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?
Greece In a Downward Spiral
Not my words, but those of Jason Manolopoulos in an article in The Times today.
This paragraph sums up Greece’s progress to get their economy in check.
The technocrats are nominally in charge and the EU elite is applying plenty of pressure on my country to accelerate reform, but they are discovering that the Greek system is almost ungovernable. It took Ireland just a few weeks to make more progress on cutting back their public sector debt than we have seen in two years in Greece.
And there’s a lot more in the same vein.
The article finishes by saying that an unplanned Greek default and return to the drachma would be catastrophic.
I think I may get hold of Jason’s book called Greece’s Odious Debt.
Everybody else should get hold of today’s Times and read the article, as it has a lot of repercussions for us all. For instance, he claims that the IMF is breaking its own rules, by lending to a country whose debt is above 120% of GDP. nd who’s funding the IMF? We are for a start!
Cherie Blair Moves Into Private Health Care
According to The Sunday Times and the Daily Mail, Cherie Blair is part of an attempt to setup a chain of private one-stop health clinics called Mee Healthcae. Read about it in the Daily Mail here.
The domain, meehealthcare.com, seems to have been registered, but the website hasn’t been setup yet.
The registrant appears to be Gail Lese, a business partner of Cherie’s mentioned in both articles.
What would Mark Serwotka and Bob Crow think?
So Why Is A Credit Rating Important?
According to this report, there is anger in the EU about the downgrading of the credit rating of France and eight other EU countries.
So is this important for the countries involved?
Look at it on a personal basis!
If you have a good credit rating, you can borrow money a lot cheaper, than if you have a bad one.
It’s just the same really.
The only difference is that the rating agencies seem to have a large number of individual ratings, which are meaningless to the man on the Dalston omnibus, unless he’s a banker going home from the City.
Incidentally, we’re going to borrow £180 billion this year. if we were downgraded, that might cost us around £2 billion or even more.
So the downgrading of France has really dropped them dans le soupe! And President Sarkozy says we’re in a worse state than France, but then our rating hasn’t been cut and their’s has.
I liked this comment on The Times website under a detailed explanation of the downgrading.
Had it been us losing our AAA I can only imagine the very high level of spite, malice and vituperation which would be hurled our way from France. The French would have been having the time of their life! Yet the British government has not made any formal comment at all and the on-line comments have been remarkably restrained although I have to admit to just a modicum of schadenfreude.
We may not have made any official statement, but I suspect quite a few of the great and good are laughing in their beer tonight.
RBS Is In A Downward Spiral
This morning RBS has announced another 3,500 job losses on top of 2,000 announced, just a few months ago.
I’ve always felt that RBS should have been allowed to go bust. I think now, that some of the employees who are still left, wish it had happened, as at least they’d now know where they stand. I suspect too, if they’d been put out of work at the time, they might have been able to have rebuilt their lives and careers since.
Now they are just in an awful state of limbo.
The country might be in a better state too, if the money used to prop up RBS had been used for more important purposes.
But saving RBS was just a bribe to Scotland, by Britain’s worst-ever Prime Minister, Gordon Brown. As he got voted out in 2010, it didn’t even work!
Barclays Capital’s Skyscraper Index
This has been published every year since 1999 and according to this article by the BBC, it forecasts economic downturns.
HMRC Scams
I am very lucky in that I can afford an accountant to do my tax returns, so I know that if I get an e-mail from HMRC, it’s a scam.
I’ve had three in the last few days.
This page on the HMRC web site gives details on how to recognise them.
i forward all mine to phishing@hmrc.gsi.gov.uk. This is indicated on this page.
One of the interesting things about these e-mails, is that they were all to an old e-mail address that I don’t use now. I do monitor it, in case one of my old friends hasn’t got my new one.
For financial transactions, I always use a particular e-mail that is not used elsewhere. That means that if I get an e-mail to that address, I check it thoroughly and if say it’s selling me a holiday, I then know that my bank or other financial institution might have been compromised.
Is The Economy Getting Better?
I’m not sure, but there have been some good stories today.
On the BBC this morning there was a piece about how small exporters were doing well.
I know it’s a Japanese car company, but this article on the BBC about Nissan can’t be seen as anything but positive. It’s also in an area of high unemployment, where they need every job they can get.
John Lewis also reported a 6.2% like-for-like increase in sales during the Christmas period. As the company have branches in most parts of the UK, it can’t be anything other than a good thing. Next too is on target, but other retailers aren’t doing so well. But that isn’t necessarily a bad thing, as customers are picking up a few bargains. I bought a new pair of boots from Blacks at a very silly price.
Over the last few weeks, I’ve been to several places on the trains, like Reading, Blackfriars, Cambridge and others, where the fruits of investment seem to be coming through. You can argue, that these were planned by the previous government, but it does seem that progress has speeded up in the last year or so. I will say that some of the developments in the London area, seem to have benefited from better engineering and project management, with the professionals being given targets by the politicians, who then have not interfered at the micro-management level. We could probably do even better with Network Rail, if they were controlled in the same way as Transport for London.
And lastly today, this piece about the pound has come in, showing it has risen against a failing euro. That may not be a totally good thing for exporters, but it shows that the world thinks our economy is on the mend.
The Anonymous Widower 