Jobs and profits

Spot the connection:

Here in The Independent:

Lloyds Banking Group delivered another blow to staff today as it unveiled plans to slash a further 15,000 jobs by 2014 in a bid to save £1.5 billion a year.

And here from the BBC, Lloyds shares since 8 am this morning have increased in value from 44.65 pence to 47.95 pence, an increase of 7.38%.

It's an ill wind etc.

We're all in this together (part19)

Not royalty of course. You can't expect Them to behave like we peasants are obliged to do. The Guardian reports:

Prince Charles's income – including funding from the taxpayer for his official duties – rose by nearly £1m last year, according to figures published in the annual review of his activities. His aides insisted that the increases were either not rises at all, or reflected an increase in official visits undertaken at the government's behest.

... Remarkably, although the review indicates the prince travelled 34,000 miles on royal duties in the past year, to the end of this March – 9,000 fewer than the previous year – and halved the amount of foreign travel he undertook, the cost rose by £388,000, to £1,080,000. On a simple cost basis that represents £31.50 a mile, compared with £16.13 the previous year.

Prince Charles's income from grants-in-aid, to subsidise his royal duties, and from government departments, rose by £298,000 to £1.962m. His main income, which comes from the duchy of Cornwall – the ancestral estates of princes of Wales – was up by nearly 4% last year to £17,796,000, owing to profits from his bonds portfolio.

Republican curmudgeons will pontificate about scrounging off state benefits, but enough of such whingeing. Look on the bright side. HRH is doing his best to counteract job losses in the public sector:

The size of the household – 132.8 members of staff compared with 124 the previous year – increased slightly.

Accordingly, let us celebrate this wise and sensible successor to his illustrious ancestors.

The need for 33 Rear Admirals and 170 Brigadiers

So Dr Fox is going to slim down the top military brass. Plenty of scope, according to The Telegraph:

Four Star

Admiral: 2
General: 6
Air Chief Marshal: 3

Three Star

Vice Admiral: 7
Lieutenant General: 9
Air Marshal: 8

Two Star

Rear Admiral: 33
Major General: 43
Air Vice Marshal: 26

One Star

Commodore: 80
Brigadier: 170
Air Commodore: 90

What a lot of military bigwigs!

MPs in glass houses

So what about the pension arrangements of those seeking to diminish the entitlements of honest public servants? The Guardian sets out the position:

MPs have the most generous final salary pension scheme in the country. They get a choice of contribution levels – the more they contribute the more the state puts into their pension. Many people accrue benefits at a rate of 1/80th of their final salary for every year they have belonged to their scheme (or 1/60th at the most) but some MPs can accrue at a rate of up to 1/40th of final salary.

Not so bad. Of course they will be amending it, won’t they? Well, not any time soon:

In this year's budget, chancellor George Osborne accepted the recommendations made in Hutton's report and added: "I believe this House should also recommend similar changes to the pensions of MPs." However, no date has been set for this and there are unlikely to be any changes this year.

Music of the week

Say a prayer for the cowgirl ...

It's another fine mess

From The Observer (here):

Erik Britton, director of City consultancy Fathom, said: "It's not the direct exposure, it's the indirect exposure and the implications of an unruly default that I would be worried about. French and German banks bought Greek bonds, and they took out insurance against default. Who did they take out that insurance with? The US and UK banks. There has to be a loser – who's the loser?"

Somehow, I suspect that it will be the poor bloody taxpayer.

End of an era

So farewell Habitat. To people of my generation, you set new standards in furniture and kitchenware. In the 1970s, when I was setting up my first home, Habitat was the place to go to equip it. It was considered stylish, not too expensive and good value. Above all, it was a refreshing change from the boring, shoddy, over-priced crap that was previously available from department stores.

So some of us will remember Habitat fondly.

In praise of John McEnroe

If it were not for McEnroe and Becker, the BBC's coverage of Wimbledon would be unwatchable. The alternating fawning and patronising by the rest of the vast team assembled by the BBC would put you off tennis for life.

Surely, Miss Wade could be pensioned off. And Sue has probably seen better days. And does Lloyd not have better things to do. Meanwhile, the BBC's jack of all trades, Mr Cottar is as useless at tennis as he is at rugby and golf.

Recipe of the week

Stuffed Peppers
(serves two)

Ingredients

Half a pound of steak mince (or 250g if you insist)
One onion, chopped into as small pieces as possible without cutting your fingers off
One small tin of chopped tomatoes
Black pepper
A generous pinch of basil (dried will be adequate; but if you members of the bourgeoisie wish to deploy leaves from a twig, I can live with that)
A couple of squeezes of garlic puree (or a garlic clove if you are prepared to faff around eviscerating it)
Two large peppers (I prefer red ones for aesthetic reasons but any colour will do)


Brown the mince in a saucepan with a lid. Then add the onion and give it a couple of minutes until it goes vaguely translucent. Then add the pepper, basil, garlic and tomatoes. Simmer on a low heat for half an hour. Remove from the heat and allow to cool.

Remove and discard any pepper stalks. Cut the peppers in half lengthways. Hoik out the seeds and the white stuff and discard. Ladle the mince sauce into the peppers. Cook (mince side up) on a baking tray in a pre-heated oven at 190 degrees for 45 minutes, then serve. Enjoy.

(Freezes well; after defrosting, reheat in oven for 20 minutes at 170 degrees.)

Quote of the day

In The Telegraph, Clive James ruminates on The Kennedys:

It wasn’t that lousy. It was just terrible, in the sense that terrible was all it was. Watching it wouldn’t necessarily give you any disease more dangerous than a weeping case of pink-eye. There are some who say that a full hour’s exposure to the script in its raw form would be enough to induce full-blown ebola, but by the time the thin banalities of the text had been plumped out with set decoration and acting, what unfolded on screen was merely a cause for despair, not for writhing on the carpet with a melted spine and your brains running out of your ears.

I guess he didn't like it then.

Economics for dummies

It may be written with the US in mind but much of it applies to the UK:

Another day, another bail-out

One of the principal problems with the establishment of the euro was that the system lacked a redistributive mechanism whereby the richer parts of the zone would transfer resources to the poorer parts, thus equalising the economic disparities within the eurozone or, at least , preventing them from becoming worse. It was never entirely true, of course; the structural funds were intended - in a relatively modest way - to do just that. These funds, however, were too modest to make much of a contribution.

Well now the eurozone has found its redistributive mechanism, the bail-out. Ireland and Portugal have already benefited, but the policy has reached its apotheosis in a second bail-out to Greece.

But, I hear you say, this will be the last bail-out; Greece will adopt the proposed austerity package, its finances will recover and the EU will return to its normal self-satisfied routine. Forget it, not a snowball’s chance in hell. Even if the austerity package is adopted and implemented in full (which seems unlikely), there is no possibility that the Greeks can cope with its debts. So next year, the Greeks will be back at the door of Brussels begging for another handout. And, even with the largesse of their own bailouts, the notion that Ireland and Portugal (or Spain and Italy) can develop their economies to match that of Germany is fanciful in the extreme.

So from time to time - annually in the case of Greece, probably less frequently in the case of the others - the northern nations will have to put their hands in their pockets and sling great gobbets of cash towards the PIGS.

The interesting question is how long will it take for the patient taxpayers of Germany, the Netherlands, Austria, Finland to realise that they have been suckered into a massive ongoing subsidy to what some of them might regard as their financially irresponsible counterparts in the South.

It wasn’t supposed to be like this; or maybe it was?

Withdrawal

President Obama’s alleged justification for the pullout of 33,000 troops from Afghanistan is as full of holes as the military’s opposition to it.

The president has been a bit more subtle than Bush’s “mission accomplished” but not much more. The proposition that al-Qaida is “on a path to defeat” seems dubious at best and hopelessly optimistic at worst, while the notion that the Afghan security apparatus is nearly trained and ready to resist insurgency is plainly risible.

On the other hand, the military is still reiterating its mantra of one more push and victory is within our grasp. This is equally daft. Victory is not achievable under any circumstances.

Whatever else happens, Afghanistan will fall apart when the Americans leave. But a continued substantial presence of foreign troops will not resolve the problems and will not bring peace to that corrupt, unhappy country.

So I support the decision to bring back the troops as quickly as possible. If, for political reasons, Obama has to dress up the decision as mission accomplished, then he may be forgiven by history.

Timeo Danaos

Actually, it is not the Greeks we should be fearing. Rather, it is (as ever?) the Germans who are at the heart of the problem.

The current negotiations may well come up with an arrangement which "kicks the can down the road", but given the impossibilities of the Greek position (whose debts outweigh its ability to repay) such an arrangement would merely postpone the evil day.

The least worst solution (call it plan A) would be for the Germans (and their economically strong allies) to leave the euro and set up a new Deutschmark. This would have unwelcome consequences. The new DM would soar against the Mediterranean euro, making German economic domination of Europe more difficult, but making it easier for the Mediterranean countries to compete. (Arguably, this is what needs to happen under any circumstances.) The German banks would be given a severe haircut as the value of their lending to Greece, Portugal, Spain, etc would immediately be reduced as the DM soared (but the Bundesbank could probably afford to bail them out).

If the only realistic alternative to plan A is a continuing bail-out (over a number of years in the future) of our Greek, Portugese, Irish and Italian amici (which is indeed the case), then the German politicians and people might prefer plan A.

Advert of the week

Despite being no great fan of Madness, somehow this ad appeals:

Music of the week

It's not balls

Is a temporary cut in VAT, as advocated by Mr Balls, a bad thing? The Independent thinks not:

... a temporary cut in VAT was exactly the policy pursued during 2009, when the UK was mired in recession. Despite widespread prior scepticism about its effectiveness, the figures show that it did have a very positive effect.

According to analysis from the Centre for Economics and Business Research, an independent think-tank, consumers spent as much as £9bn more than they otherwise would have done during the 13 months for which the VAT cut ran. As a result, retail sales growth accelerated during the downturn rather than collapsing.

All of that extra spending was VAT-able, of course, so the net cost of the reduction was significantly smaller than expected. And that's before one starts to count the wider economic benefits – retail jobs saved, for example – of the spending, which will have produced additional tax revenues.

Not that Slasher Osborne and his little chums will care - they will persist with the masochism strategy. If it's not hurting, it can't be working.

Cynicism rules OK

The coalition's health policy is explained in The Guardian:

Clegg: I love it when we go outdoors together, Daddy. Where are we going?

Cameron: To have our photo taken sitting next to some poor bastard who can't get out of his hospital bed.

Clegg: That's so exciting! What shall I say to him, Daddy?

Cameron: That you love me very much, that I'm a very listening kind of Daddy and that you love my new NHS reforms.

Clegg: I do, I do! But I also loved the old ones that you and Andy tried to rush through last year. That's why I voted for them.

Cameron: I know you did, Cleggster and I appreciate that. But I've done a lot of listening since then and what I've heard is the public don't think I know what I'm doing which is why I'm going to do what the public wants . . .

Clegg: And what's that?

Cameron: Buggered if I know, Cleggster. I've no idea what's in the new bill, but as long as I keep saying we're creating a more streamlined, more bureaucratic, less market-driven, more competitive NHS in which patients have a right to see their GP at any time he or she isn't comparing tenders for healthcare provision, everything should be fine.

Clegg: You're so clever, Daddy.

Lions and tigers

The coalition government has shown admirable flexibility (I'm being kind this morning) over its proposals to tear apart the NHS, as well as those to sell off English forests and to let out early all those prisoners. Meanwhile the social security reforms are crumbling at the edges.

So why is it so stubbornly resisting the imposition of a ban on wild animals in circuses? It is a relatively trivial matter in the grand scheme of things; it isn't even a manifesto commitment (not that that seems to matter anymore). And it's not as though the Tory Party are in the pockets of the circus owners (I think).

It's yet another minor mystery.

We're all in this together ...

... unless of course you're a domestic servant - a cook, a nannie or a cleaner. The Guardian reports:

The government has been accused of betraying Britain's 200-year history in the fight against slavery and of isolating itself on the world stage after refusing to back an international convention protecting domestic workers from exploitation.

On the same day that the work and pensions secretary, Iain Duncan Smith, launched an inquiry by the Centre for Social Justice into tackling the "modern slavery" of trafficking, the coalition revealed it would abstain from voting on the International Labour Organisation's convention covering domestic workers.

The Department for Business, Innovation & Skills said it would not be ratifying the convention to bind the UK by its rules "for the foreseeable future", so felt it would be wrong to vote for it at all.

The UK is thought to be the only member country of the ILO, a UN agency, set to abstain from the vote in Geneva on Thursday.

Shame.

Playing with a stacked deck

The trades unions cannot win. The Guardian reports:

Ministers have taken part in high-level discussions on how to change strike laws should a surge in industrial action threaten to disrupt the economy and future international events, including Wimbledon and next year's Olympics.

There are no plans to alter strike laws, ministers say, but they would reconsider should industrial action get out of hand. Speaking after two teaching unions signalled their members would strike on 30 June, Francis Maude, the Cabinet Office minister leading negotiations with the unions, said that legislation "had not been ruled out".

It's as if the referee in a football match where the Government was not winning decided at half-time that the unions' side should suddenly be reduced to nine men. And of course it helps if the Government also claims to be the referee.

The strike rules were set down (or inspired) by the Tories. But when they don't seem likely to deliver a win for the Tories, then of course the rules have to be changed.

Phew! What a scorcher

Too, too hot, here in sunny Spain.

So it's just as well that this evening I'll be winging my way back to the coolth of dear old Edinburgh and the delights of Stockbridge. In the meantime, I'll sink a couple of pints of Mahou and then get my head down for a brief siesta, before the taxi comes.

It's a hard life, y'know.

Quote of the day

The dear leader (Fathead Eck, for it is he), cited in The Scotsman:

"All I would say to Lord Hope is that I probably know a wee bit about the legal system and he probably knows a wee bit about politics, but politics and the law intertwine and the political consequences of Lord Hope's judgments are extreme, and when the citizens of Scotland understandably vent their fury about the prospect of some of the vilest people on the planet getting lots of money off the public purse, they don't go chapping at Lord Hope's door, they ask their parliament what they are doing about it."

Silly boy. Never a good idea for a politician to attack a judge, least of all one as distinguished as Lord Hope, a man totally immersed in the Scottish legal system. One day, he'll regret it.

Fruity

Man cannot live on plums alone. The Independent reports:

Plums were one of the few items exerting much downward pressure on inflation last month as a widespread increase in the price of food offset a seasonal drop in the cost of air travel, according to the Office for National Statistics (ONS).

The annual rate of inflation, measured by the consumer price index, stabilised at 4.5 per cent in May – which was identical to the rate in April, the ONS said. The older retail price index, which includes mortgage bills, was also unchanged, at 5.2 per cent.

Come on, Mervyn - stick up the base rate by at least half a percentage point.

Useful info

The Guardian provides a useful public service here, by explaining how to de-activate your Facebook account.

I have yet to try it myself, so I can't comment on the chances of success. (I've never really got to grips with what Facebook is for.) But I've tucked away the article for future reference.

Abracadabra!

And thus, as if by magic, Fat Eck and his little chums will have the power to raise capital by issuing bonds.

But will they have the courage? Over the past four years, the SNP administration could in theory (if they had not let the mechanism dissipate) have adjusted tax rates by up to 3 pence in the £. No, they did nothing.

The same administration intended to introduce a local income tax, before it all became too complicated for them and they subsided into a council tax lethargy.

You may suspect that they are demanding extra powers in the hope that Westminster would say no. Now that the wicked witch Osborne has granted at least part of their wish, let us see what happens. But don't hold your breath ...

Disoriented?

Now look, try not to get confused. I'm not the gay girl blogger in Damascus; that's some other Scottish bloke, living in Edinburgh.

Quote of the day

From Tony Blair in The Observer (here):

I would never have used Peter Mandelson's phrase about being relaxed about people getting filthy rich. But should Lionel Messi – or an investment banker – earn more in a week than a nurse earns in five years? You can debate that, but I don't know the answer.

He doesn't know the answer? Here he is, an ex-Labour Prime Minister, and he doesn't know whether a footballer or a banker should earn so much more than a nurse. Amazing.

It might have been more tactful to say "Of course not" and then add some waffle about the inability of governments to control market forces.

Rugby

I have just finished watching on the telly a terrific Super 15 match between two top South African sides, the Bulls and the Stormers. Matfield, Bekker, Spies, Habana, Burger, Steyn et al. Big guys, playing with an intensity that you seldom see in the UK. Sure, they make mistakes, but they don't miss many tackles. And everything is done at pace.

Shortly they will move on to the Tri-Nations. New Zealand, Australia and South Africa. They will arrive at the World Cup, fully seasoned. I can't see any of the Northern Hemisphere teams living with them.

For the record, the Bulls won 19-16.

Honours

So the Queen has made the Duke of Edinburgh the Lord High Admiral of the Navy. Sounds to me like something out of Gilbert and Sullivan.

Still, the kiltie Greek was at least a proper naval officer, albeit many years ago. And it's not as if he actually has to lead our much-reduced fleet into battle.

On a day when it is announced that another old rogue is to become Sir Brucie, we should be grateful for small consolations.

Low finance

I assume that you have not been following too closely the travails of the Greek economy as it edges ever closer to sovereign debt default. It has become increasing impossible to imagine that Greece will ever be able to repay its borrowings. So what is the collective attitude of the EU to this sorry state of affairs? Basically and pointlessly, they intend to lend more money to the Greeks while burying their heads in the sand. The Germans recently suggested that EU governments should not be the only ones to put their hands in their pockets, a suggestion summarily stamped upon by the European Central Bank. The Independent reports:

Jean-Claude Trichet, the president of the European Central Bank, was making it plain yesterday he won't back a restructuring of Greek debt to the detriment of private investors, despite suggestions from the German finance minister on Wednesday that this is what is now necessary.

Now who do you suppose are those private investors? Yes, it's our old friends the banks, mainly French and German, but the Brits are in there too. Nice to have friends in high places, isn't it?

.

It's not all beer and skittles, you know

“The story of the great credit boom and bust is not a saga that can be neatly blamed on a few greedy or evil individuals. It tells how an entire financial system went wrong, as a result of flawed incentives within banks and investment funds, as well as the rating agencies; warped regulatory structures; and a lack of oversight... And while plenty of greedy bankers play crucial parts in the drama - and, perhaps, a few mad, or evil, ones too - the real tragedy of this story is that so many of those swept up in the lunacy were not acting out of deliberately bad motives.”

So it wasn’t all Gordon Brown’s fault. Yes, I am reading Fool’s Gold, Gillian Tett’s wonderful account of “how unrestrained greed corrupted a dream, shattered global markets and unleashed a catastrophe”. Superb stuff. But it can be heavy going. Take this, for example, the simple (it gets more complex later) explanation of derivatives:

“As the name implies, a derivative is, on the most basic level, nothing more than a contract whose value derives from some other asset - a bond, a stock, a quantity of gold. Key to derivatives is that those who buy and sell them are each making a bet on the future value of that asset. Derivatives provide a way for investors to either protect themselves, for example, against a possible negative future price swing, or to make high-stakes bets on price swings for what might be huge pay-offs. At the heart of the business is a dance with time.”

A dance with time? Lovely metaphor. But imagine me, huddled in the shade beneath an umbrella on the terrace of a Spanish bar, temperature in the 90s, the condensation on my glass of beer matched by the beads of sweat trickling down my forehead, reading the fair Gillian on my Kindle and trying to get my head round collateralised debt obligations (don’t ask!).

Worth every moment … I think.

Music of the week

One more time, let us wallow in nostalgia. Tea and oranges, that's what it's all about.

Whingeing

Bankers, eh? It's enough to make you want to force-feed them with bean sprouts. The Telegraph reports their latest self-serving special pleading:

Citigroup analysts criticised the Government's expansion of National Savings and Investments (NS&I) and said that it should instead be looking to reduce the size of the scheme and raise funds through the sale of gilts.

"While the new national savings index-linked certificates appear highly popular with many investors, we believe they are a bad idea for the government: they are likely to prove a highly expensive form of funding and will hinder the important task of reducing the UK banking sector's reliance on wholesale funding," said Citigroup.

The five-year certificates offer a rate of interest equivalent to 0.5pc over the retail price index, giving a yield of about 90 basis points over that of gilts of the same maturity.

The bankers want to pay us peanuts in interest on our accounts and anyone that offers a half decent return is beyond the pale.

The only consolation is that this ill-judged outburst will only confirm the value of NS&I's certificates and thus encourage take-up.

Learning from bowls

Oh the sparkling wit! The incisive jibe! The Scotsman reports:

SCOTTISH Football League president Jim Ballantyne has called for an end to the "bowling club" mentality of the Scottish Football Association when the organisation holds one of the most significant annual general meetings in its 138 year history today.

Aye well. For a start, most bowling clubs are solvent. For a second, they don't encourage their supporters to make a nuisance of themselves. And for a third, they don't regard themselves as the centre of the universe.

Perhaps the SFA and the League might imbibe more of the bowling club mentality - it wouldn't do them any harm.

Pouring petrol on the fire

It is hardly surprising that the IMF is prepared to back Slasher Osborne's misbegotten economic strategy. For their own favourite method of dealing with countries in financial trouble is to insist on massive cuts in public spending and extensive privatisation. The fact that such a prescription only seems to make matters worse is consistently ignored.

And don't imagine that putting the synchronised swimmer in charge will make any difference ...