The End Is Nigh

For a long time, I have been anti EU. I believe that it is a vast money wasting bureaucracy that serves no purpose other than to give jobs to dead duck politicians. They love it, of course, because it gives them buckets of cash and an unrestricted access to a monster gravy-train with little public limitation. It is undemocratic and useless. Now, as yet more woe piles on woe in the euro-zone, the European Commission calls for more support for "sinner states". How much support? Already the debts are heading for infinity with, naturally, no end in sight. Now Spain is heading for the exit doors becoming less and less able to fund its debts. Giving them a big bung to tide them over will yet again only delay the inevitable, making the final denouement even more catastrophic than it is going to be. Spain cannot escape. The debt is going up and up. the economy is shrinking, the unemployment rate is 25% and rising. Income falls, expenditure increases and more money has to be borrowed. At root, no politician is prepared to admit that the whole euro idea was crackers and doomed from day one. The uncritical supporters of the great European dream always wanted a federal Europe but they know now that citizens of Europe will never agree to such a thing. So they wriggle; tell us that constitutions are merely updated treaties; paste sticking plaster in every new leak and lumber the whole world with the consequences of their maneuvers.

The report published today by the European Commission proposes that the countries of the eurozone should create a "bank union" under which all countries would stand behind the collapsing banks. The Commission said that they would consider relaxing Spain's deficit reduction targets — thus allowing them to acquire more debt. The markets are not impressed since the new scheme will be rejected by the Germans.

Has there ever been, in modern times a political monstrosity to compare with the European Union? The sooner is dies the death the better. Supporters want a vast single " country" to compete with America and China. It will never happen. Where necessary we should work together as groups of countries to make things like Airbus, etc.

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Goodbye And Good-Luck Jussi

After the revelations about costs in the Premier League, matters are more mundane in the lower leagues, where most teams live on the edge. Bolton Wanderers are spending a lot of time looking at the books. Now demoted to the Championship, they have immense debts and this summer there will be a mass exodus of players — almost all for money reasons. One of those probably leaving will be goal-keeper, Jussi Jaaskalainen. He has been with Bolton for 15 years, has played 529 games and has been a great servant of the club — saving them from many an embarrassment. But now he is 37 years old and after an injury at the end of last year, his place was taken by young Adam Bogdan. Jussi has not been able to get back into the side and negotiations on a new salary deal have not looked promising — presumably on the basis that he will be second string goal-keeper in a Championship club. I would like him to stay because of his record and vast experience but all the signs are that he will go to West Ham and back to his old manager Sam Allardyce. Sam has been well served by players brought into the West Ham side who were former players at Bolton Wanderers. So Sam takes West Ham back into the Premier League as Bolton Wanderers — whom he took into the Premier League 11 years ago — sink back down to the Championship. I think Bolton will struggle with a shortage of players and money and, I have to say, I am not over-confident about the abilities of the manager, Owen Coyle.

Still Jussi Jaaskelainen is still a good goal-keeper — and goalies last a long time — and I wish him luck in a new career with the Hammers.

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Buddy, Can You Spare A Dime?

A report is published today that tells us that in spite of the credit crunch and the squeeze and that "we are all in it together", the cost of wages paid to footballers in the Premier League continues to rise. The driving force seems to be the wages paid to the players at the top six clubs. Chelsea's wage bill rose by £17m to £191m — the highest in the league — but Manchester City's wage bill went up by a staggering £41m to £174m — which accounted for 114% of the club's total income. The latest report by accountants Deloitte suggests that control of wages "continues to be football's biggest commercial challenge." You can say that again. Wages, on average, demanded 70% of all club incomes but the most successful club in the league, Manchester United kept its wages down to 46% of income. In the 21st Annual Review of Football Finance Deloitte tells us — in a statement of the blindingly obvious — that pay discipline is needed "in order to deliver robust and sustainable businesses".

The business model for the Premier League is never likely to look anything other than something from Alice in Wonderland. The top clubs spend buckets of money on players and get quite good attendances at matches — 50,000+ — while smaller, less wealthy clubs struggle to get good players — the best are unaffordable — and to get enough income. Most of the top clubs rely on billionaire owners to fill in the funding gaps and this has the effect of pushing wages higher and higher. The problem is exacerbated by the stadiums. Most clubs have a stadium that will hold 30,000+ spectators — which they struggle to fill and which costs a fortune because it is hardly ever used. Most are needed for about six hours per week and for the rest they sit like vast beached whales gathering dust and occupying a lot of expensive space. New stadiums should be shared and should incorporate other things to dissipate the costs.

Overall, in 2010-2011 the Premier League recorded pre-tax losses of £300 million with only eight clubs making any profit at all. Manchester City may have won the Premier League title this year — beating their rivals at Manchester United on goal difference only — but at what cost. Manchester City posted a pre-tax loss of £82m, while Manchester United made a profit of £100m. Some difference. Is this what they call buying success?

Nevertheless, the Premier League is such a money spinner that six of the top clubs in Europe — in terms of money generation — are in the Premier League. They are, as could be predicted, Manchester United, Arsenal, Manchester City, Liverpool, Tottenham Hotspur and Chelsea. I don't think that ex-Premier League Bolton Wanderers are likely to get onto the list any time soon — unless, of course, they can find themselves their own Russian billionaire.

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Jaguar Land-Rover On The Up

Good news in the newspapers today that Jaguar will next week unveil profits for 2011 of about £1.5 billion, which is probably a record. I am sure that Indian owners Tata will be very pleased with this. Only a few years back they were struggling to survive but much has been achieved as a result of work put into the company by the efforts of previous owners, Ford. They could never reap any real benefit because they had to sell the company to help bail out the parent company in America. I still love my X Type and apparently lots of other people still love their X Types as well. When Jaguar stopped making this car, senior executives at Jaguar said that they were giving up on the idea of making cheap cars for the masses and would concentrate on niche marketing. I thought it was a daft idea then but there were lots of motoring pundits who agreed with them. But, just the other day, I was reading that "many people are wondering why Jaguar gave up the X type — still very popular and holding its second-hand price — without first coming up with a replacement". Now they have a new design on the books and a new "X Type" will be on the roads in 2014 — probably a competitor for the BMW 3 Series. It will be the smallest Jaguar ever made and will be priced at about £20,000. Right! Exactly what they should have done before dropping production of the old model and, remember, this car always sold in more numbers than all the other cars put together. Alongside the XF, XK and the brand new F Type, they will have a good range. I am still not over enamoured with the new XJ. I still think that the old one was a much, much better looking car — with character. The new XJ still looks like something Germanic that didn't quite work out.

In a recent edition of Autocar, it seems that the old S series Jaguar is still No 1 for a good comfortable ride and handling. Extraordinary, considering how much it was slagged off by many — including the team on Top Gear.

But the motor industry is doing well all round. Vauxhall are expanding the factory at Ellesmere Port to make Astras for the next ten years and have got a good agreement with the unions for flexible working. Nissan are expanding in Sunderland — a factory which has the highest efficiency and productivity in the group and is best on quality issues. Who would have thought things like this could happen in the British motor industry. Sadly almost all is now under foreign ownership. Even Bentley and Rolls Royce are doing well. In the last year, for the first time since 1976, we exported more cars than we imported. Perhaps we can get some economic growth after all.

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Facebook Friends

Euro Crisis : Part 111.

Has anyone any meaningful or useful advice to offer on where to invest my savings — or anyone else's savings for that matter. After last Friday's IPO of shares in Facebook at $38.00 each, it is already quite clear that this is a big turkey. After the initial [10 minutes] surge to $45.00 the shares fell on Monday and on Tuesday and are now at $31.00 and still falling. Reports are appearing about the total mis-handling of the biggest IPO ever. NASDAQ failed, the underwriting banks — JPM, Goldman Sachs and Bank of America — failed and Facebook failed. Apart from the bad management on the day, it now seems that the public were not told the full truth about the potential for the company in the days before the IPO. Mark Zuckerberg suffered almost certainly from that affliction of autocratic company executives that mentally over-states the value of the company and then comes to believe in their own hype. But the lawyers and underwriters should deal with this. There were, it seems, one or two phone calls to institutional investors but none to Joe Public. I always thought that the initial valuation of this company seemed over the top. Everything suggested the price as way to high. What do they do to make money? They sell advertising. They do not make a product which has a defined demand — unlike Apple, for example. But what do I know? I am not one of the financial wizards that understands all the jiggery-pokery of the banks and markets. New pundits are appearing from the woodwork who are suggesting that the true value of the shares is really less than $10.00 per share. So all those punters who have invested their hard-earned cash are in for a shock-horror loss. The authorities in the USA are launching an enquiry.

Here we go again. Everything involved in an IPO for Facebook or any other new company involves payment of buckets of money to the investment bankers; these people who have such sophisticated expertise that the need to be paid millions of dollars per year to stay on board. And here again, they will walk away with their multi-million dollar payments and leave the wreckage to be picked up by the government or the public — or both. It is not possible at this stage to "borrow" Facebook shares and short sell them but any investment fund that has bought even small holdings in Facebook is seeing its shares borrowed and short sold. One such investor saw its shares fall by 25% on Monday — bringing a nice little profit for some hedge fund managers.

While all this nonsense is carrying on, we have another meeting of Euro-leaders gathering today with more bags of sticking plaster to stick on the Greek debts. They really are useless. They are in the depths of a catastrophe which was perfectly predictable — ie, setting up the euro in the first place and then waiting for it to collapse into chaos — and now they will do nothing to face up to reality and a proper solution. The euro must go. It will be chaotic but they must do everything they can to minimise the chaos. Hiding away from it will not do. But the reality is that they are afraid of [1] loss of face for introducing the absurd currency in the first place, [2] the consequences of a potential Europe wide collapse, [3] Germany does not want its exports to become more expensive —as they would if the country reverted to the Deutsch Mark — and Germany pays all the bills. But how long will German voters go along with a system that demands they work harder and harder to bail out the Greeks? And as they float along lost in the fog, the world's economies flounder. There is no growth, the currencies are all weak, the debts are astronomical and growing and world unemployment is getting worse. Everyone wants growth. But in this system, growth means taking on more debt.

So, can anyone suggest a good investment for my hard-earned cash?

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Buy An Olympic Torch

Is there no end to the absurdity of the Olympic Games. High on the list is, surely, the nonsense of the Olympic Torch. The idea of parading the Olympic Torch around the host nation was dreamt up by the German government for the Berlin Olympics in 1936 in order to boost the image of the Nazis and the Master Race. This torch thing for the 2012 Olympics is being carried over 7,000 miles around Britain and, apparently, needs a team of 350 people, lots of police, several vehicles and a couple of dogs to "organize" the trip. It is an honour, we are told, to be selected to carry this torch for a few hundred yards and anyone so honoured can buy their torch at a reduced price of £250.00. Some have bought them and immediately stuck them on e-bay with prices from £500 to £150,000. The highest figures are I think, intended to be part of money raising for charities. I know that the Olympics these days is all about extracting money from ordinary punters, while the suits and the hangers on and the officials and the politicians and Sepp Blatter and his crew get complimentary tickets to all the main events, 5 star hotels and chauffeur driven cars. In fact it is so corrupt that many of the people paying for the whole shebang can't get tickets at all — unless they are bought abroad. I will be glad when the whole sickly business is over and forgotten and we just have the memory of the empty stadiums left behind and various committees trying to think of some possible future uses — in the manner of The Dome

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The Crisis Heads for the Soup Kitchens

It has not been a very good week. Even the world's great leaders will acknowledge that. And I think that we are in for a few more not very good weeks. It now looks as though we are in the depths of the worst financial crisis in our history. Things are so bad that it is almost impossible to judge just how bad. The numbers being mentioned associated with debts in Europe and the USA are huge; billions are being replaced with trillions and multipliers ease ever upwards. I have no confidence in the world's leaders to sort out the mess. They are overwhelmed by the chaos but will not admit that the mess is insoluble. Or at least it is insoluble as long as politicians continue flogging the same dead horse in order to avoid accepting that previous decisions were wrong. There are two overwhelming failures. [1] They failed to see the looming disaster as economies and governments were financed by ever increasing debts and there was a complete and utter failure to regulate the banks. And [2] the invention of the euro. The latter was like piling everyone into bus, setting off down the road, tying up the driver and then waiting to see how long it would be before the bus crashed.

This week there has been increasing evidence of an accelerating run on the Greek banks. The Greeks are withdrawing their money and transferring to German bonds. How this will pan out is difficult to judge. Presumably, if this continues the Greek Banks will have to be supported by the ECB which will be supported by the German government using the money invested in German binds by the Greeks!! And, in the meantime, Greece has no government. An interim government headed by a judge will lead a sort of administration until new elections are held in June. Does anyone think they will get a different result? Are Greek elections like Euro Referendums in which electorates are asked the same question over and over again until they come up with the right answer? The Greeks are protecting their cash in preparation for Greece leaving the euro-zone. And momentum is building in Spain as 16 Spanish banks have their credit ratings lowered. Interest rates on Spanish bonds are heading towards 7% which means they are on the brink.

Britain is also in a terrible position because we have too many very big banks with lots of rubbish loans piled up, hidden away, in the deepest of deep vaults in the hope that nobody will notice. If Spain, Portugal and Italy go down the tubes our banks will be near collapse. Our government is waffling on about cutting our debts but it is not. All it is doing — even if it succeeds — is slowing the rate of increase of debt. If all goes well, by 2015 the government will have increased government debt by no more than about £700,000,000,000, which is pretty impressive and scores a good 9 points on a scale of 0 to 10 on a chart of debt reduction failures. But bad as this is, Labour wants to abandon debts "reduction" and go for growth by borrowing even more. This even worse than back of fag packet economics. Soon, fag packets will be unobtainable and we will need a new work surface for dodgy estimating.

Greece and Spain have huge unemployment rates — which in each case increases the government debt burden — and queues are growing at soup kitchens. It is reminiscent of USA in the 1930s and it took a world war to cure that problem, in spite of the best efforts of FDR [President Roosevelt].

To add to my gloom, Bolton Wanderers were relegated from the Football Premier League last Sunday when they failed — as they have done so many times this season — to hang onto a lead at the end of the second half. How they will get on from here, I do not know. They have eleven players out of contract this summer, have huge debts, will need to cut their wage bill and need to find some very high quality cheap players to help escape quickly from the Championship. It is a daunting prospect! Are they up for it? I hope so.

Eric's mum is practicing making vast amounts of soup at very low cost ready for the next crisis in our economy. I don't think that the inexperienced rich boys in charge understand the concept of queuing for soup.

Unfortunately, Winston Churchill is dead.

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Olympic Insanity

I ought to give up on the Olympic Games but hardly a day goes by without some new piece of nonsense that leaves me both depressed with the ludicrousness of it all, with the pathetic exaggeration of the importance of this three weeks of school sports and with the strange economics which allow the price to go up and up without the cost increasing.

This week, we are, apparently, trying out the security measures for the games. We have radar spy planes flying around, RAF fighter aircraft flying over London, very heavily armed troops and police operating in the streets from Heathrow to Barking. The police are being equipped with 2 automatic pistols each as well as sub-machine guns, gas canisters, security scrambled communication systems — all of which are unavailable for controlling ordinary crime.— and they are all masked. Why? They are not MI5 or MI6 men — are they? But most ludicrous of all: there are to be missile systems installed on the roofs of east-end flats — without the local inhabitants being consulted. Do they seriously intend to fire missiles at something over Central London? Can we expect to see a high-jacked airliner being blown out of the sky over Canary Wharf? The whole thing is utter madness. This security system will cost £1 billion+. Is this included somewhere in the unmoving Olympian Budget of £9.5 billion? I suspect not. On my reckoning we have about £2.5 billion in total to add to the £9.5 billion but I am sure that much of these cost will be lost in such add ons as road repairs, thousands of extra staff at Heathrow, etc. The final cost — if everything is included, is edging inexorably towards my budget of £15 billion. All very well worthwhile, of course and only an old miserable cynic like me would think otherwise.

The BBC has told us that they will show everything. Every run, jump, swim, throw or stand still of the whole 2½ weeks. This ignores the build-up which will drive us to suicide before August.

Oh, to be in England in September when the daises are in bloom

And no more an Olympian feat before our aching eyes doth loom.

This morning, news reaches us that Argentina has put out an advertisement on its TV stations showing one of their athletes taking part in the games but training in the Falkland Islands. Who this pathetic bit of propaganda is supposed to impress, I have no idea. It has not gone down too well in the Falkland Islands of that we can be sure. The government in Argentina is in an economic mess and the president, Cristina Fernandez de Kirchner, has been batting on for months about her country's ownership of the Falkland Islands — which at the nearest point, are some 300 miles off the shore of Argentina and the capital, Port Stanley, is 400 miles away. And the people living in the Falkland Islands want to remain inhabitants of a British Overseas Territory. All of the 2,500 people there are of British descent and the islands have been occupied by the British since 1833. Still Argentina pursuing its claims for sovereignty fits all the criteria for the sort of logic that thinks spending billions on sports days in the east end of London makes any sense.

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