has generally lavished itself with great riches at the expense of our grandchildren.  Look at your neighbours and note how, apart from any hedge fund managers, if anybody over the age of 45 is taking home a large wodge of cash these days, they probably work in the public sector.

So the good news is that thousands of doctors and nurses may be sacked unless they agree to drastic changes to their pay and conditions as hospitals strive to make billions of pounds worth of savings, it has been claimed. NHS bosses have suggested terminating all staff contracts and reoffering them on different terms, according to a leaked document obtained by The Sunday Times.

New terms could include pay cuts of up to 5%, an end to overtime for nights, weekends and bank holidays, and reduced holiday leave, the newspaper said. These measures could affect up to 60,000 health professionals in the South West of England, where chief executives have acknowledged they would need to act "in unison", the paper reports.

The document was prepared by 19 NHS bosses to maintain patient services in the face of multimillion-pound budget cuts, The Sunday Times adds. The paper claims at least two other hospitals in Surrey and Manchester have considered the plans, but health chiefs in the South West suggest working together in order to prevent being "singled out" and unable to take on the unions. They believe that by co-operating they will be able to overcome an "extremely hostile" reaction to the steps, especially if they take the "last resort" of sacking all staff and re-engaging them on less favourable terms, The Sunday Times says.

And if you don't think some nurses are overpaid, find out the facts. The average nurse probably isn't, but in many trusts, once a nurse has specialist qualifications, they are straight out of the door and into agency from whence they are hired back to the same hospital at two and a half times the cost.

Saturday, 14 July 2012

I''ll have one from Group A and one from Group B

I have a theory.  After the end of the second world war, and more so after the collapse of the Berlin Wall, it became clear that in the more prosperous half of the world, there were going to be few career prospects for the aspiring autocrat.  Whereas many states still had capital punishment in the first half of the twentieth century, the practice was clearly on the way out, and there was clearly a trend where an educated middle class would resist the more oppressive measures from their political masters.

So what was the aspirng Robespierre, Pol Pot or Stalin do?  Quite obviously they all went into sports administration. You get the same sense of power fuelled by proto-Nationalist fervour without the messy genocide. Plus as Joao Havelange has demonstrated there are great opportunities for personal enrichment, largely outside the contraints of national laws.

Bernie Ecclestone once said “No driver, no person, will ever be bigger than Formula One itself.”, but as he could have pointed it out, by making the sport as big as possible and bigger than it needs to, they massage their own egos.  How much money do you really need to spend on a glorified school Sports Day? At £9 billion for competitions featuring 10,000 athletes, that works out at £900,000 per competitor, a lot for Usain Bolt to put in an appearance, let alone those athletes, no disrespect, we had never heard about from Kiribati and Guam.

Which is why we will be having apparatchiks-only lanes across the streets of London later this month (I may go for a bike ride).  Or for to further antagonise the little people while pampering the unelected few, there are legal restrictions on the use of references to the Olympics

Use of two words in Group A, or one word in Group A and one in Group B, could see you falling foul of Olympics sponsorship rules:
Group A
  • Games
  • Two Thousand and Twelve
  • 2012
  • Twenty-Twelve
Group B
  • London
  • Medals
  • Sponsors
  • Summer
  • Gold
  • Silver
  • Bronze
I greatly resent this, which is supposedly done to protect the interests of sponsors who have paid for the privilege of having their names plastered all over the proceedings.

Unfortunately there will be no banners bearing the names of the biggest sponsor: the UK Tax Payer.

Friday, 13 July 2012

I am going to the Olympics

Not as a participant, but as a spectator.  I wouldn't normally waste any money on a glorified sports day - who really cares about the trap shoot, taekwondo or women's archery, apart from their mums of course - but a kind soul has given me tickets to the tennis, so I shall be going along , but I shall resolve to do as much as I can to disrupt the ludicrous security arrangements.

First of all I will be smuggling in 101 ml of liquid, although I will be having a second go at the rules on liquids by taking in a bottle of frozen water inside a polystyrene container.  Some dry ice should ensure that the contents of the bottle stay below freezing.

If that is foiled, then I shall be having a go at the rule that says you are not allowed to bring in "flags of countries not participating in the Games (this excludes the flags of nations under the umbrella of a participating country such as England, Scotland and Wales)".

OK, so which of the following are not coming to London 2012: Equatorial Guinea, Netherlands Antilles, Mauritania, Kiribati, São Tomé and Príncipe, Timor-Leste, Vatican City?

If I mosey up armed with my Dorling Kindersley World Flags Ultimate Sticker Book, are they really going to strip out the offending items?

Tuesday, 10 July 2012

Did I miss something?

"Barclays has a tendency continually to seek advantage from complex structures or favourable regulatory interpretations".

So say the FSA. But excuse me, what exactly is wrong.  Only a few months ago the City was lauded for its ingenuity and creativity.  Now I would be the first to criticise Barclays for its aggressive tax planning for itself and its clients, and I have mentioned some of its inconsistent accounting practices. 

These things can be taken too far - witness Enron and a whole host of other examples - but there is good and bad complexity.  Some "good examples" are the many flavours of leveraged financing and leveraged leasing, and another is project finance, both of which lead to enormous volumes of paperwork, but seem to work and have worked for years.  But they have their own bastard children the collateralised asset pool and PFI/PPP.  The difference is that it takes a good banker or a good regulator to understand the difference, and the FSA clearly does not.

Monday, 9 July 2012

Compare and contrast

BMW is to invest £250m in its UK factories over the next three years, the company has announced.

The money will be used to increase production of the Mini at its factories in Oxford, Birmingham and Swindon.

 It comes on top of a £500m investment which was announced by BMW last June. More than 5,000 British workers are involved in the production of the Mini.

Which is nice, and a whole lot more effective than this:

Bad bank ban beggars belief

The British Bankers' Association has said it will ban any member deliberately misquoting lending rates at daily money-market operations amid concern that some contributors are providing misleading quotes.

Or at least, that was what they said 4 years ago.

Cliche of the year/decade/century?

Googling the phrase "crashes out of Wimbledon" gives 1,670,000 results.

I haven't read them all, but looking at today's papers, it feels that way.

Sunday, 8 July 2012

Public good, private bad

... or so you would think if you read a report in the Guardian on Friday, also carried by the Bolshevik Broadcasting Corporation.

The gist of the story is that pupils at England's secondary schools are just half as likely to score highly on international maths tests than those in the average developed country, according to a report from the Sutton Trust. Just 1.7% of England's pupils achieved the top proficiency level in maths (level 6), compared to an average of 3.1% for countries within the Organisation for Economic Cooperation and Development (OCED).

The study also shows that almost all of the English pupils achieving the highest marks are from independent and grammar schools, with "almost no pupils" achieving top levels from non-selective state schools.

But it gets worse when England's 1.7% is compared with areas in South East Asia. 26.6% of their peers in Shanghai municipality achieved a level 6, 15.6% in Singapore and 11.3% in Chinese Taipei.

Well we can probably dismiss the Shanghai figure as being highly selective and because the school system is specifically geared towards these tests, but well done nevertheless, but do we really do so badly compared to Singapore or Hong Kong?

Well parts of the English education system don't.  The private and grammar schools actually make up 10% of the school population, so if the 1.7% success rate is almost entirely in the these schools, then this works out at a very respectable pass rate of 17%, higher than Singapore or Taiwan.

It is the rest of the educational system, stifled by bureaucracy and egalitarian ideology that lets down their brightest pupils. And don't try to tell me that independent schools somehow undermine the state system.  they don't.  With fewer pupils to teach in the state system there are more resources to go around.. And they don't cream off all the best teachers, and even if they did, having a teacher from only the second decile and below shouldn't penalise the brightest children.  No, in order to have "almost no pupils" from the state system achieving the top grades tells you that it is the system that is messed up.

Nice story

In a world where sport, money and professionalism seem increasingly tawdry, there was a wonderful story yesterday, when two professionals from the bottom rung of the professional ladder pulled off one of the all time great smash and grabs of world tennis. Jonny Marray and Freddy Nielsen, who spent the last few years on the Challenger circuit and look like they are the sort of players that have to buy their own shirts (the plain cotton T-Shirt not the woven V-neck collar style), walked away with the equivalent of Frank Lampard and John Terry's combined weekly wages by playing the sort of manic serve-and-volley crowd-the-net doubles normally seen on a municipal tennis court. And very enjoyable it was too.

Wednesday, 4 July 2012

What a fool believes

During Commons questions to the Communities and Local Government Ministers the Shadow Housing Minister Jack Dromey said: "Under Labour, homlessness fell by 70%." There are many different definitions used, but the generally accepted one is of statutory homelessness. Those are households placed in temporary accommodation by local authorities who have accepted them as homeless under the 1996 Housing Act. In the second quarter of 1997 there were 43,720 such households. In the second quarter of 2010 there were 50,400 such households. I make that a 15.33% increase. Last month Dromey wrote a long letter to the UK Statistics Authority claiming that figures released by the Government were misleading. Among the queries from Mr Dromey was whether the number of social homes for rent hand fallen by 40,000 or 200,000 during Labour's term of office. Neither, came the reply, it was 421,000. The reply says: "There is a statistical series for the annual additions to this stock (which is quoted in Mr. Dromey’s letter) but these figures do not take account of losses, which would be much more difficult to record. Official estimates of net change are available for social rented dwellings, but not for the wider stock of ‘affordable’ housing beyond this category. They show an overall reduction of 421,000 in the stock of homes rented from local authorities and housing associations over the period 1997 to 2010."

Tuesday, 3 July 2012

Brazilian military muscle

Watch the windows in the Supreme Court building....

Cut Diamond

Last week he said he wasn't going to resign.

Last night he said that if he was attacked by MPs on Wednesday he would come out fighting and tell all about his discussions with Paul Tucker of the BoE.

This morning he was gone, presumably to spend more time with his money.

So what happened Cap'n Bob?  Sorry, that was someone else.

Sounds like it wasn't such a good idea to threaten the Bank of England, not when they are your regulator.  And to talk about discussions with Paul Tucker, listing how and when LIBOR numbers were misreported downwards, would open himself up to prosecution with the SFO and CPS due to report next month.  And it would look worse still when all the other manipulations going back as far as 2004 were considered, where the manipuilation was upward not down, and were not discussed with the BoE.

Much easier to lie low now, take a back seat and fend off a few tricky questions with "I don't know. I don't have access to the files.because I don't work there any more".

Still to give Diamond some credit. He says he is being hounded out of office by MPs.  Maybe or maybe not, but when was the last time an MP resigned because of their culpability in some scandal.

Sunday, 1 July 2012

Systemic manipulation

According to papers released by the US department of Justice, Barclays  admitted that it submitted low values for its LIBOR reporting between 2007 and May 2009 because it wanted to con investors and depositors of its financial strength.  It believed other banks were doing the same. 
It also admitted that its traders improperly influenced the rate submissions from 2005 to 2008 to make money on derivatives.

The statement of facts released by the US Department of Justice says that a senior Barclays official and a senior central bank official talked on October 29 2008 and the Bank of England official asked why Barclays’& LIBOR submissions were higher than those of other banks.

Although the individuals are not identified in the documents, it seams they were Bob Diamond and Paul Tucker, head of the Bank of England's financial stability unit.
Lo and behold, after the call, the problem was fixed, but Mr Diamond claims he knew nothing about any misreporting.

"I am not a tax avoider" says Tony Blair:

"We spend a fortune every year on lawyers and accountants in order to make sure everything is completely [compliant with the law]."

Umm no.  That is what tax avoiders do.  Tax evaders do a runner to Switzerland.  Tax avoiders go in for schemes or pay lawyers and accountants a fortune to assemble the necessary smoke and mirrors needed for tax avoidance.  The rest of us just pay the tax.