In recent posts I might have been overly acerbic about the non-elected Lords and Ladies, who are leading the bailout of the British economy and its banks by
HM Government. On reflection I would have to say Lord Myners, Lord Turner and Baroness Vadera know what the problems are and are working hard to resolve them. However, I must admit that I have changed my mind about the UK Chancellor Alistair Darling. Originally, I thought he was just a stooge of Prime Minister Gordon Brown but he has worked hard on the rescue packages. Apparently, Darling has earned a grudging respect from the business sector.
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I also thought for a long time that Bank of England governor Mervyn King should have been sacked. Crimes include being an Aston Villa fan and letting Gordon Brown cronies infiltrate the monetary policy committee. However, King has eschewed the normal delphic comments of central bankers and has said it as it is. He warned about possible bank nationalisation, which has virtually happened at the Royal Bank of Scotland (RBS). He also exercised the power, rarely exercised, of central bankers to talk down the currency. Probably, this was useful in terms of reviving the economy, since it will take time to produce effects.
Thursday, 29 January 2009
Reasons to be cheerful - one, two, three.
I have realised that I have been grinding on the about the economic situation and Gordon Brown. So, I have decided to share with you, Dear Blogreader, reasons to be cheerful - one, two, three.
1) Paris Hilton is in London and Britney Spears is coming soon.
2) Today, Liverpool are 8 to 1 to win the League. The odds from bookies are notoriously stingy. True odds would probably be around 5 to 1 but the inference is that Rafa Benitez is not going to catch Fergie up.
3) If you are culturally inclined, the Byzantium exhibition at the Royal Academy in London is amazing.
4) Arsenal are not in the market for top players.
5) You can get a pint of IPA for ninety nine pence from JD Wetherspoon.
6) The lotto syndicate won £115 last week and this sum will be cautiously re-invested over the forthcoming weeks.
www.searchaccountant.co.uk
1) Paris Hilton is in London and Britney Spears is coming soon.
2) Today, Liverpool are 8 to 1 to win the League. The odds from bookies are notoriously stingy. True odds would probably be around 5 to 1 but the inference is that Rafa Benitez is not going to catch Fergie up.
3) If you are culturally inclined, the Byzantium exhibition at the Royal Academy in London is amazing.
4) Arsenal are not in the market for top players.
5) You can get a pint of IPA for ninety nine pence from JD Wetherspoon.
6) The lotto syndicate won £115 last week and this sum will be cautiously re-invested over the forthcoming weeks.
www.searchaccountant.co.uk
Wednesday, 28 January 2009
UK car rescue is a bit of a damp squib.
Lord Mandelson's rescue of the UK car industry was unveiled yesterday. Amounting to only a couple of billion, it did not seem to include any incentives for the Great British Public to go out and buy a car. On BBC Breakfast this morning economist Ruth Lea dropped her microphone but could still be clearly heard stating that the plan did not address the lack of credit faced by potential buyers of cars.
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The government could launch incentives to scrap old cars and replace them "greener" ones similar to the programmes in Germany and Spain.
You have to feel sorry for the car industry given the largesse thrown at the banking sector. I suppose the government feels that there are other industries in the queue.
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The government could launch incentives to scrap old cars and replace them "greener" ones similar to the programmes in Germany and Spain.
You have to feel sorry for the car industry given the largesse thrown at the banking sector. I suppose the government feels that there are other industries in the queue.
Tuesday, 27 January 2009
Am I just being hysterical over national bankruptcy?
Today Lord Mandelson is saving the foreign-owned car industry in the United Kingdom.
Long-term the car industry would always relocate to where the customers are and that is basically China and the Far East. Unfortunately, you don't want the industry to relocate now given its ability to create direct and indirect jobs. I am sure Tata would prefer to make Jaguars in India and that was the original plan behind the acquisition of the UK manufacturer from U.S auto group Ford.
So am I just being hysterical over Albion going bankrupt, if long-term the country is not going to have a car industry with all of its exports and R&D?
I read a brilliant article by Roger Bootle in the Daily Telegraph rebutting UK bankruptcy but if you read economic commentators around the world they are arguing that major economic shifts are happening. For instance, Western living standards are going to decline and savings rates will return to normal levels, even in the United States. Things are serious when President Obama's Treasury Secretary is unpleasant to China about exchange rates.
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I suppose Lord Mandelson, Lord Myners, Lady Vadera and Lord Turner are working hard to prevent UK bankruptcy. However,we are all hostage to how long the recession will last. Chancellor Alistair Darling has predicted a recovery in the second half of 2009 but if the recession lasts for longer then the pound could take some serious damage. I know it sounds suicidal but I would increase taxes now, which would ease the pain later on. This might lift sterling but to expect a manufacturing renaissance on lower exchange rates is just a delusion. I would try and encourage the retail buying of UK government bonds and gilts.
Long-term the car industry would always relocate to where the customers are and that is basically China and the Far East. Unfortunately, you don't want the industry to relocate now given its ability to create direct and indirect jobs. I am sure Tata would prefer to make Jaguars in India and that was the original plan behind the acquisition of the UK manufacturer from U.S auto group Ford.
So am I just being hysterical over Albion going bankrupt, if long-term the country is not going to have a car industry with all of its exports and R&D?
I read a brilliant article by Roger Bootle in the Daily Telegraph rebutting UK bankruptcy but if you read economic commentators around the world they are arguing that major economic shifts are happening. For instance, Western living standards are going to decline and savings rates will return to normal levels, even in the United States. Things are serious when President Obama's Treasury Secretary is unpleasant to China about exchange rates.
www.searchaccountant.co.uk
I suppose Lord Mandelson, Lord Myners, Lady Vadera and Lord Turner are working hard to prevent UK bankruptcy. However,we are all hostage to how long the recession will last. Chancellor Alistair Darling has predicted a recovery in the second half of 2009 but if the recession lasts for longer then the pound could take some serious damage. I know it sounds suicidal but I would increase taxes now, which would ease the pain later on. This might lift sterling but to expect a manufacturing renaissance on lower exchange rates is just a delusion. I would try and encourage the retail buying of UK government bonds and gilts.
Thursday, 22 January 2009
Well the UK has not gone bankrupt today.
I get the impression that the UK government is being overwhelmed by events. There seems to be a concerted attempt by junior ministers to talk things up (the green shoots of Ms Vadera) but then shot down by FSA boss Mr Turner, who predicts that the economic recovery will not take place until 2011.
The Frogs are complaining about the collapse of the pound so hopefully it is doing us some good. Further declines in the pound are on the way when interest rates hit zero and when the Bank of England starts printing money. And we are so critical of
Robert Mugabe!
www.searchaccountant.co.uk
The Frogs are complaining about the collapse of the pound so hopefully it is doing us some good. Further declines in the pound are on the way when interest rates hit zero and when the Bank of England starts printing money. And we are so critical of
Robert Mugabe!
www.searchaccountant.co.uk
Tuesday, 20 January 2009
Has "Fred the Shred" bankrupted Britain?
On a day when thousands of Britons are downgrading their foreign holidays for 2009
(less time away, non-Euro location, or not at all), we must be wondering if Sir Fred Goodwin, former chief executive of Royal Bank of Scotland, has bankrupted Britain. The nationalisation of RBS looks inevitable but quite a few observers consider that the UK will have trouble handling the bank's foreign liabilities.
What will bankruptcy be like? Hopefully, the Brown government will reach a deal before then with the IMF or with the European Union or with both. The IMF tried and tested formula (which probably does not work very well) is to have public sector cuts. In the 1930s teachers suffered pay cuts and obviously I don't think the Labour government would like to attack one of its natural constituencies but it might be
considered.
Ireland is trying to negotiate a pay deal with the unions over the public sector. Its economy is being hit by factors such as the euro interest rate and by the euro exchange rate (depreciation in sterling), which is affecting its exports. If it was not for possible deflation, both Ireland and UK could get away with a pay restraint deal involving below-inflation rises. It looks like the pay freezes and zero bonuses of the private sector will be transferred to the public sector.
Back to Fred the Shred, a former darling of New Labour. I bet Gordon Brown wished he had never met him. RBS has admitted that it overpaid by £15bn to £20bn for Dutch bank ABN Amro but Fred the Shred just ignored the criticism of the deal at the time. He just had to get one over Barclays. It is not hindsight. Quite a few people said the deal was pants but the RBS board and shareholders, the FSA, the Bank of England, the government did not feel it was up to them to do anything about it.
What will bankruptcy feel like? I suppose there could be a Latin American rush to the banks and building societies by people to convert their savings into dollars. There might be emergency exchange controls to prevent people taking foreign exchange out. And Gordon Brown will still be there talking about fairness, enterprise etc while the Queen is approving the establishment of a National coalition government.
www.searchaccountant.co.uk
Probably all of a pipe dream. Although Gordon Brown is being found out by events I want him to succeed in the bank rescue. However, he has got to give himself a chance. Last weekend rather than trying to lead the UK government in this deadly serious financial/economic crisis he was in Egypt discussing Gaza. This might be good for the ego but looks like he is shirking domestic problems.
(less time away, non-Euro location, or not at all), we must be wondering if Sir Fred Goodwin, former chief executive of Royal Bank of Scotland, has bankrupted Britain. The nationalisation of RBS looks inevitable but quite a few observers consider that the UK will have trouble handling the bank's foreign liabilities.
What will bankruptcy be like? Hopefully, the Brown government will reach a deal before then with the IMF or with the European Union or with both. The IMF tried and tested formula (which probably does not work very well) is to have public sector cuts. In the 1930s teachers suffered pay cuts and obviously I don't think the Labour government would like to attack one of its natural constituencies but it might be
considered.
Ireland is trying to negotiate a pay deal with the unions over the public sector. Its economy is being hit by factors such as the euro interest rate and by the euro exchange rate (depreciation in sterling), which is affecting its exports. If it was not for possible deflation, both Ireland and UK could get away with a pay restraint deal involving below-inflation rises. It looks like the pay freezes and zero bonuses of the private sector will be transferred to the public sector.
Back to Fred the Shred, a former darling of New Labour. I bet Gordon Brown wished he had never met him. RBS has admitted that it overpaid by £15bn to £20bn for Dutch bank ABN Amro but Fred the Shred just ignored the criticism of the deal at the time. He just had to get one over Barclays. It is not hindsight. Quite a few people said the deal was pants but the RBS board and shareholders, the FSA, the Bank of England, the government did not feel it was up to them to do anything about it.
What will bankruptcy feel like? I suppose there could be a Latin American rush to the banks and building societies by people to convert their savings into dollars. There might be emergency exchange controls to prevent people taking foreign exchange out. And Gordon Brown will still be there talking about fairness, enterprise etc while the Queen is approving the establishment of a National coalition government.
www.searchaccountant.co.uk
Probably all of a pipe dream. Although Gordon Brown is being found out by events I want him to succeed in the bank rescue. However, he has got to give himself a chance. Last weekend rather than trying to lead the UK government in this deadly serious financial/economic crisis he was in Egypt discussing Gaza. This might be good for the ego but looks like he is shirking domestic problems.
Friday, 16 January 2009
I wonder where the Heathrow 3rd runway will be built?
I had thought that UK premier Gordon Brown would do anything to win the next general election. However, I have been proved wrong. His government's decision to give a go-ahead to the third runway at Heathrow sacrifices a lot of votes in West London. The possible forthcoming Tory government under David Cameron says that it will cancel the project.
www.searchaccountant.co.uk
The imposition of supposed "green" flights and the previous dissension of ministers such as H. Benn and E. Miliband undermines the approval package. I had hoped that the two ministers would resign over the go-ahead but I expect they like their ministerial cars etc. Resignations would improve their standings. Gordon Brown won't be with us forever.
The go-ahead was sweetened with possible rail projects. These should be planned for
airports such as Stansted and Gatwick, which probably could do with a new runway each. Possibly, the UK is not very good at airport planning. In 2008 traffic was down at these two airports so the current economic case for new runways does not stack up.
www.searchaccountant.co.uk
The imposition of supposed "green" flights and the previous dissension of ministers such as H. Benn and E. Miliband undermines the approval package. I had hoped that the two ministers would resign over the go-ahead but I expect they like their ministerial cars etc. Resignations would improve their standings. Gordon Brown won't be with us forever.
The go-ahead was sweetened with possible rail projects. These should be planned for
airports such as Stansted and Gatwick, which probably could do with a new runway each. Possibly, the UK is not very good at airport planning. In 2008 traffic was down at these two airports so the current economic case for new runways does not stack up.
Thursday, 15 January 2009
The low pound is not making a dent in trade figures.
Looking back at my posts I realise that I might both have praised and condemned the British government's engineered fall in sterling. The main factor in favour of the lower pound is that it would help make exports cheaper and imports more expensive. However, the low pound is not making a dent in UK trade figures. On an anecdotal basis it is making West End stores and restaurants busy. The low pound is also diverting UK tourists to non-euro destinations such as Turkey
www.searchaccountant.co.uk
However, low sterling contradicts the previous policy of the Bank of England to use the exchange rate of keeping a lid on inflation. There are worries that inflation will soar when the central bank takes too long to raise interest rates when the economy recovers. Another factor would the lack of government approval for tightening. Over the last year there is the sense that the Bank of England lost control of monetary events and lost its supposed independence.
On balance, I don't like a cheap pound but I think that having your own exchange rate is a great shock absorber when the government has made a complete horlicks of economic policy. It is probably not appreciated by our Eurozone neighbours, who want to sell into Britain (Treasure Island).
www.searchaccountant.co.uk
However, low sterling contradicts the previous policy of the Bank of England to use the exchange rate of keeping a lid on inflation. There are worries that inflation will soar when the central bank takes too long to raise interest rates when the economy recovers. Another factor would the lack of government approval for tightening. Over the last year there is the sense that the Bank of England lost control of monetary events and lost its supposed independence.
On balance, I don't like a cheap pound but I think that having your own exchange rate is a great shock absorber when the government has made a complete horlicks of economic policy. It is probably not appreciated by our Eurozone neighbours, who want to sell into Britain (Treasure Island).
Wednesday, 14 January 2009
I am breaking one of my New Year resolutions!!
I can't believe Manchester City seriously want to pay a ton of money to get Kaka from AC Milan. With their record they should be buying to improve their defence and midfield. They have got enough Brazilians there why do they want any more?
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Flo and Elano are exceptionally talented players but in any team you need the good, the bad and the ugly. Flo and Elano are not committed enough in a league, where there are no easy games. Obviously, I am breaking one New Year resolution already by going on about Man City.
You have to build from the defence up. I know the Arsenal fans did not like Gilberto, another Brazilian!!, but he did protect the defence and is sorely missed.
A few years ago Kaka blew Man Utd out of the European Cup. But if he costs £91m or £100m whatever there will never be an economic return on the transfer since it could take two or three years to get into the money-spinning European Cup. He would also have to be handled by a top manager, such as Luiz Felipe Scolari, who is used to dealing with the top players.
Clubs such as Real Madrid have tried the "galatico" policy before and they might have sold a few more shirts in Asia but they have not really succeeded on the
pitch.
Meanwhile, if you are interested in an accountancy firm based in Gloucester there is
Robert Powell with the email address robert@robert-powell.co.uk
www.searchaccountant.co.uk
Flo and Elano are exceptionally talented players but in any team you need the good, the bad and the ugly. Flo and Elano are not committed enough in a league, where there are no easy games. Obviously, I am breaking one New Year resolution already by going on about Man City.
You have to build from the defence up. I know the Arsenal fans did not like Gilberto, another Brazilian!!, but he did protect the defence and is sorely missed.
A few years ago Kaka blew Man Utd out of the European Cup. But if he costs £91m or £100m whatever there will never be an economic return on the transfer since it could take two or three years to get into the money-spinning European Cup. He would also have to be handled by a top manager, such as Luiz Felipe Scolari, who is used to dealing with the top players.
Clubs such as Real Madrid have tried the "galatico" policy before and they might have sold a few more shirts in Asia but they have not really succeeded on the
pitch.
Meanwhile, if you are interested in an accountancy firm based in Gloucester there is
Robert Powell with the email address robert@robert-powell.co.uk
Wednesday, 7 January 2009
My New Year resolutions for this blog in 2009.
Dear Readers, I have decided to have a few resolutions for this blog during 2009. One is to have less stories on football in general and on Manchester City in particular. I think the decision has already been made that a world class team will be assembled but without Mark Hughes. For all sorts of reasons it has not worked out.
www.searchaccountant.co.uk
The second resolution is not to go on too much about Gordon Brown, our flawed beloved leader, who is making us poorer. The engineered decline of the pound might help our diminished manufacturing sector and lift our trade figures by making imports more expensive. However, it will increase inflation and prevent UK citizens from trying to escape. I am not shedding a tear for the property market in the Spanish costas. For years we have had a strong pound policy with high interest rates and now we have a weak pound with zero interest rates. Thanks a lot Gordon.
The third resolution is to be more optimistic. 2009 will be tough but we will just have to get through it. Personally, I will try and fight the flab. I also want to score more goals playing six a side.
www.searchaccountant.co.uk
The second resolution is not to go on too much about Gordon Brown, our flawed beloved leader, who is making us poorer. The engineered decline of the pound might help our diminished manufacturing sector and lift our trade figures by making imports more expensive. However, it will increase inflation and prevent UK citizens from trying to escape. I am not shedding a tear for the property market in the Spanish costas. For years we have had a strong pound policy with high interest rates and now we have a weak pound with zero interest rates. Thanks a lot Gordon.
The third resolution is to be more optimistic. 2009 will be tough but we will just have to get through it. Personally, I will try and fight the flab. I also want to score more goals playing six a side.
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