28 March 2014

Something wrong here?

Are we expected to applaud because the Chief Exec is doing the right thing?  The Guardian reports:
Morrisons chief executive, Dalton Philips, has waived his annual bonus after overseeing a collapse in sales and two massive profits warnings in the space of three months.
Despite the retailer's dismal financial performance, Philips was due to collect a £374,000 bonus for meeting strategic targets including the launch of online shopping, 22% of his potential short-term bonus for the year. Half of that would have been in cash and the other half in share awards deferred for three years. But Philips, who is paid £850,000 in basic salary, has chosen not to collect either payout after profits slumped 13% in the year to February and sales dipped 2%.
The company has had a disastrous year; yet Mr Phillips is still entitled to a bonus?  He may be doing the right thing, but the structure of his incentives is surely inappropriate.  As appears to be the case with far too many senior company officials, and not just in Morrisons.

25 March 2014

What to do about Ukraine

Is this pragmaticism?  Or wishful thinking?
The West has, of course, imposed a raft of diplomatic and economic penalties, notably by suspending Russia from the G8. But the telltale sign is that the biggest sticks have been kept in the locker. So far, no sanctions have been imposed on the key sectors of the Russian economy; America and its allies have instead confined their countermeasures to enforcing travel bans and asset freezes on selected individuals. On Monday, they explicitly threatened to target the Russian economy if the Kremlin “continues to escalate this situation”. That phrase is highly significant. It means that if Putin takes the next step and invades eastern Ukraine, then the pressure will escalate. But if he sits tight and keeps Crimea, there might be no further punishment.
So we have reached an equilibrium of sorts. If – and it is a big if – nothing happens to upset the status quo, this crisis could subside. The great risk is that Putin will now decide that his project to challenge the post Cold War order demands the invasion of eastern Ukraine. If that happens, all bets are off. But if he contents himself with keeping Crimea, the steam might go out of this crisis.
Makes some sort of sense to me.  But what about the question of moral hazard: should Putin be allowed to get away with the annexation of Crimea?  And what happens the next time he tries it on?

No easy answers.

Getting desperate?

Our esteemed Prime Minister (here):
TAX EXPERTS yesterday welcomed David Cameron’s ambition to lift more people out of inheritance tax if he wins the next election.
The Prime Minister said he intended to “go further” with the inheritance tax threshold, set at £325,000 since 2009, to make sure most homeowners escape the levy.
“Inheritance tax should only really be paid by the rich. It should not be paid by people who have worked hard and saved and who have bought a family house,” he told a Saga event in Peacehaven yesterday.
If people with an estate of up to £325K and more are not rich, how does the PM define poor?  And it is not the people "who have worked hard and saved and bought a family house" who pay the tax; rather it is their heirs.

Besides, he made a similar promise before the last general election but abandoned it when it came to the crunch.

24 March 2014


Does this guy know his geography?  The Guardian reports:
Nato's most senior military commander said on Sunday that Russia had amassed a large military force on Ukraine's eastern border, and warned thatMoldova's separatist Trans-Dniester region could be the Kremlin's next target.
General Philip Breedlove, Nato's supreme allied commander, described the Russian force that began exercises 10 days ago as very, very sizeable and very, very ready.
"There is absolutely sufficient force postured on the eastern border of Ukraine to run to Trans-Dniester if the decision was made to do that. That is very worrisome," Breedlove said.
As Trans-Dniester is located to the south-west of Ukraine, I am at something of a loss how the Russian forces on the eastern border of Ukraine could readily access Trans-Dniester.  Nor would they need to, as there are already 1200 Russian troops located in Trans'Dniester.

22 March 2014

And the band played believe it if you like

The Guardian reports:
Conservative party chairman Grant Shapps says he loves bingo and beer like other "hardworking people" after he was widely criticised over a Tory poster suggesting these were the kind of pursuits that "they" enjoy.
Yeah, sure ...

21 March 2014


I have just watched (on telly) the best rugby match of the season,  Not surprising when the teams featured such illustrious names as Julien Bonnaire, Sivivatu, Ali Williams, Carl Hayman, Morgan Parra and Matt Giteau. To them can be added Lee Byrne, Michalak, Jamie Cudmore, the Armitage brothers, Rougerie, Nathan Hines, Djugashvili, Tomas Domingo, as well as a 15 minute cameo from Jonny Wilkinson.  Clermont Auvergne beat Toulon by 22 to 16.  Either team could have given any of the Six Nations teams a run for their money.

Vern Cottar, the Clermont coach, takes over the Scotland role this summer.  It is perhaps too much to hope that he might persuade Hines (who had a superb match) to return to the Scottish fold.  But if he can imbue the Scottish XV with half the fortitude and spirit displayed by the Auvergnois, we may look forward to happier times for Scottish rugby.


20 March 2014

Always look on the bright side?

Not all of us elderly citizens will be entirely content with yesterday’s budget announcements.
If I were one of those pensioners owning shares in Partnership Assurance, Legal & General, Aviva or Standard Life (which thank the Lord I’m not), each of which has suffered sudden and substantial falls in their values on the stock exchange as a result of the Chancellor’s attack on annuities in yesterday’s budget,  I might be feeling a little hostile towards Mr Osborne this morning.  Indeed, I might wonder if it was legitimate for the Chancellor to make such sweeping changes without any prior consultation.
Nor would I be feeling particularly chuffed if in recent months I had retired and been obliged to take out an annuity, leaving me in a much poorer position than imminent pensioners now not required to do so.
I might also be irritated at the vagueness as to when all the proposed changes will actually be implemented.
I appreciate that into each life a little rain must fall but where are the umbrellas when you need them?  And budgets greeted with initial approval usually end up causing greater angst as their details are revealed.

15 March 2014

We've been here before

Taken at face value, this might kill off the remaining hopes of the Yes campaign:
In a move to help build a united platform in favour of greater devolution from all three UK parties, Cameron told the Scottish Tories it was a "blatant" nationalist myth that a no vote would mean the end of the road for further powers.
"Let me be absolutely clear: a vote for no is not a vote for no change.
"We are committed to making devolution work better still, giving the Scottish parliament greater responsibility for raising more of the money it spends," Cameron told the party's spring conference, which has attracted a record number of 1,100 delegates.
"So here's the recap: vote yes – that is total separation. Vote no – that can mean further devolution; more power to the Scottish people and their parliament, but with the crucial insurance policy that comes with being part of our UK."
Could we trust the Tories?  They have previous form.  In 1970, they promised devolution but failed to deliver.  In 1979, they promised devolution but failed to deliver.  Since then, they have opposed devolution at every step.  I rather think that we will need more detailed evidence of commitment before we can take the Tories at face value.


Black day for the Co-op

Who would have thought that the dear old Co-op would have got itself into such a mess?  The Guardian reports:
The shambolic state of the Co-operative Group was laid bare in a scathing verdict warning that the survival of Britain's biggest mutual organisation was at stake
The Co-op has been undermined by "reckless" dealmaking, "shocking" levels of debt and governance standards far worse than even the banks before the credit crunch, according to Lord Myners, the group's senior independent director who was charged with overhauling the boardroom.
Myners said the Co-op had lost almost all the customers it picked up when it bought Somerfield in 2008 for £1.6bn. He said taking over the Britannia had almost bankrupted the Co-op bank and the attempted Lloyds deal, codenamed Project Verde, was misconceived: "Somerfield was reckless. Britannia was reckless. Verde was reckless."
The Co-op bosses may not be the only guilty parties,  With regard to the Co-op bank, what were the regulators doing, when the Britannia takeover was going through?  And why was the Verde deal allowed to get as far as it did?  And what action did the company's auditors take?


08 March 2014

A minister for the high jump at the next re-shuffle

The Independent reports:

Downing Street has been forced to check how a foreign-born nanny employed by David and Samantha Cameron came to be a British citizen, after a back-firing speech by a Conservative MP.
James Brokenshire, the newly appointed immigration minister, gave a speech this week which appeared to blame the “wealthy metropolitan elite” for jeopardising the employment prospects of working-class Britons by employing foreign staff.
The Camerons have never made a secret of the fact that they employed a Nepalese-born nanny, Gita Lima, who has worked with them for years and moved with them into Downing Street.

There's no accounting for stupidity ...


07 March 2014

Ne'er cast a clout 'til February is out

Look, it's no big deal.  Yeah, I wore my shorts for the first time this year.  But I'm far from a George Clooney lookalike,  So don't get excited.

The legs were not too peely-wally, given that they have not seen the sun since last November.  Amd maybe the trendy lilac semmit did not quite match the green shorts - but it's too hot to care.


Not all bonuses are bad

So John Lewis is to pay its staff - all of its staff from Chairman to shelf stackers - a 15% bonus this year, reflecting improvements in its performance.  Good for them.

But, if a successful company like John Lewis can get by with bonuses of 15%, why do high heidyin bankers need more than 200%?


06 March 2014

Looking after the pennies

It's all your fault, y'know.  You're not saving enough.  CityAM reports:
BRITAIN remains in a savings crisis. A shocking 19 per cent of the public have no savings at all, up from 17 per cent last year, and the average stash put away for a rainy day is a miserable £10,208. The total number of people who felt able to add to their savings actually dropped last year to 14.4m (just 30 per cent of the adult population) from 14.8m the previous year, and 54 per cent of people surveyed by Scottish Widows said they were saving less than they did two years ago. Just 12 per cent of people have more than £50,000 in savings.
It is clear that individuals, when at all possible, need to accumulate more financial assets. As incomes start to grow again, as much of the increase as possible ought to be put aside, rather than be spent on consumer goods; this process would depress domestic demand for years to come but is the only way the economy will ever be rebalanced. Tragically, it won’t happen.
A lack of trust in the system is one important explanation. People simply don’t believe the government – and politicians of all parties – when it comes to long-terms savings and pensions. They worry, with good reason, that the rules will keep changing; they are afraid that savers are an easy target and that they will eventually be hit by a wealth tax if the national debt continues to grow; and many therefore say that they prefer to invest in property instead. Many also distrust the financial services industry.
As a simple soul, my view is more pragmatic.  Why put your money in a savings account paying peanuts in interest and watch its value frittered away by inflation?  If you have any spare cash (which is a big if), better to buy shares in National Grid which will deliver an annual dividend payment of over 6%, more or less guaranteed - it's as least as safe as houses ...


Do the banks care what people think of them?  Obviously not.  In fact they couldn't give a toss.

Look at Barclays:
This is what "pay for performance," as practised by Barclays, looks like: in a year in which profits fell by a third, shareholders' dividends were flat and the share price went sideways, 481 employees collected £1m or more. That was 53 more than in 2012.
At the top of the tree, eight individuals got more than £5m, and another 54 earned between £2.5m and £5m. Again, those tallies were higher than in 2012. Overall, the bonus pool was increased from £2.2bn to £2.4bn.
If this division of spoils – bumper hand-outs for senior staff while shareholders get scraps – strikes you as a distortion of capitalism, you are not alone. Even the Institute of Directors, the bosses' club, is flabbergasted that Barclays has the nerve to hand out bonuses worth three times the dividend pay-out to shareholders. "For whom is this institution being run?" it wonders. Quite.
Then there are Lloyds and HSBC:
Bailed-out Lloyds Banking Group and Barclays have handed their bosses almost £1m in shares to sidestep the new rules from Brussels which are intended to clampdown on bankers' pay.
Similar handouts, which have become known in the City as "allowances", will be given to about 1,000 staff at Barclays and some 75 bankers at Lloyds. Barclays is facing outcry about its increased bonus payouts, which are being awarded despite a sharp fall in profits in 2013.
Barclays has agreed a £18,000-a-week shares payout for its chief executive Antony Jenkins, who earns a salary of £1.1m a year. Lloyds' boss António Horta-Osório is getting almost the same size allowance, after receiving a total pay package of £7.5m last year.
The new allowances at Barclays and Lloyds follow a move by HSBC last month to hand its boss, Stuart Gulliver, £1.7m in shares a year to get around the bonus cap, which the EU introduced on 1 January and the chancellor George Osborne is fighting in the courts.

Amazing to think that the bankers keep on getting away with it.  At least the EU is trying to bring them to heel.  And from our own dear government: not a cheep ...

05 March 2014

A faraway country

Do politicians have to sound so pompous?  The Guardian reports:
Hague sounded stern and determined as he deplored Russia's actions. As Douglas Alexander, his opposite number, would have been saying precisely the same thing had their positions been reversed, his contribution was limited to trying to embarrass Hague that the Tories' inaction plan had accidentally been leaked in a photograph the day before.
Hague batted this one away. "I want to make it absolutely clear that anything that is written in one document that is being carried by one official is not necessarily any guide to the decisions that will be made by Her Majesty's government. Our options remain very much open on this subject."
Except the only options the government was presently considering were the same ones as before: not sending government representatives to the Paralympics and slowing down visa applications for Russians. Hague did add there could be some more options on Thursday after the EU summit. He might even cancel his trip to see the Bolshoi Ballet. Or something. Putin must be terrified.
Easy to mock, but nobody else seems to have much of a clue about what to do.

And your point is?

I grow ever more weary of nutritional advice.  Here is the latest:
A diet rich in meat, eggs, milk and cheese could be as harmful to health as smoking, according to a controversial study into the impact of protein consumption on longevity.
High levels of dietary animal protein in people under 65 years of age was linked to a fourfold increase in their risk of death from cancer or diabetes, and almost double the risk of dying from any cause over an 18-year period, researchers found. However, nutrition experts have cautioned that it's too early to draw firm conclusions from the research.
The overall harmful effects seen in the study were almost completely wiped out when the protein came from plant sources, such as beans and legumes, though cancer risk was still three times as high in middle-aged people who ate a protein-rich diet, compared with those on a low-protein diet.
But whereas middle-aged people who consumed a lot of animal protein tended to die younger from cancer, diabetes and other diseases, the same diet seemed to protect people's health in old age.
You've got to die of something, right?  And, as we are no longer being cut down by bubonic plague or consumption, it has to be something else.  So I will carry on with the bacon and eggs.

01 March 2014

Odd socks

I'm watching the Southampton-Liverpool match.  I am intrigued to notice that the Liverpool team are wearing odd socks, in that the top of the left sock is of a much deeper blue than the top of the right sock.  The entire team is outfitted in this way.  If you don't believe me, check it out on Match of the Day later tonight.

How did the team authorities ensure that the socks were worn the right way around?  I find it difficult to imagine the manager stressing to the team before the match to remember that the lighter blue sock goes on the right foot.  That pre-supposes that footballers know their right foot from their left.  And, anyway, are there no rebellious spirits in the Liverpool team prepared to defy conventional thinking?

I guess that it will remain one of life's minor mysteries ...