Credit Crunch

I have just been watching the Dispatches programme on Channel 4. Will Hutton explained in layman's terms just how the financial crisis of today actually developed. It did not tell us anything that we did not know already but it did put more flesh on the skeleton and set things out chronologically. What was absolutely staggering yet again was the extent of incompetence and ignorance about what was going on. Here were these financiers - at all levels from CEO to rookie trader - gambling away on a massive scale with our money in order to make themselves absolutely grotesque amounts of money. And yet only a tiny number even suggested that the whole monstrous excess was built on piles of sand. These people, whose greed for more wealth knew no bounds believed that they were so clever that they deserved to be paid sums of money beyond the wildest dreams of ordinary people. And yet, they could not see that their collateralized debt obligations [CDOs] and bizarre financial schemes were based on valueless assets the nature of which had been lost in the swirling merry-go-round that pumped up the bubble of international debt. Orchestrated from Wall Street, at the centre of it all was the City of London, with its almost totally unregulated markets. Here the gamblers could do as they liked and the regulators not only did nothing to stop them but appeared to be totally ignorant of what was going on. How could so many so called experts just say that they did not really understand and that they thought that everything would be OK. Strings of people who were earning $1 million salaries and hardly a one ready to say "Stop!" As long as the money kept pouring into their bank accounts, the truth is that they did not care. It was quite apparent that they despised the ordinary punters on ordinary wages, who ultimately would be asked to bail them out.

But what is being done to absolutely stop it happening again and also, to crush the level of obscene salaries and bonuses? No way should people earning $35,000 per year be asked to provide the resources to let these people carry on pocketing huge payments with no responsibility for the losses. Again, I ask, what is being done? Can anyone give an answer?

Electric Cars

Sometimes I think that I am over pessimistic and that I condemn politicians far too easily. After all they are only human-beings trying to do a difficult job. But then they take another step which reveals that I may have seriously misunderestimated them - as George Bush may have said. This week, we have seen the government holding a cabinet meeting in Edinburgh - no doubt at great expense to us the tax-payers - for no other reason than to offer some soft soap to Scotland in the hope that they will continue to support Scottish Labour MPs. While enjoying, no doubt, their time up there and topping up their expense accounts, two cabinet ministers, Geoff Hoon and Lord Mandelson, went off to Knockhill race track in Fife to be photographed driving an electric Mini. The purpose of this photo opportunity was to publicise the government scheme to help the environment by giving people £5,000 towards the purchase of an electric car. Of course, with so much money involved, the government needs to set criteria that make sure that the cars purchased will be suitable for real practical use. At the moment, the total number of car models available that meet the criteria is ... err, err .............. zero. This situation will probably exist for a few years. When the required cars appear, will anybody buy them, even with the subsidy? Probably, no! Even with the subsidy, the cars will be more expensive than a conventional car, the performance will be more limited, range will be limited and re-charging will require hours and hours of waiting. If that were not enough, every few years they will need a complete new set of batteries at a cost of about £5,000. And when you become fed-up with all of this, the 2nd-hand value will be very adjacent to zero. This is a classic bit of spin. Lots of publicity and nothing to follow it up. What about the Mini they drove? The body is made in the UK but all the mechanics are made in Germany. BMW have no intention of offering this electric Mini for sale in the UK any time soon.

Electric cars may, one day, be the normal form of transport but not for a long time yet. Hybrid cars look like a better option but, even here, batteries are the problem. They are big and cumbersome and have a very limited life; this problem has to be solved before electric cars will ever be more than a gimmick. There has to be a way of getting home under all circumstances without needing hours to fill up with new electricity and the hybrid car does at least overcome this problem.

Now, what about investing our money is some real UK research into tackling the problems? It could help with our new economy based on making things again.

Casey Stoner

What is it about Casey Stoner that makes everyone want to dislike the great racer. He is good; of that there is not the slightest doubt. He can ride that Ducati like no-one can and he has been World Champion. So, what is it? He always seems friendly enough in interviews but he never seems like the man you would want to invite to your party. Perhaps, I will get over it. It may be, of course, that we just resent him beating the GOAT, Valentino Rossi. Casey was a deserving winner in the opening race in Dubai and I think we will be in for a great season of racing in Moto GP.

Relegation & Resurrection

So the Hatters draw with Chesterfield and are relegated from the Football League. It is sad. Did they deserve it? Not really. The fact was that the manager and players were practically doomed from Day One of the season. Since the previous management had contrived to send the club into administration - more than once - and had indulged in some other creative financial instruments, the Football League "fined" the club -30 points at the start of the season. Without this the Hatters would have been firmly in mid-division. What is the point of such a penalty? A club that is financially strapped for cash will struggle to survive anyway and cannot buy the most expensive players to try to overcome a deficit of 30 points. What is an appropriate penalty for a club that runs out of money? Should it be helped to survive or should it be pushed quickly down the drain? Surely, if a club can raise the money to pay its bills, it should carry on as before. If it cannot, then it ceases to exist and if it is resurrected it must start again. It may be that financial irregularity demands a severe penalty. But surely, this system of point penalties is not right?

Many years ago one of the oldest clubs in the Football League, Accrington Stanley, went bust. In 1962 they folded and disappeared completely for six years. Then a group of supporters got together to re-form the club and four years later they played their first game. It was 44 years before they fought their way back into the Football League. But, now their is another cloud hanging over the club following reports of players betting against their own team in a game in which they were playing. I hope it isn't true. The supporters deserve better. There is not much reward in supporting lowly teams that struggle to survive from year to year with limited resources. But a football club is something you are born with. If you were born an Accrington supporter you will die an Accrington supporter. Now the team is in the middle of Coca Cola Div 2 and perhaps the fans could look forward to more progress next year. I wish them well.

For the sins of your fathers, you, though guiltless, must suffer."

Do Something

Within the next thirteen months, we in the UK must have a general election. About 2,000 candidates will ask us to vote for them so that we can elect a party with enough seats to be able to form a government to run this country. Each party will produce a manifesto of wishful thinking and half-truths and will indulge in a festival of spin. If I refuse to vote for any of them on the grounds that no party gives the impression that it could run a chip shop, I will be accused of being apathetic. I am not apathetic. I am just bloody angry. I want to see some signs that there is a group of people who will tell us what they intend to do and how they will govern. There is a handful of politicians who I believe have something to offer - I would include Kenneth Clark, Vince Cable and David Davies and perhaps a few others. But not enough to form a government.

I did not set out to make this site a constant catalogue of moans against the political process but it seems to turn out that way. I have made it clear that the government of Blair/Brown is, in my view, the worst in my life time. Even going back further than that I doubt if there was any government worse. When I have the time, I will type out the catalogue of its failures. This government is the final dying entrails of Thatcherism.

I disliked Margaret Thatcher with a passionate intensity but at least she believed in something. But today, I feel that the whole of Westminster is populated with careless, second-rate politicians who are just potential violinists; people desperately learning to play the fiddle and form an orchestra, so that, like Nero, they can demonstrate their art while the city and empire collapse around them. We have an economic mess the like of which we have not seen in a century and these stupid people hit the front pages of newspapers because [a] they made up pathetic childish stories about opposition politicians and [b] they stand up demanding apologies and letters from the prime minister. Our idols have feet of clay? This lot are of clay from head to toe.

In the name of God, stop behaving like spoilt 5 year olds, get out of the play-pen and do something about the ghastly mess we are in.

What did we do to deserve them?

Water

Sometimes I feel very depressed. Technically, this is not clinical depression; it is merely a feeling of despair and inadequacy as I take note of events taking place from day to day. My depression is exacerbated by what seems an all pervading attitude to any problem that either nothing can be done or that there is only one possible solution - and that is not likely to be a pleasant experience.

Let me consider water supplies.

Mrs Thatcher - one of our great prime ministers, at least, she is if you think that wrecking the country is an indication of greatness - decided that we needed to privatise the water industry so that the efficiencies of private management would transform our water supply system to a wondrous enterprise for the 21st century. Most of the old water companies passed into foreign ownership, not, as you might have expected, to improve the quality of our Victorian systems. No, the primary reason for such foreign investment was that certain people thought that they could make a lot of money. And they did. But following recent dry summers and winters and hose pipe bans, etc., government decided that something had to be done about water leaks from the ancient mains. Losses were over 30% in many places and Thames Water alone was losing 1 billion litres every day through the apparently porous pipes. At the same time, as a result of our equally porous borders Britain, and particularly England, has had a rapidly increasing population with ever greater demands for water. There is now great pressure to do something serious to stop the leaks. Some companies have made progress and much less water is leaking away now than was the case 10 years ago. In some cases the reductions have been achieved by the simple expedience of reducing the water pressure - less water pressure means less leakage. These foreign companies are not particularly interested in whether we have adequate water supplies or not and it is cheaper and more profitable to do nothing.

Now we are being told that we have a terrible future ahead caused by global warming which will severely restrict our water supplies. In some parts of the world this is true - and will be as long as no-one makes any efforts to control population growth. In Britain, the thing that will restrict our water supplies is lack of storage. I cannot remember any really major water storage schemes in the south east - or anywhere else, for that matter - in the last 30 years. No doubt this summer we will have some great storms and many areas will be severely flooded. Think of the south west and the Severn valley as well as parts of Yorkshire. The water will subside and all the water will drain down into the rivers and, ultimately, the sea. We must address this. Every year we will have limitations in supply - in some cases quite severe - because we have had a bit of dry weather and we have inadequate storage.

England has a total surface area of 130,410 sq km and if we assume an average rainfall of 50 cm, then the total rainfall is some 65 billion cubic metres per year. Of this about 5 billion cubic metres is used by private citizens and industry [including nearly 20% loss]; ie about 7.6%. My estimate of rainfall was low, even in a globally warmed England. High ground and parts of west facing land have much more than 50cm in rainfall. I have ignored Wales and Scotland which are both wetter than England. So, the reality is that we use probably less than 5% of the rain that falls on England. We need to collect more of it and arrange an effective distribution system to move water from wet regions to dry ones - primarily the SE. This could be achieved by repairing and extending the existing canal system. It is nonsense to suggest that we have too little water. Down here in Crawley, the water supply system is much as it was 30 years ago and population has almost doubled. Building more storage reservoirs would also help wild life. It is suggested that increasing water supplies increases the need for treatment. In practice it will not. The primary purpose of my suggestion is to guarantee supplies. If population and standard of living rise then more water will be required anyway. It should be an essential of any new building development - domestic or industrial - that systems are included to better utilise water - particularly by making use of surface water which currently goes straight to drain. Britain's water consumption per head is about average for Europe but much less than, for example, Spain and [surprisingly] Ireland.

Of course, all of this would be much easier if all the water companies were in public ownership. But that is obviously a ludicrous idea.

Good Luck To The Hatters

Football is a funny old game as many a pundit has told us over the years but this last week-end showed us at least two extreme meanings of funny. Most of the time football exists only in a private fantasy land where nothing makes sense. For years now it has seemed that an essential requirement for any club keen to climb the Premier League and make it on the international stage has been having an exceedingly rich owner with so much money he could not find enough ways of spending his wealth or one who was prepared to spend much of his lesser fortune to be part of the fantasy land. Then there is Newcastle United. Newcastle United is a basket case, that much is clear. In the last twelve years they have changed owners, gone through a succession of managers who have either resigned in desperation or have been sacked. They had Dalglish, then Gullit and then Sir Bobby Robson. He had nearly 5 years in charge before he had a bad start to a season [2004] and he was sacked. By then the club was being managed by executives and there was much friction between manager, players and owners. Robson complained about over-paid young players, selected by others, who were paid buckets of money before they ever proved their value. Then it was Graeme Souness but he was no good and went following bad results and players fighting on the pitch. Then Sam Allardyce was brought in. But he didn't suit either, even though he had got the best results since Keegan and Bobby Robson. So he was sacked and then we had Keegan Pt 3. But he had to work with a Director of Football, Dennis Wise, who stayed in London but was in charge of buying players. And there were other directors to hinder Kevin Keegan.. So he resigned and is now suing the club. So they brought in Kinnear. He is in hospital for heart surgery - or possibly brain surgery - was he mad to come here and stay? Now its The Messiah, Shearer, to the end of the season at £100,000 per game and the club is deep in the relegation zone. It is amazing that anyone can consider this madhouse as anything other than that. They like their football on Tyneside but I think that they need to go over en-mass to support any club other than Newcastle United.

Then there is Luton Town, The Hatters, the club supported by Eric Morecombe, who yesterday won the Johnson Paint Trophy for clubs of Championship Div I and Div II. Luton, residing 11 points adrift at the bottom of Div II, managed to overcome Scunthorpe who are in 6th place in Div I and looking for promotion. Many commentators are saying that this was probably the best game of football yet seen at the new Wembley Stadium and a great advert for all football. Luton are struggling in their division not because they are particularly bad at playing football. No, it is because they were penalised 30 points at the beginning of the season for going into administration and getting into some shady dealing with transfers. None of this has anything to do with the present owners and management, who, with staggering understanding of reality quite alien to professional football, have cut the wage bill from £5m to £1.5m; got rid of over-paid under-performing players and brought in a lot of young talent - players who are prepared to work for less money to make their careers. The club spirit is good and 35,000 supporters went from Luton to Wembley - not far, I grant you - in order to support the club and boost the coffers. So now they have more money and the Paint Pot trophy. The manager says that they need to win six of the last seven league games if they are to avoid demotion from the football league. A tall order but I wish them the best of luck. They sound like a club that deserves some luck

If I Am Not Very Much Mistaken

I am not one of the greatest of enthusiasts for F1 GP car racing. I am much more a lover of bikes. But the new F1 season looks like it could be one of the most interesting for several years. As I write the start of Race 2 the Malaysian GP is only a few hours away and I am sure that everyone in the UK will want Jenson Button to make it race win No. 2. The win in Australia was real Roy of the Rovers stuff and it is good to see Jenson Button finally able to show his abilities in a good car. After all that has happened, we have to have sympathy with Honda who have spent about $1 billion on F1 with little to show for it. They have even provided the first $100 million for this season and got no credit as Braun became a new team with a Mercedes engine.

I have just been watching an on-line video of Murray Walker who has been the man in F1 for....... well, almost for ever really. His schoolboy enthusiasm has never diminished and he is always a gentleman. That is something to say in this day and age. Listening to him chatting it seems incredible that he is in his 86th year. Unlike most of us the tone of his voice has hardly changed over the years and he certainly does not sound like an old man. Long may he be with us.

And Good Luck to Jenson in Malaya.

Protesting Is Not What It Was

One thing that struck me in the days before and during the G20 summit was the poor quality of the protesters - not as human-beings but as knowledgeable idealists. The TV companies tried talking to various groups on the streets but most seemed very vague about the reasons for their protests. They gave the impression inevitably that they were from Rent-a-Mob. There were some protesting about closing post offices, some unhappy about climate change, some jealous of anybody with money, some were simple anarchists and so on. They had a jamboree outside of the Bank of England and they smashed the windows of the Royal Bank of Scotland but did they get any message across to anybody? Few seemed to have got near the ExCel Centre and by Thursday many had gone home. It was very unimpressive.

Were we as bad as this in the sixties? I think not. We were idealists, possibly misguided but we did have clear objectives when we demonstrated. The only time I remember trouble with the police was when we mounted a protest outside the Locarno Ballroom in Bradford at a time when the management of that establishment stuck up a sign on the doors that said simply "No Blacks" It seems unimaginable now but we did get their policy changed very quickly.

Pictures from an Exhibition Centre

So G20 in London has come and gone and for the next week or so will appear as a great triumph for Gordon Brown. But what has been achieved? The communique, as expected, tells us that everyone will work together in many ways to sort out the problems of the World. Well, we knew that anyway. No one was going to refuse to help in sorting out problems that affect us all, rich and poor. In spite of President Sarkozy's histrionics, no one was going to walk out without looking an idiot. But is there any substance to it. On the whole, I think that the world's leaders have achieved more than I anticipated, provided that they now get on with the various tasks that they have set themselves. Otherwise. there will have been no point in coming to the UK, spending £50 million of our money for the school photograph and numerous snapshots of "Me with President Obama". Putting the system right in the short term is one thing but will they really eliminate the tax haven bolt holes for hedge funds, over-paid financiers and crooks?

But why was it decided to hold this conference in the Excel Centre? A previously anonymous conference centre with fewer attractions than a wet February in Great Yarmouth, it is a windswept monstrosity on the north bank of the Thames, down the East India Dock Road, east of Poplar, in Canning Town. It has the architectural sophistication of an abandoned communist supermarket with surroundings designed primarily, it appears, to use up a surplus of concrete and to collect litter from the whole of East London. From a security point of view, it has advantages, of course, in that the area is usually empty of all life forms. In addition, in these times of collapsing international trade, there is a first rate reminder of the effects of trade disappearing completely in the shape of rows of stationary, unused, dockside cranes. There is also an excellent view of The Dome in Greenwich - another tribute to government mismanagement. Best of all, alongside the ExCell Centre, there are berths on the dockside for the yachts of any visiting billionaire -oligarchs. Hmmm! Perhaps the venue has a lot going for it after all, when so obviously money, gambling, greed and excess have become more important than artistic merit, sophistication and morals.

We will see.