Money | Anorak - Part 43

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Money in the news and how you are going to pay and pay and pay

Sir Fred Goodwin is dead – ‘Call me’ Tony Blair troughs on

SIR Fred Goodwin is now plain Fred Goodwin. The Government has decided to change the name of the man portrayed as the epitome of City greed.

Goodwin, the former Royal Bank of Scotland chief, has been told by a clutch / smudge / cloud of senior civil servants that the “scale and severity” of his actions and their affect on the economy are an “exceptional case”.

Fred may wonder why he has been singled out and the likes of, say, Paul Edward Winston White, a man jailed for defrauding the taxpayer by dishonestly claiming £14,000 from the House of Lords continues to be known as Lord Hanningfield? Prince Charles may one day score the title Defender of the Faith – you know, the Christian Church that says adultery is wrong.

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Posted: 31st, January 2012 | In: Money | Comment

Sarkozy to make London estate agents rich with his FTT idiocy

AS if it wasn’t bad enough with every Sloane who couldn’t scrape three GCSE’s together riving around in bloody Minis, it looks like the London estate ageny game is going to get yet another boost thanks to France and Sarkozy.

France has added some more rocket fuel to Monday’s already volatile summit of EU leaders by pledging to introduce a 0.1pc tax on financial transactions in August.

They’re only going to add it in France though so what will happen is that all wholesale banking that currently takes place in France will take place in London from about, oooooh, 1 September I should think.

Leave aside whether the FTT is a bloody stupid idea or not (it is a bloody stupid idea, it won’t raise any cash and it will shrink the economy) and concentrate just on the idea of bringing it in in one country only.

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Posted: 31st, January 2012 | In: Money | Comment

Daily Mail nails Stephen Hester with cunning stunt

THE Daily Mail nails Royal Bank of Scotland chief executive Stephen Hester with a caption that show how spite and bile and sniping can if designed with skill hit the target smack between the eyes. Our writers take a view here and here


Posted: 30th, January 2012 | In: Money | Comment

What a farrago of ignorant stupidity over Stephen Hester’s damn bonus – Miliband’s an idiot

Royal Bank of Scotland chief executive Stephen Heston will nto accept his million pound share bonus.

IT was only a couple of years ago you know, that there was a great outcry about bankers getting huge cash bonuses. The analysis was that if they just got paid out in cash then they wouldn’t be tied to the organisation. Instead the bonuses should be paid in shares that could not be sold for a few years: that would tie everyone in to the long term interests of the company. No doing a deal that makes a good bonus this year but then bankrupts the bank next.

This year we’ve got a banker being paid a bonus entirely in shares. Shares that he cannot sell for several years. Shares that tie him in to the long term prospects of the company, make sure he won’t be tempted to do something stupid for the short term.

The reaction from the adenoidal Miliband that runs the Labour Party? The Adenoid who sat in the Cabinet that approved the damn contract for Stephen Hester in the first place?

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Posted: 30th, January 2012 | In: Money | Comments (10)

The German way of dealing with unemployment

THE usual Guardianista rant about how lovely Germany is with its apprentice schemes and low youth unemployment:

In the battle between rival systems, “Rhineland capitalism” appears to be winning hands down. In the two years since the global economic downturn in 2009, Germany has expanded employment by 1.8m, while the UK, US, France, Italy and Spain have shed 7m jobs. In 2007, when most other countries were nearing the end of a boom driven by excess credit, Germany had the highest unemployment rate (8.7% of the workforce on a harmonised basis) of the group of seven leading industrialised countries. Yet in late 2011, according to OECD figures, German unemployment, at 5.2%, was the lowest in the G7 apart from Japan.

Note that very interesting comparison there between the countries with near 500 million people and one with 80 million odd. You can prove almost anything you like if you’re willing to switch denominators like that.

But much more important than that sort of statistical game is the thing that they’re not telling us about that German system.

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Posted: 27th, January 2012 | In: Money | Comments (2)

Is Labour really being this damn stupid? Rent control don’t work

IS the Labour Party so very stupid? Something I simply could not believe in Polly Toynbee’s column today. And believe me, I’ve seen an awful lot in that column over the years but nothing to quite match this:

But Labour will adopt one good policy. They will bring back rent controls.


Which blithering idiot is proposing this? Which flapheaded addlepate is suggesting that we currently have too much housing and that therefore we should have less?

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Posted: 27th, January 2012 | In: Money | Comments (3)

The cashless scrap metal market – government bans recycling iron and steel

THE scrap metal is cashless. Yes, there has been a rising problem with the theft of scrap metal, yes, banning people paying cash for it will help, at least at the margins.

Theresa May, the Home Secretary, will ban cash transactions and and introduce unlimited fines for people caught trading stolen scrap metal.

Ministers have agreed to act after public outrage at the activities of criminals who have pillaged churches, stripped war memorials, stolen valuable sculptures, plunged villages into darkness and wrought havoc on the rail industry.

Metal theft is estimated to cost the country £1 billion a year, with more than 1,000 offences taking place every week.

However, it’s worth recalling the most basic point that economics has to teach us. Which is that there is no such thing as a solution: there are only trade offs.

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Posted: 25th, January 2012 | In: Money | Comment

Petroplus Goes Bust: What shortage of fuel?

PETROPLUS has gone bust. The media chatter is of fuel shortages. This does rather amuse:

The UK government moved to calm fears of a fuel shortage on forecourts in London and the South East after the Coryton refinery, which supplies 20pc of fuel for the region, stopped sales with immediate effect on Monday afternoon.

Ministers said they were “confident” that motorists would not face disruption to forecourt supplies as petrol retailers found alternative sources of fuel.

Well of course there’s not going to be any shortage of fuel. For two reasons:

1) The refinery is still running. The administrators aren’t going to leave it cold and dead, they’re going to keep running it until a buyer can be found.

2) Why did the refinery go bust? Because there is excess capacity in the system. We have too many refineries, not just in the UK, but in Northern Europe. Thus no one is making any money as there’s lots of competition.

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Posted: 25th, January 2012 | In: Money | Comments (3)

Gareth and Catherine Bull win £40,627,241 on Euromillions

GARETH and Catherine Bull win £40,627,241 on Euromillions. He wants to buy a box at Manchester United. For that money he can have shin pads, as well…

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Posted: 24th, January 2012 | In: Money | Comment

Met Police only spent £35,000 calling the Speaking Clock

DID you know that the Metropolitan Police Force spent £35,000 on the Speaking Clock in the past two years? It’s true. You can ask a policeman the time secure in the knowledge that he will check his sources and deliver the truth.

Londonist reports that “by May 2012 there are predicted to be 32,510 officers on the Met’s payroll“. There are also over 14,00o other staff on the books. That’s 46,000 people spending £35,000 on the Speaking Clock over two years. These workers between them made 110,000 calls to the Speaking Clock. That works out between one and two calls per worker per year.

Matthew Sinclair, of the TaxPayers’ Alliance, said this was “incredible”.

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Posted: 19th, January 2012 | In: Money | Comment

If Italy goes into recession then the Euro’s over

IF Italy goes into recession then the Euro’s over. That’s one way of looking at it at least: if Italy goes into a deep recession then the game’s up for the euro.

The reason being that the eurozone just doesn’t have enough money to keep Italy’s borrowing costs down. So everyone needs to know that Italy isn’t going to increase the debt they’ve already got. However, obviously, in a recession, this isn’t possible, debt is going to increase.

So, recession in Italy means that whatever people try and cobble together to keep Italian borrowing rates down won’t work: at which point Italy goes bust like Greece.

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Posted: 19th, January 2012 | In: Money | Comment

Why breaking up Ikea prove Marx was wrong

WHAT’S the problem with Ikea? Should it be broken up? And why does it prove that Marx was wrong?

Anders Dahlvig, the flat-pack pioneer’s boss from 1999 until 2009, said IKEA faced the prospect of slowing growth and rising costs. He said the chain had struggled under his watch to come to terms with its scale and develop the processes required to manage a company with £20bn of revenue and operating in 41 countries.

Mr Dahlvig said it had taken his 10 years at the helm to introduce benchmarking disciplines but that he had underestimated the “forces” within IKEA opposed to the changes and had left with the job “only 50pc there”. Instead, he argued that IKEA’s octogenarian founder Ingvar Kamprad and his three sons, who own the company through a Dutch foundation, should consider splitting the business in three.

“Let’s say we cut Ikea in three pieces – one in North America, one in Europe and one in Asia – everyone do their own product development; their own supply chain. Their own thing,” said Mr Dahlvig.

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Posted: 18th, January 2012 | In: Money | Comments (13)

Why the Government was right to force you and Cait Reilly to work in Poundland for free

THE Government was right to force Ms. Cait Reilly, the University of Birmingham geology graduate, and you to work at Poundland. This is aimed directly at you, Reilly:

“Forcing young people like me into unpaid work is wrong – and evidence shows it won’t solve the unemployment crisis.”

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Posted: 16th, January 2012 | In: Money | Comments (4)

In photos – Spanish Sparrow spotted in Calshot, Southampton

GOOD news for anyone looking for a Spanish sparrow. One’s been spotted in Calshot Close in Calshot near Southampton. It’s an adult male Spanish sparrow thought to be from Spain, Turkey or North Africa.

Background checks are being run on the foreign invader. Says one Cockney Sparrow: “I had 27 of them in the back of my hedgerow once…”

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Posted: 14th, January 2012 | In: Money | Comment (1)

You local HSBC is 0.5320458941752867 miles away

WE normally rather like it when banks are accurate. You know, count our money correctly, manage  to send the new credit card to the right address, that sort of thing. But it is possible for them to perhaps be just a little bit over-enthusiastic.

Measuring from my parent’s house to the nearest HSBC branch it tells me that it is 0.5320458941752867 miles.


This is perhaps rather more accuracy that we really need:

17 decimal places represents atomic-scale accuracy. This means we now know just how far it is to our handiest HSBC to within a few electrons, which is extremely useful.

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Posted: 6th, January 2012 | In: Money | Comment

Adele’s 21 biggest selling album ever: online piracy to blame

WELL, OK, no, Adele’s 21 hasn’t been the biggest selling album of all time, no, but it has been the biggest selling album in one year for the UK.


As is pointed out:

Despite all this “chronic” piracy going on, Adele’s album has sold more copies in a year than any album has ever sold. More than a Michael Jackson album managed in a year, even the good one. More than a Beatles album ever managed to whisk out the shops in twelve months. More, even, than the third Charlatans album sold in a year.

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Posted: 5th, January 2012 | In: Money | Comment (1)

Milton Friedman was right about the euro you know

MILTON Friedman was not right about everything, certainly, but there was much more to his views than just that the working class should have their faces ground in the dust and the 1% should be allowed to enjoy ever rising profits without hindrance.

My point being that whatever you might think about his views of what was a desirable world, he was in fact a very good economist indeed.

As shown by these few quotes:

“The euro will not survive the first major European recession”

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Posted: 4th, January 2012 | In: Money | Comments (2)

Taxpayers’ subsidy for House of Commons bars rises to £5.8m a year

THIS is one of those things that really rather gets the dander up:

The taxpayers’ subsidy for the bars and restaurants in the Houses of Commons has risen to £5.8m a year, despite promises by parliamentary official to cut public funding for politicians’ meals and drinks.

That’s right, even after all that expenses stuff, the jailing of a few of them, they’re still snouts in the trough. And no, this isn’t just Bastard Tories or anything, this is the whole lot of them.

But in the Members Dining Room, MPs are served an artichoke and tomato salad with truffle dressing for £2.05, or a seared breast of pigeon with aubergine purée and spiced couscous for just £4.15.

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Posted: 3rd, January 2012 | In: Money | Comment

Dear God, even the Telegraph Can’t understand Corporate Tax

DO newspapers understand tax? No. We sorta expect this sort of thing from the Guardian or the Mirror. Not just whipping up people into paroxysms of rage about companies not paying their tax but not actually understanding what’s going on in the first place.

Now we appear to have the Telegraph again, not just whipping people up, but actually not understanding what in buggery’s going on at all.

Barclays stockpiles ‘losses’ to soften tax obligations
Barclays has amassed a war chest of “losses” to offset against future tax payments that can almost rival those at the crippled state-backed banks, despite remaining strongly profitable.

Yep, if you make a loss you can carry that loss forward to when you make a profit and set it off against that profit. Obviously.

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Posted: 2nd, January 2012 | In: Key Posts, Money | Comment

The UK has a very progressive tax system

YOU’VE heard all the shouting no doubt, that our big problem is that we just don’t tax the rich enough. If only we made the tax system more progressive, if only the fat cats had a larger slice taken out of their paycheques then everything would be lovely. Or better. Or fairer. Or something anyway.

The problem with this is that the UK already has a progressive income tax system. In fact, among the major economies (ie, the G-8, which is the 7 biggest plus Russia) the UK has the most progressive income tax system.

You can also get some interesting information about progressivity from the two charts. A rough measure of that is the difference in the (average) tax rate shown on the two charts. A bigger difference shows a more progressive tax system:

  • U.K.: 22.3%
  • Italy: 21.1%
  • America: 20.7%
  • Canada: 20.1%
  • Japan: 18.8%
  • Germany: 16.6%
  • France: 16.2%
  • Russia: 0%

Not surprisingly, England tops the list: that’s why all their rock, movie, and sports stars live in other countries.

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Posted: 29th, December 2011 | In: Money | Comment

Betfair punters confident they will big tomorrow

NO longer are all horse racing gamblers living in bedsits over shops in provincial towns. Thanks to Betfair, they are now all rich. The online bookie offered Odds of 28-1 had been offered 28-1 on the favourite Voler La Vedette in 2pm Christmas Hurdle at Leopardstown.

Only Betfair then declined to honour the bets. As the company says:

“Customers betting in-play on this race will have seen that Voler La Vedette was available to back at 29 when the in-running market was suspended, and that a considerable sum was matched on the clear winner at that price. An investigation has revealed that this was due to an obvious technical failure which allowed a customer to exceed their exposure limit. In accordance with our terms and conditions, all in running bets on this race, both win and place, will be made void. We fully appreciate the dissatisfaction this will cause many customers, and apologise for a very poor customer and betting experience.”

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Posted: 28th, December 2011 | In: Money | Comment

High fructose corn syrup v sugar and other political solutions

IT’S a general truism that politics doesn’t actually solve much: it’s really just a way of working out who gets what without resorting to slaughter and rapine as a method of division. However, in that solving not very much part of each political solution is the kernel of the next grievance which we need to use politics to resolve.

Take, for example, the little spat in the US over High Fructose Corn Syrup (HFCS) and sugar. It’s all a he said/she said nonsense over what you can say about the two different sweetners.

Big Corn and Big Sugar are locked in a legal and public relations fight in the US over a plan to change the name of a corn-based sweetener that has gotten a bad name.

The fight began last year when Corn Refiners Association, a trade association, proposed changing the name of high-fructose corn syrup to merely “corn sugar.”

The group said the new name “more accurately describes this sweetener and helps clarify food products labeling for manufacturers and consumers alike.”

But the sugar industry argued this change would be a bitter pill for US consumers and would only add to the confusion about a sweetener that has drawn criticism by some health advocates.

Sugar producers have filed suit alleging the corn industry has spent $50 million in “a mass media rebranding campaign that misleads the consuming public by asserting falsely that HFCS is natural and is indistinguishable from the sugar extracted from sugar cane and sugar beets.”

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Posted: 28th, December 2011 | In: Money | Comments (2)

Apple v AT& T: Who Ends Up With The Money?

APPLE versus AT&T – everyone wants the iPhone but at what cost to the carriers?

OK, so this example is from the US but the same things happens in the UK as well. It’s an example of a basic truth about money and business: whoever has the scarce thing gets to make all the money.

That’s because every time a new iPhone model comes out, it’s the carriers—not consumers—that shell out the biggest bucks. Analysts estimate that carriers pay Apple a subsidy of about $400 each time a consumer buys an iPhone with a two-year contract.

AT&T and other wireless carriers say that subsidizing the iPhone heavily amounts to an investment that will make their customers more likely to stay and increase the amount of money they’re willing to spend for the carrier’s services. But some analysts say those benefits have yet to materialize.

At AT&T, Nomura Securities analyst Michael McCormack says, the profit margins on wireless service haven’t meaningfully improved since the company started carrying the iPhone in 2007.

“For the most part, it’s really been a wealth transfer from AT&T shareholders to Apple shareholders,” said Mr. McCormack, who predicts AT&T’s fourth-quarter profit margin will fall to 30% from 44% in the third quarter.

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Posted: 22nd, December 2011 | In: Money | Comment

EU can make airlines pay for carbon emissions

EU can make airlines pay for carbon emissions. That’s the headline from Reuters this morning. That the European Court of Justice has ruled that the EU can indeed make airlines pay for the carbon emissions of their flights.

And of course the answer is that “Oh no they can’t ” (It is, after all, panto season).

The court can certainly insist that payments are made for the carbon emissions but they cannot insist that the airlines pay it. In fact, it’s impossible for them to make the airlines pay it.

The reason is that companies, corporations, do not pay taxes. Ever. Sure, they might hand over the cheque but it’s not them really paying the money. For a tax always means that the wallet of some live human being is made lighter. And companies aren’t human beings so they don’t pay it.

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Posted: 21st, December 2011 | In: Money | Comment (1)

Little Nicky Clegg misunderstands the Wealth Gap

I CAN’T say I’m all that surprised that Nick Clegg does misunderstand the Wealth Gap, this is true, for the various writings and reports about it all make the same blitheringly obvious mistake.

Or if you’d prefer, everyone who writes about it lies about it in the same way.

“Wealth inequality is very much greater than income inequality, and widening,” Clegg said. “The bottom third of households hold just 3% of the nation’s wealth. The top third hold three-quarters of it. This inequality of wealth then cascades down the generations, potentially widening the opportunity gap.”

Now it’s true that wealth is unequally distributed and it’s also true that wealth inequality is greater than income inequality. However, that 3% to 75% ratio is entire cock and bull, invented shite.

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Posted: 20th, December 2011 | In: Money | Comment