Wednesday, February 11, 2009

This just gets worse and worse.
Competitive pressure is what drives any industry, the entire function of the stockmarket is to force companies to compete with each other not just for customers and sales, but also for investors.
If the mood of investors is to see growth in a sector it is very hard for the managers of a company to resist, if they do they are either ousted by more ambitious colleagues or their firms are taken over by more ambitious rivals.
This can lead to occasional dinosaur-evolution behaviour - where a strand of business evolves up a blind alley until it collapses. The original railway boom was a good example; both the 'dotcom' boom and the computer industry also suffered this fate quite recently.
Most of the time these upheavals are disruptive but not earth-shattering but in certain industries they are known to be potentially damaging to the national interest; and the industries are closely regulated as a result. Defence is one example of this, farming and food production another and banking probably the most important of all.
So regulators in these sectors are not just there to protect consumers and ensure fair competition, they are there to sometimes protect the industry from itself, to ensure that the functioning of the sector is not put at risk by excessive competition or buccaneering behaviour by directors.
The FSA has turned out to be wholly inadequate either at regulating financial services properly (as the latest confusion over 'typical' APR rates has proved) and at keeping an proper eye on the industry. It is becoming clearer and clearer that far from protecting us from the buccaneers who invaded the banking industry, the FSA gave them the keys to their door.
Sir James Crosby was in charge of Halifax Bank of Scotland at the time it was being investigated by no less than two firms of accountants, and the FSA, for potentially reckless lending and unsustainable growth plans when he was appointed by Gordon Brown to be deputy head of the FSA itself.
Unsurprisingly Mr Brown is claiming he didn't know and wasn't told that this was the case, but just to compound his mistake he gave this man a knighthood and made him a personal special advisor as well.
So the same man was running one of Britains biggest mortgage lenders and banking groups, advising the PM on banking, housing and lending policy and running the regulator charged with overseeing it all, including investigating his own bank.
This isn't just incompetence, it's Gordon Brown incompetence.

Sunday, February 08, 2009

Global Warming Continues...
I got caught by the cold weather twice this week. On Monday my car was trapped in London, I have a flat there and the underground car park has a ramp that I woke to find was under eight inches of snow. Some determined digging and a good run up meant I got out eventually. I travelled through the surreal streets of London which at 6am were still almost completely white, no buses, no trains and hardly any traffic - but I managed to get to my client in Basildon on time.
And then again on Thursday as I travelled home I very nearly got stuck all night on Telegraph hill. I arrived where three lanes narrow to two at the top just as the traffic was slowing to a stop in the face of driving snow; my wheels slipped and the car in front stopped and in a moment the entire traffic was stationary. In moments the snow was inches deep on the bonnet and I knew we could be in serious trouble.
Luckily I was only two or three cars back from the summit and happened to have my snow chains in the boot (we are off skiing this coming week) and with a bit of pushing and wheelspinning we got two or three stranded cars moving again, mine included. Once rolling we had a terrifying trundle through the dark down past growing chaos on the opposite (Exeter bound) carriageway including a very scary descent for which I am very glad I had chains on.
The Police were arriving in force as we reached Chudleigh although little did we realise that the chaos on the A380 was dwarfed by the blocked A38 and that it would be many hours before some motorinsts would be home and dry.
The weeks drama reminded me of the very cold winter of 1982 when I had my frozen food business. At the time we had just comissioned a new and very expensive deep freeze cold store and the very day it was completed the outside temperature was actually lower than the coldroom operated at!
So I am afraid I remain a bit cynical about the Global Warming debate. I note that when the debate began it was used to explain the drought summers we had in the late 1990's - then when the weather noticeably cooled off in the UK 'global warming' suddenly meant that the UK would get colder. I can't help be a bit suspicious, when I was a student the 'green' debate revolved about theories that we would be wiped out by a looming Ice age caused by atmospheric pollution blocking sunshine.
I don't doubt that CO2 emissions could become a problem, and we are right to err on the side of caution. I do believe the science of the greenhouse 'effect' has potential; and I think we are right to be concerned about it. We tackled water pollution, litter and smog in the 1960's; we averted disaster over the Ozone layer in the 1980's and I am confident that having spotted the potential for excess CO2 to damage the climate we will act accordingly this time, and in time.
However, I don't think this is an excuse for campaigners to regularly suggest that human civilisation is on the brink of oblivion. This winter, and last summer, might remind a few more of us what 'normal' British weather looks and feels like.

Sunday, February 01, 2009

Gaffe ?

Politicians - well, all serious politicians at any rate, know that have a duty to consider very carefully the implications of what they say to the audience that is going to hear them.

Although politicians suffer from the (entirely healthy, in my view) mistrust from the public at large the fact is that people still look to them for leadership. With the demise of other institutions such as the church and trade unions, this may be because there isn't anyone else; but whatever the reason, it's a responsibility that most senior politicians take very seriously.

And the reason is simple. If a community leader says 'British jobs for British workers' (or indeed, closer to home, 'we don't want to turn Torbay into a jobs agency for Eastern Europeans'...) then there is a danger that it will become accepted behaviour for everyone else to say it, too.

Now when things are going well and there are enough jobs for everyone you might get away with it, but when there is a rising jobs crisis and growing feelings of financial insecurity you have a formula for victimising anyone who is not 'British' and who happens to have a job. And as we know from previous tragic human history, these feelings of resentment can get out of hand very quickly.

So if any community leader legitimises, or appears to legitimise any form of predjudice he is either acting extremely foolishly or worse, calculating to benefit electorally.

I warned that this could be a problem when our own MP made his statement last year that he didn't want to see Torbay creating jobs for migrants and I and many others warned Gordon Brown about his Conference boast about 'British jobs for British workers' would lead to disaster.

The scenes from power stations around the country are proof of what happens when politicians forget to think before putting their brains into gear. I only hope that this particular snowball is stopped in it's tracks, before it becomes an avalanche.