Bob Diamond Has Kept Quiet
In all the pontifications about Stephen Hester of RBS, I can’t find anything that Bob Diamond of Barclays has said.
Perhaps he’s just being sensible or he has not responded to any journalist, who’s asked what he thinks!
could it be a pointer to something? Or if he says nothing, then he won’t have to refute what he said or change his mind.
Who’s To Blame for the Eurocrisis?
I just found this rather deep and thorough approach on the BBC.
To summarise, it says that because France and Germany cooked the books, with Gordon Brown’s help, to get round the Maastrict rules, that it is now acceptable for anybody to overspend.
What Do You Get When You Cross Good Engineering With Good Financial Skills?
February’s Modern Railways magazine has an interesting article about how a whole new lengthened set of trains are being created to work the South West London services for South West Trains.
Currently these services are worked by 4-car Class 458 and Class 450 trains.
For various reasons South West Trains want to go to a 10-car railway, which would mean the simplest solution would be to lengthen the Class 450s to 5-cars and run them in pairs as required. But this would require upwards of about a hundred new carriages and typically these cost about a million pounds each.
But then Porterbrook’s engineers and managers got involved and suggested using the redundant purpose built fleet of 8-car Gatwick Express Class 460 that were surplus to requirements to lengthen the Class 458’s to 5-car trains. This is possible as both sets of trains were built by Alstom to a common design.
So South West Trains will get what they want at a lesser cost and probably earlier too.
The irony is that Porterbrook, is basically a train leasing company and not an engineering one.
So next time you ask, what have bankers done for us, look at a clever piece of work like this. But then it was probably led by engineers who understood money, rather than bankers who understood engineering.
All of the best engineers I’ve worked with always understood the monetary implications of what they did! Some also understood marketing too!
Peston on RBS Bonuses
Robert Peston at the BBC is a financial commentator I respect. His post today, in response to the news that the Chairman of RBS, Sir Philip Hampton, has turned down his bonus, should be read by all. According to Peston, Sir Philip didn’t actually request a bonus in his contract.
Well, the additional reward for Sir Philip was always something slightly unusual, which – as it happens – he didn’t request when he took the job three years ago. This shares incentive had already been agreed in negotiations with another candidate to chair RBS (Lord Davies, the former Standard Chartered chief executive, who ultimately turned the job down), and Sir Philip just attached his moniker to a contract drafted for someone else.
That sounds like a cock-up by the previous government to me.
Peston goes on to have a dig at the lack of talent available and also headhunters, whose interest is best served by high salaries. The first point is proven by looking at how many banks the world are in trouble and the second is well-known to anybody who’s ever hired anybody through a headhunter or an agency.
I think we’ll only know how good Hester and his co-directors are, when RBS is sold off.
More on Stehen Hester and That Bonus
He is a rich man in his own right. If I was him, I’d tell the stupid politicians I didn’t want the bonus, resign and tell them, where to put their job. I would know that I’d done a good job and could take my pick of a lot of well-paid jobs out there.
If that happened, it would cost all the UK Taxpayers even more and who would most politicians blame. David Cameron and the Tory members of this current government, who have nothing to do with this mess. RBS was such a state in 2010, that it should have been liquidated. But Gordon Brown needed the votes! Especially in Scotland!
Zopa In Hard Times
I have been examining my detailed figures on Zopa, the peer-to-peer lending site I use to hold my deposit account money. You’d think that the real interest, I’d be getting would be lower than it was last year, as reading the papers and you’d think that everybody was going belly-up. But surprisingly in January the real interest, which is actual interest paid out, adjusted for any bad debts, has risen by about a percentage point. And I’m still waiting for the big payments that come at the end of every month, around the 25th!
So why could this be?
I think that it’s partly due to the improved lending policy of the company, in that bad borrowers are less likely to be loaned money and over the last couple of years, the dodgy customers have not got loans. And of course for every dodgy customer who doesn’t get a loan, there is more money to lend out to good ones!
Or it could be that those who have loans out with reputable banks and companies, make sure that whatever they do, they make certain they repay the loan?
I do think though, that this improvement will probably apply to all banks and companies that do personal loans in a professional and traditional manner. So as banks are constantly being criticised for not lending enough money could it be that they’re doing the right thing?
To return to Zopa, I also have noted that I have not picked up a loan using their Rapid Return system for eight months. This system allows good loans to be effectively sold on to other lenders.
It may be that I’ve not been lucky in picking one up, but it could be that people like the Zopa rates and would prefer to live off the interest rather than cash in the loans.
I don’t know, but it does seem to me that Zopa is getting to be a better investment and that the majority of the good British public are not as stupid ass they are made out.
Credit Unions
THe BBC is plugging credit unions this morning. I am all for that, as I think they are a good alternative to banks for a lot of people with simple financial needs.
but type in “credit union Hackney” into Google and you get this message.
Hackney Credit Union has ceased trading and the branch has closed.
So not a good start!
Type in “find credit union hackney” and you get some assorted credit check and loan adverts.
You do get this page from Hackney Council, which tells you about credit unions. But it doesn’t give the branches in the borough.
So unless you know about credit unions and where one is located, you haven’t really got much help.
If we want to get more people to use credit unions, then they must get control of the Internet. Especially typing “find credit union” should not get a loan shark.
Credit unions are much more successful in the US, but then they are much bigger with probably more branches. Look at the web site of the Credit Union of Southern California. IT certainly doesn’t look to be a small organisation. Where is the Londonwide credit union?
Could it be that the banks have got their friends in Government to effectively ban them?
Hester’s Bonus
A lot of people are outraged about the size of Stephen Hester’s bonus at the Royal Bank of United Kingdom Taxpayers. I’m not because although he got £963,000 it’s all in shares, which means it’s in his interest to raise the share price as much as possible by running the bank to the best of his ability. After all, there are still quite a few small shareholders in the bank and they would be glad to see their worthless investment be worth something. And of course, there’s the big shareholding in the hands of UK Taxpayers. So if Hester looks after himself with these shares, we’ll all benefit.
But if he fails, we’ll have a worthless bank on our hands, which will probably be closed with the loss of many jobs.
I actually think that it should have been liquidated, but that would have been a disaster for all the small shareholders out there. Gordon Brown couldn’t afford all those lost votes in Scotland. Or in England too!
RBS Charges 2190% for Unauthorised Overdraft
The Sunday Times is reporting that RBS, or as I think it should be called, the Royal Bank of UK Taxpayers, is charging this rate for an unauthorised overdraft.
So the message is don’t go overdrawn if you bank with this wunch of bankers. But as a taxpayer, surely it is not a bad thing if a few idiots do, as they will help to make the bank profitable, so we can pass it on to another set of mugs.
On the other hand, we could bleed it dry, so it didn’t make any profits and then it might go bankrupt after which the liquidator could have their share and then pass two-fifths of five-eighths of fuck all to the government. After all Gordon Brown got us into this position by saving the bank in the first place, so that Scotland might vote for him. It was a good idea, as it looks like more voters north of the border preferred the SNP to Nulabor.
As an aside why is it always two-fifths of five-eighths of fuck all? A quarter would be simpler.
Protests: When’s It Time To Go Home
I haven’t really been thinking much about the protests in the City of London. In truth, I think they are rather pointless, as the power of the City and the bonus culture will be broken in a few years. Or as far as they affect the general public they will.
Just read this article on the BBC web site, which talks about when it’s time to go home.
But why do I feel that the city protests are pointless?
The clearing banks are finished for a start, as new technology and clever web sites will increasingly take over their work. As I say often on this web site, I use Zopa to manage my long term money and get just under 6% before tax. The only other thing I need is a simple on-line banking account to manage my cash and standing orders.
In the next few years other ideas will emerge and many of us will not need a clearing bank any more. As my friend David said many years ago, banking will shed jobs with gay abandon. But the City will create new industries and many will need lots of people like those being laid off by the banks.
An interesting insight was a couple years ago, I found a company organising on-line shopping for the cargo ships that wander the world. It is based near the City because it is close to the skills, customers and companies it needed to setup. These sort of ideas will gravitate to the City if we have the right environment and create jobs and income for London. Why do you think Silicon Roundabout is just north of the City. rather than in Manchester, Leeds or Newcastle?
The Anonymous Widower 