Friday, September 26, 2008

Easy money

Speaking of lovely people running friendly banks.... The Bradford and Bingley is currently putting out an ad fronted by the hottie on the right, where a Dad is swaying contentedly in his garden hammock while two little girls play happily around him. The slogan: Rest Assured with the B & B.

Not if he's seen the share price, he won't. At 18.5p as I write, it's down 20% again today and languishing from a high a year ago of about £3. All due to management gambling on the housing bubble never bursting, of course. If he took the trouble to think about this - and maybe conclude that the bank will survive against the odds - he'd be better off buying the shares and punting on a recovery rather than leaving his cash gathering dust in one of their accounts. Not that he'd relax much if he did. It's about as safe as a Chinese milkshake. Nevertheless, I've invested. Gulp.

Tuesday, September 23, 2008

New Improved Labour

Ah, the Halifax in its heyday. When Howard was cheerfully asking us to pop our nest-eggs into his branch to be looked after by his chums, we could relax safe in the knowledge that a nice bloke like him would be careful where he put them. His was the face of a warm cuddly bank made up of solid Northerners - people who invested our savings wisely then went to bed early with a cup of cocoa. How could we have known what was really happening?

Now that the cat's out of the bag, now that we know that it wasn't Howard at all who was looking after our pennies, that it was nasty Southerners in red braces all along, buying up toxic mortgages owed by web-fingered dirt-poor banjo-twangers in Arkansas to make a fast buck - well! It's just not the same. It's no good simply telling us our money is safe - there's no pleasure in it any more. Our illusions are shattered. We don't just want products... we don't want to look at the nuts and bolts, we want them to make us feel good about ourselves. When we buy something, we buy its image, its vibe, its identity, its brand.

Something poor old Gordon knows only too well, or should. I saw some of his speech today... he did his best, some have said it was a great speech, others disagree. It doesn't matter though, because his brand is shot. We've been given a peek into the back office, seen what's really going on, and found that Prudence doesn't work there any more.

Politics, unfortunately, doesn't permit putting up a complete fake in place of the CEO.
The carefully-honed persona of the honest dour Son of the Manse - willing to sit at his desk all night looking for new, safer and better ways to make us wealthier and at the same time more sensitive to the needs of others - can't be separated from the man we see as the boss. As the real man stepped forward, the image evaporated, exposed as a marketing myth.

Even the Halifax had to find its new Howard. It knew the public needed something else to believe in even before the current crisis of confidence happened. Next, it will seek to move away completely from anything that reminds people of its previous incarnation - not an explanation, not an apology, a complete change to restore confidence. Labour needs to do the same.

Thursday, September 18, 2008

Only the Lonely

"...what gets me is, where were his critics five years ago, when everything was boom, and the country went schizo with an official inflation rate of 2% while the housing market registered up to 20%? Still, all I saw was beaming all means, get rid of Brown, but who are you going to replace him with?!"
Selena Dreamy

I know what you mean, Dreamy. Everybody was slapping him on the back in the good times, when he was like a drunk buying all the rounds at a bar. They turn on him when his pockets are empty and now he's friendless, bitter and wondering where the next unkind cut is coming from.

They turned on Blair, too, the man who gave them their three terms in a job that half of them could never have dreamed of.

But (see post below) everybody knew there was no real growth - that it was founded on unsustainable consumer credit. And interest rates were down because of the Fed's lead, and inflation low thanks to Chinese imports. The epitome of Brown's hubris ("no more boom and bust") has come back to haunt him as it was always bound to. And he, too, must have known the truth unless he's a complete fool... but while ever the illusion of pumping up public spending and raising living standards on borrowed money could be kept going, the old fraud couldn't give up the high that came with the plaudits.

I don't want to sound tooooo sanguine.. after all, I called the top of the housing market too early myself - thinking it would fall back due to overpricing/affordability rather than implode on credit running out and banks going bust. Maybe if that had happened, he'd have got away with it.

Who'll replace him? These are small people. They probably all think they could do the job. Whether any of them will want it, once they look down the barrel of defeat and semi-permanent opposition, is another matter. Having their name, albeit briefly, on the list of British Prime Ministers, though, might be a tempter they can't resist.

Tuesday, September 16, 2008

Should I go or should I stay?

Whilst it's sometimes possible to believe that the Labour Cabinet isn't a particularly bright bunch, is it a genuine prospect that one of them would really be reckless enough to oust Brown and stand in his place? Given that whoever replaces him is going to lose the next election - and then face a likely two-term Cameron government - surely none of them will put their neck on the line, will they?

But Brown is looking increasingly unhinged as he faces unceasing criticism from all sides, as well as behind his back, and waking up with that pressure each day can't be a pleasant or healthy prospect. As an outside bet, I'd have a chancy tenner on him losing it altogether, going for the doomsday option, saying, 'bollocks to the lot of them', and calling an election before the year's out.

Sunday, September 14, 2008

It's ever so easy...

  • Britain is running a Trade Deficit
  • The Government is running a Budget Deficit
  • The Banks are lending money that doesn't exist
We're bust:

Who cares? Spending = growth, according to those who know about these things.. those doing the talking, anyway. Well I'm doing my bit. I sold a house at a nice profit and am happily blowing the proceeds as fast as I can. It will take the bloke who bought it the next 30 years of his working life to pay off what 's keeping me in shandies in the here-and-now.. but that's economics for you.

The level of personal debt in the UK is at a record high at about £1.5 trillion - with average income earners on £25K spending £3900 on interest payments. And has this money that's been sucked out of disposable income and into the banks meant lower sales in the shops? Course not... they lent it back to the suckers on credit cards so that 'growth' could carry on regardless.

Nobody can fathom it. There are about 100 houses in this village. Say they were worth £5m ten years ago, in total. And say they're worth £20m now. Where has the extra come from? Is everybody 4 times as well off? Nope. If everyone here tried to realise the asset value of their home, it would be like a run on a bank. Yet we've had banks falling over themselves to lend on this notional sum. Where did they get the money from? There's more cash in the system than can be accounted for by wealth generated from earnings.

Oh dear, it's all unravelling... Well, there are two ways the country can go.

1> Print more money. Pretend nothing is happening (HM Govt.'s preferred option).

2> Cut consumption until it falls somewhere close to earnings, and get the country working harder.

What a coincidence. Option 2 is exactly what the lazy bloated lardarses that so symbolise the Britain of 2008 need to do, and so spectacularly fail at, blaming everything except binge-consuming for their over-inflated girths. Just like them, the flabby British economy will either burst or die if it doesn't find some self-control over its inputs and outputs.

It's unsustainable. There's going to be a reckoning. Unemployment and/or inflation is going to rocket and services will collapse until they hit a value floor. I can't see the government having the guts stomach courage to do the necessary to control it, so the market itself will have to sort things out by forcibly applying the gastric bypass. Nurse! The screens! This is going to be messy!

Wednesday, September 10, 2008

Shine damn you.. Shine.

My dahlias don't seem to agree with Michael 'What Hurricane?' Fish's assertion that we're having a typical summer. With the show looming this weekend, all I've got is a damp and bedraggled plot with just a few showy heads but barely enough to make a vase of matching blooms. I'd say we're at least a couple of weeks behind schedule and need a week's worth of sunshine in the next three days to get back on track.

There's always next year. But damn it.. I said that last year. Global Warming? Somebody tell Lincolnshire!

Monday, September 08, 2008

Over there, over here.

".... our willingness to believe in ourselves and to believe in our capacity to perform great deeds, to believe that together with God's help we can and will resolve the problems which now confront us. And after all, why shouldn't we believe that? We are Americans."
Ronald Reagan.

It's impossible to imagine those words spoken by a British statesman, with the word "Americans" swapped for "British". And I'd be willing to bet that the two most frequently used words in this year's Presidential Candidates' speeches were, "America" and "Americans" and that they occur many times more often than "Britain" and "British" fall from our own leaders' lips.

America, as pure concept, exists in the minds of its citizens in a way that we can barely fathom. The notion of a society dedicated to Life, Liberty and the Pursuit of Happiness is embedded in their consciousness so indelibly that it can be invoked any time and guaranteed to resonate with any audience. To the Right, it signifies self-reliance, independence, opportunity - the Left emphasises the use of the nation's strength to provide prosperity and safety for all. When things go wrong, each will accuse the other of betraying the concept - never suggesting that the concept itself is flawed.

Indeed, there can never have been a time when the opposing tickets have included such conflicting yet representative archetypes of the dream as now - with Palin and Obama standing at each end of the spectrum yet equal in their ability to appeal to deep yearnings in the minds of their constituencies. It's like watching Dolly Parton and Bob Dylan in a run-off for the best vocalist - there's no possibility of one set of fans voting for the other's favourite.

Nor can we over here share in the dynamics of the contest without being somewhat aghast at its level of polarisation. We're almost forced into support for Obama on the grounds that he's the nearest thing to what we're used to seeing as a politician here - someone who's trodden the familiar path from activism to party prominence. But I cannot think of any scenario for a Sarah Palin to emerge, fully formed as right-wing pinup complete with lifestyle, family accoutrements and political background. It's not just that there's no British equivalent of her - neither is there any stereotype I can think of, who could be summoned up from anywhere in the Shires or suburbs, who could similarly embody our own sense of nationhood and destiny.

Because, unfortunately, we no longer possess one. We have no ideals left to which we can be asked to aspire to on an inherently, almost subconscious, level. Our idea of Britishness is rooted in the notion of history and a sense of belonging by birthright to a superior tribe - it's not one which can easily be extended to incomers. Much as we might be uncomfortable with this fact, and wish to reinvent it, Britishness is not like Americanism - not something that exists above the mundane workings of the State, that can be collected on production of a Pass Certificate in a citizenship test.

What we lack, here, is the ability to promote some higher ideal which, by galvanising the whole of society into a true and active aspiration to better itself would, at a stroke, remove much of the effect of the drag-anchor that holds Britain back. Our politics have reached a stage where each of the parties is trying to appeal on almost identical grounds to identical constituencies, with only the most subliminal of nods towards satisfying the conflicting desires of rich and poor, haves and have-nots, workers and shirkers. Yet despite the decline of ideological differences, we don't have a common set of definable goals. We've thrown out our Land of Hope and Glory and can't find its successor.

Friday, September 05, 2008

Art imitates life

Who needs a strong plot and sensible dialogue when there's dazzling colour, pumping music, pounding flamenco, enough gags and tricks to fill a dozen pantos and a sword-flashing hero? Zorro at the Garrick has the lot and after the all-singing, all-dancing, up-on-your-feet, clap-along finale, you just have to stamp and heel-click your way back up Charing Cross Road to the Tube if you've got a fun-bone anywhere in your body. Loved it. Hope it runs a million years.

I'd say much the same thing about pistol-packing VP hopeful, Sarah Palin. Thank heavens for a politician who just makes you want to feel good instead of pretending she can save the world. Who cares whether she knows what she's doing - I'd back her in an arm-wrestle against Putin any day. Forget Obama, I'm done with feeling everyone's pain. And move over McCain, collect your pension and give Sarah the No1 job. Let's at least all go to Hell rocking and rolling.

Monday, September 01, 2008

Compensation Roulette - place your bets

There but for the Grace of God...

Once upon a time, there was an Assistant Director, Alex, and his boss, Bob.
Bob was well-qualified, talented, solid, and in his fifties. Alex was younger, equally qualified, more talented, dynamic, loyal, ambitious but frustrated. He used to come to my office, we'd stay on after hours draining long G&Ts and discussing how to get his ideas put into action. Usually, it was up to me to go and 'suggest' them to Bob and, if necessary, lean on him to get things going.

Well, eventually, Alex had an offer of a better job elsewhere. I was desperate to keep him so I put it to Bob that we could unload him organise a beneficial early retirement package so as to promote Alex. It turned out to be pretty much the worst thing I could have done. It caused resentment with Bob, who felt insulted and wouldn't go. Resentment, too, among other senior managers who saw their comfort zones threatened. And, eventually, resentment from Alex once he realised he'd missed the boat.

My judgement was, I freely admit, subjective. If I'd had to produce written evidence of their different competencies, or Bob's deficiencies, I'd have found it difficult if not almost impossible. Much of the preference I had for Alex was based on compatibility - we sparked off each other in a way that Bob and I didn't and both performed the better for it. To be honest, even his willingness to stay behind and get pished was an asset. But securing his flair and ability for what I saw as the long-term benefit of the organisation was my only real motive for wanting to keep him. Probably in by-the-book HR terms, this was totally unrealistic. But these were all white men, so nobody had grounds for £1m discrimination claims so what the hell.

So I'd screwed up. Maybe I should have handled it better or maybe just done nothing, I still don't know. But either way, I thank my lucky stars that none of the people involved were black or Asian. Because the state of race relations that we've reached now, as the Tarique Ghaffur/Met Police case shows, is making decision-making impossible in situations where a question of equal treatment comes up. How we deal with the issue of racism when it's falling off the invisible end of the spectrum, I just don't know. It's blinding obvious, really... we just aren't all the same. I don't mean better or worse, just "same", irrespective of/and/or/including ethnic differences. That's going to lead, at some level, to making some people harder to work with than others and some of them will be black.

Ghaffur has risen spectacularly through the ranks to his £180,000 job. He may just have reached the limits of his competence. May have been promoted a job too far, indeed. May even be the victim of having a less than compatible personality which could, yes, be rooted in his ethnicity and religion. But does that equate to racism? Nah.. I don't think so. If it's found to be so, we should look at re-writing the rules. Otherwise we're confirming the advantage
over the rest of us that people like Ghaffur are only too willing to exploit... and giving every other loser with a gripe the excuse to turn to the blame game as his excuse.