Peer-to-Peer Lending In The Times
There is a good review of peer-to-peer lending in The Times today. One of the most significant things of the piece is that Google has taken a small stake in Lending club. There’s more on the Google deal here.
The banks might not like it, but the writing is on the wall.
Today, I’ve started to move my working deposit account to Zopa.
A Bail-Out Too Far
The Sunday Times is reporting that because of the big fire at Daw Mill, UK Coal is close to collapse. The story is also here in the Newcastle Journal.
For many decades now, I’ve been against the mining of coal and its use as a fuel. My objection probably stems more from the dangers of mining, the bad disasters of my childhood years and recollections of a few former miners, that I’ve met, and not from any political reasons. When global warming became known, it just reinforced my views that we should get rid of this dangerous and polluting fuel.
If we don’t put UK Coal out of its misery this time, we’ll only be delaying the inevitable for a few years, as some other problem will come along.
A New Superwheat
You’d think as a coeliac, I would not be in favour of the new superwheat developed at Cambridge as reported on the BBC.
British scientists say they have developed a new type of wheat which could increase productivity by 30%.
The Cambridge-based National Institute of Agricultural Botany has combined an ancient ancestor of wheat with a modern variety to produce a new strain.
But I think this is a victory for traditional high-class science. As I understand it, after hearing the scientist on the radio, the combining of the two plants was done using the sort of methods, that have been used for years. Albeit with some clever seed incubation. No direct manipulation of the genes was involved.
So as this could give a yield increase of 30%, what would happen if these methods were applied to the other staple crops of the world.
Sadly, the problem is that, the Cambridge route doesn’t make any money for the big corporations of this world, who feel that the GM route is much more profitable.
I am not totally against GM, but it has to be used ethically and where it is demonstrated that it the only way to create an important product, such as a new cancer drug.
What Shall We Do With The Royal Mail?
I get very little useful mail today and haven’t for about ten years. My friends either, e-mail, text or phone me and all of my banks, utilities are on line. The only important post I get is tickets for various events, I’ve ordered on-line or by telephone and the odd small package delivered by the postman, like my INR test strips.
Most of the rest of the mail is junk usually addressed to the Occupier of my house. Make non-specific junk mail illegal and the Royal Mail would go bust. The worst offenders are estate agents and Virgin Media. I think I’ll get some cards printed, that I can post to the worst offenders, saying they will be charged £50 for wasting my time, if they send anything more.
Incidentally, I do post letters more regularly than I used to, as I have a post box on the corner.
Most of us love the Royal Mail and in rural and sparsely populated areas, I will admit, they do perform a regular social service. But where I live now in Hackney, I wouldn’t even recognise my postman, if I sat next to him in a pub or cafe. We though have a guy, who performs that low-level social service. We have this very accommodating guy, who keeps the streets clean and tidy, with his barrow and he always wishes you a hello and how are you, every time, you meet him on the street.
The real problem, I have is with parcels and packets, delivered by all of the companies and not just Parcelforce and Royal Mail. Usually, they come early in the morning, when I am still here, but often I return to find a card through the door.
Royal Mail/Parcelforce are in a strong position to create a proper on-line tracking service, as they are generally trusted.
You would need to register your name and address on their site, so that if you were getting a parcel delivery, they could send you an e-mail to say it was coming. I know some on-line vendors do this, but it often means logging in to a site and entering a tracking number, which means you have to have on-line skills.
Obviously, you wouldn’t always get an e-mail before it arrived, but you could have standing instructions like leave with number 27 or something similar.
A properly designed system would make it more efficient and probably save the Royal Mail money.
The first courier that gets it right and completes the loop between supplier and customer, will make a fortune and clean up.
Privatisation is not the cure, but augmenting the local link with technology may just be.
Just look at how easy it is to track trains and collect tickets at stations, compared to say ten years ago.
Zopa Goes Automatic
Zopa has introduced a product called Safeguard. Read what Which says about it here. Here’s the first paragraph.
Zopa, the UK’s leading peer-to-peer (P2P) site, has today announced it has created a ‘safeguard’ to pay out to lenders even if a borrower defaults on the money owed.
Having just put some money into the new product, it would appear that the process is now totally add money and accumulate the interest.
The most interesting thing about this product, is why if an independent company can give a rate of return of 5% or so, why can’t the banks?
Go figure!
The Co-Op Gives Up On The Lloyds Branches
Buying bank branches, is a bit like going down Covent Garden Market at the close of business and buying all the fruit and vegetables that has not been sold.
So in some ways the news this morning as reported on the BBC, that the Co-Op Bank isn’t buying the branches Lloyds must divest itself of, is no surprise to me.
Let’s face it branch banking is dead and those that still need a branch, use one that is convenient to them and won’t like being transferred. So perhaps, many have already put their business elsewhere and the Co-op would be buying a few worthless empty shells.
The Co-op’s Chief Executive has said this.
After detailed and thorough consideration of all aspects of the Verde transaction, we have decided, at this time, that it is not in the best interests of our members to proceed with the transaction.
Against the backdrop of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general, the Verde transaction would not currently deliver a suitable return for our members within a reasonable timeframe and with an acceptable level of risk.
So although he’s saying it’s not for the Co-op and giving reasoned views, it would be interesting to see the figures underneath it all.
I also wonder with all the publicity that this proposed deal has generated, if it has sent a message to many bank customers, that the Co-op Bank is a serious alternative and people have moved their accounts accordingly.
So has the deal got the Co-op what it wanted, without any risk whatsoever?
Let’s hope the fallout from this deal, gives us a few new iconic bars and restaurants in those redundant prime locations!
So What Is M-Pesa?
In the post on the Scottish currency, I mentioned M-Pesa. So what is it? I started by reading the Wikipedia entry. Here’s the initial paragraph.
In April 2007, following a student software development project from Kenya, Safaricom launched a new mobile phone based payment and money transfer service, known as M-Pesa. The service allows users to deposit money into an account stored on their cell phones, to send balances using SMS technology to other users (including sellers of goods and services), and to redeem deposits for regular money. Users are charged a small fee for sending and withdrawing money using the service. M-Pesa has spread quickly, and has become the most successful mobile phone based financial service in the developing world. By 2012, a stock of about 17 million M-Pesa accounts had been registered in Kenya.
The initial work of developing the product was given to a product and technology development company known as Sagentia. Development and second line support responsibilities were transferred to IBM in September of 2009, to where most of the original Sagentia team transferred.
It sounds a lot more sophisticated than anything we’ve got here! Especially, as it works on the humblest of Nokia mobile phones!
It’s developments like this, that will empower individuals and kill off the unnecessary wunch, that some still call bankers.
The Scottish Currency Question
If I could have ten pence for every politician, who’s put forward his view on the question of what currency Scotland has if they vote for independence, i wouldn’t be just a rich man, but a very rich man.
Surely, the amount of energy expended by politicians, would power a reasonably-sized city like Glasgow.
All of these politicians are flying in the face of the new reality, which is starting to sweep the world. Just read this article on the web site; SmallBusiness.co.uk about the future of banking. Here’s the first paragraph.
I was recently invited onto Evan Davis’ BBC radio and TV show ‘The Bottom Line’ for a discussion on alternative finance. Alongside me was Zopa founder Giles Andrews, the founder of Zopa – a UK peer-to-peer lending platform, and Michael Joseph, the former CEO of Safaricom, which set up M-Pesa, a mobile payment system, in Kenya.
It is the last bit that is the most significant. It also says this about banking and particularly M-Pesa.
The day-to-day of banking is changing world-wide and banks are not the ones driving the innovation. For instance, by some measures, Starbucks is among the 200 largest banks by deposits in the US, having $3 billion on their in-store card in 2012. Both Google and Amazon are also talking about providing finance to users of their marketplaces. At the other end of the economic spectrum, 31 per cent of Kenyan GDP now flows through M-Pesa, which is so simple it can be operated on a very modest Nokia phone and has no physical bank branch presence.
So does it matter about whether an individual or a company has their bank account in pounds, dollars, euros, thistles or beans? It only matters to the individual concerned. As someone living in and spending most of his money in the UK, I would probably keep my account in pounds! Although switching to euros, should be just a choice on the account.
Unfortunately, this transparent and convenient system would be unacceptable to the banks, as they make so much money on currency conversion.
I do wonder, if my new-found liking for cash, may be a personal reaction to the greed of the banks. If I pay by cash in Carluccio’s, I can leave a tip easily. It also seems to get good service, as the staff in many restaurants know me and have the gluten-free menu ready immediately I walk in. It’s also faster to settle up and there is nothing worse than waiting to get away, whilst a dim waitress struggles with a credit card terminal.
So to me, in a few years time, the Scottish currency question will be irrelevant to most people and companies in Scotland. They will pay their taxes in whatever currency the Scottish government uses or is forced to use and keep their bank account in whatever is convenient for their lifestyle or business.
So let’s get going on research to capture all that hot air being spoken to generate lots of electricity.
We Shouldn’t live Near Petrochemical Plants
In my three years at ICI in the late 1960s, I went over several chemical plants. I have heard so many stories about how supposedly safe plants have exploded killing numbers of people.
On one plant, I heard a tale of an instrument being installed to analyse the gases in a burner. The instrument found that the gases were in such a composition that they might explode. The plant manager immediately shut the plant down and they worked out a strategy to run the plant in a safe manner. They informed the European chemical company from whom they had licensed the design of the plant of what they had found and were politely told that it wasn’t possible to build an instrument that could measure the composition of the gases. A few months later, the European company’s plant buried itself in a hillside.
And then there was the Flixborough disaster in 1974. I had left ICI by that date, but I was in contact with some of my former colleagues and also some other chemical engineers. From somewhere I heard the rumour that one of the problems at Flixborough was that the plant had originally been designed in metric units and then to build it, these had been converted to Imperial. So when they bypassed a reactor, they got the calculations wrong.
Remember that ICI went fully metric in about 1955 for chemical plant design. Safety was one of the reasons they stated!
Now these all go to show, that no matter how careful you are, mistakes will get made. Mistakes you can’t afford to make, when dealing with dangerous chemicals.
Therefore every chemical or petrochemical plant should be assessed for danger and an appropriate exclusion zone declared around it, where no houses, offices or other dangerous plants are allowed.
It would appear that in the latest explosion in Texas, that there were houses too near to the plant that exploded.
Leopards Don’t Change Their Spots
I’ve just had some spam, trying to get me to sign up to Coral Bookmakers.
As I have a betting shop near me and an on-line account, I don’t need another.
So who is the Chief Executive of Coral? None other than Andy Hornby, who is one of the HBOS Three.
Some people never learn, how to run a business!
The Anonymous Widower 