Wednesday, 17 September 2014

A Serious Item On Oil





The question of oil is one of the central issues at the heart of the Referendum debate and the case made by the N56 body of Aberdeen that the prospects are optimistic is at the centre of the Yes campaign.

Euan Mearns of the former Oil Drum site and an oil man has taken a hard look at this in the context of what is involved in drilling and taking oil and does not agree.

This item suggest that the figures simply do not stack up in reality and we are talking in trillions of pounds.  It is an intricate read and it would be as well to look down the comments where a number of experts do add to the debate.

As someone with a long memory, I can recall major sectors of the economy in the past now gone where optimistic politicians and government advisers foretold futures that did not happen.

The common feature was that there came a time when issues, some predictable, many not, led to contraction and losses and with it decline or the need for costly state support or worse.

Referendum Money Matters





Later today Cameron will reveal his grand plan for a new HST line to be built from Stranraer to Stornoway, with extensions to Skibbereen, Mount Snowdon and as an afterthought, Spennymoor.  The SNP will counter with a proposal to extend the Edinburgh tramline to Tobermory.

The SNP will cap this with a demand that all algorithm driven high frequency trading in Scottish funds will only allow gains for Scotland.  All losses will be borne by England.  After five minutes with his media adviser Cameron will agree.

Clegg will beat this with a promise that no Scot will suffer any losses from dealing in stocks or shares, property deals or related financial affairs and payday loans.  These will be borne by England.  The SNP will counter this by demanding that no Scot should suffer losses in gambling with English betting firms.

Cameron will spend another five minutes considering the media impact and will then agree. Miliband will promise that a Labour government will extend this to Scottish firms, internet and others and no Scot will suffer any losses at all for any reason.

The SNP will claim that this is bullying the financial services sector in Scotland to accept English domination and control.  The answer will be total nationalisation of the financial sector with the Bank of England, founded by a Scot, accepting responsibility for any and all deficits.

Perhaps not, but it makes more sense than what has been going on.

Tuesday, 16 September 2014

Jihads For All





To those of us, unlike our political masters, whose memories go back longer than last week and have thumbed our way through the odd history book during the more boring football on TV, Jihads are nothing new.  They were a regular feature of Empire and British activity in the relevant parts of the world.                                                
The means adopted for control were not a matter of proclaiming our later ideas of human rights or tolerance or trying to appeal to better natures.  Generally, it meant meeting fire with fire, prompt vigorous response, determination and a willingness to use force and weaponry.

One way of dealing with them is shown vividly from this brief clip of the film "Khartoum", and Wikipedia has a useful article on the film and another on the subject of the film Major General Charles George Gordon, who lost his life as a result of messy politics and bad logistics.  The film does stray from history in places.

This was in Egypt and The Sudan where Britain's expansion in the 1880's led to wars and conflicts.  In the Sub Continent of British India it was a continuing hazard for internal security and peace given the many and various differences of faith, loyalty and tribe.

Our present problems are twofold.  One is our dependence on oil from the Middle East in terms of the world economy and our own trade.  The other is that in importing numbers of people from both this area and the Sub Continent necessarily they bring with them all their diverse ideas and beliefs.

The notion that all that needed to be done would be to pass laws about rights and such and talk endlessly about community and living happily together ever after was always a nonsense given the histories, extended families and beliefs of some.

Conflict was not something from the distant history of the Crusades.  The TV series "Jewel In The Crown" did have the troubles of the 1940's as a theme in its relating the collapse of Raj in India, again as something past and limited.

It has always been there, always will be and is an important and continuing part of those societies, although a small minority.  To date we have bought off the worst by making concessions, not asking questions or interfering.  This was never going to last.

Now the time has arrived and not only do we not know what to do, but the old ways cannot be used and we have blocked many preventative options that would help.

Something will have to give.

Monday, 15 September 2014

Black Swans For Sale





Recently there has been a lot of hopping about from one leg to the other among the financial and economic parts of the net.  Many are worried, but the ways things are there are always worries.

There is talk of Black Swans and systemic shocks and areas of unpredictability that could deliver downturns, major upturns in interest rates, liquidity going haywire and out of control and other creatures from the deep.

A typical piece on the lines of "it's me nerves, doc" is from Zero Hedge which has some interesting takes on pessimism and lack of trust in governments and central banks.   Anything could happen anywhere.

With the awareness in recent years of just how complex and intricate all the parts are in the global trading and money systems there has been a relentless search for potential trigger events.

The result has been a long list any of which can pop at any time and as most, if not all, are linked quite how the mechanics of will go becomes less possible to estimate as the crisis ripples out and affects more and more.

The great thing for those of us who rejoice in financial crashes because it makes life more interesting is that you do not know that a Black Swan event has occurred until it is too late.

And the markets have gone into a flap.

Sunday, 14 September 2014

Thinking Inside The Box





During the Referendum as the date came closer it was intriguing to see not what was being said but what seemed to be absent from discussions.  In the land of the lairds who own vast lands they went strangely missing.  Why the almost deathly quiet on their part?

One reason may be the instinct for self preservation which has served them well down the generations.  This may be that during all the upheavals of the past they have mastered the art of staying on top when things mattered.

Another may be that the wealth they command is mostly located in Trusts and Tax Havens and has been for some time.  During the age of high taxation in the mid 20th Century the UK developed a network of tax havens linked to The City of London and the elites, especially the lairds, others and celebrities were quick to take advantage.

So when there is talk of the finance sector being a major feature of the new economy, what kind of finance is this and who is at the centre of it?  Who has been talking to and advised by persons from the RBS as it was in its heyday?

Another financial matter is the "Black Holes" in the many and various pension funds, notably of public sector employees.  There was a period in the mid late 20th Century when teachers, academic and some other salaries in Scotland were rather higher than in England and Wales and in final salary systems.

There are a lot of those pensioners around still and the UK governments of recent decades have allowed the liabilities to seriously out run the payments in for both funded and unfunded schemes.  There is a problem here which could turn ugly.

Another issue where almost little has been said except vague comments is immigration.  Possibly for tactical reasons related to voters at the margins it was felt wiser to say little or nothing to avoid annoying groups of recent migrants.  But it will be a major issue come Independence.

At present the SNP avow that they want Open Borders.  If this is assumed to be anyone from anywhere then how many will come and from what cultures can only be guessed.  What will bear on this is how active Scotland will be in bringing people in.  But we do not know what the thrust of this will be.

South of the Border it has become clear that there is an issue.  With London no longer being English and many urban areas having large migrant populations the political parties are having to deal with increasing resistance from many groups who are the ones directly affected and are resentful.  What the common factor is in all these and other issues is the structure of society you finish up with as a consequence.

Looking around the world at the oil states, the finance havens, the places with high inward migration etc. what you have is small wealthy elites above the law, a relatively privileged possibly corrupt and supine middle class, much in the public sector, a small entrepreneurial class avoiding tax as far as possible and a mass of poverty in which social breakdown and criminality are rife.

Welcome to the future of the Atlantic Isles, if it is not already here.

Saturday, 13 September 2014

It It Moves Nationalise It





The debate over the realities of Scotland's economic future has turned nasty.  The SNP now threatens a "day of reckoning" for firms having doubts about aspects of business.  This seems to entail sending in the State Police to take action against dissent.  For BP there is the threat of nationalisation.

All of which tells me of the depth of ignorance and lack of insight of all the politicians engaged in the debate about money, trade, investment and the rest in the second decade of the 21st Century.  The SNP seems to be locked into a Bolshevik mind set from the era of Fidel Castro, Che Guevara and others of that ilk.

In my formative years the State was all controlling and pervasive and we were subject to never ending and often silly propaganda to justify and explain it.  So when The War ended people voted for the political party which thought it right and proper to nationalise what were regarded as the basic industries.

Those left "private" were subject to extensive laws, controls and regulations, notably in the raising and using of capital and in the distribution of what profits remained after taxes and charges.  The bread we ate, the food on our plate, the clothes we wore and much else was State determined and controlled.

In 1945 during the previous 31 years we had ten years of total war, around ten other years of major economic problems and a goodly number of small wars of Empire and foreign conflicts.  We had gone from being the world's banker and creditor to being a major debtor with an ageing damaged economy.

The "people" wanted peace, security and were told that all the basic needs would be cared for and managed by the State in their name and along with this many of the major employment sectors of the economy would be nationalised with the Trade Unions having a major say in decisions.

But the economy had to change and also radical reform and reorganisation was necessary in all of those sectors.  For over thirty years the inherent contradictions and conflicts arising in a State which needed real growth, new industries and major changes across the whole field were at the heart of politics.

During this time the major nationalised industries went from engines of growth and surpluses enabling income and profit for the State to becoming quasi-workhouses existing on subsidies and major support the burdens of which penalised and dragged down the sectors needing opportunity, scope, capital and freedom to grow.

There were different types of industry and activity.  One which was limited to Britain, for example the railways.  Another were those largely British in activity but affected by world matters.  Then there those that had to face up to world competition.

The trouble was politicians and unions who thought they could control all of them in detail when it was all too apparent that they could not and as time wore on and trade and money became more global the damage worsened.

BP is a world company with complex ownership and activity.  It has had a key role in the North Sea but that is conditioned by the market price of oil, world finance, costs, the risks and nature of drilling and the rest.  It could very easily go into the red and who would then subsidise it?

Currently it is in trouble with the USA and facing billions in damages from one bad event in the Gulf of Mexico with a lot more to come.

And this is the key source for all that oil money that Scotland will need for all its futures.

Friday, 12 September 2014

Doctoring The Voters





Our political system is coming more and more to resemble the Mad Hatter's Tea Party of "Alice In Wonderland".  Perhaps if we go to a production it will be more of a retreat to reality rather than enjoying a bit of fantasy.

It is not just Scotland, UKIP, ISIS and the EU that Cameron has to think about.  Although there is a common thread.  That is the National Health Service and all those who sink in it.

In the furthest flung part of England, well almost, in Kent, there is a threat to one of his present Ministers being challenged in what should be a safe seat on the specific issue of the NHS.

Helen Grant is opposed by a local doctor, recently retired, who does not like what has happened in his area and is a member of the National Health Action Party which hopes to field a dozen candidates in the coming General Election.

Here is part of what he has to say:                                                
Quote:

"The effects of commercialisation and the corporate mentality on our local NHS in recent years have been depressing . Tragically we have seen deaths from Clostridium Difficile when past management tried to run down Maidstone Hospital to pay for the new hospital at Tunbridge Wells.

We lost the fight for our maternity unit despite 95% GPs (and the public) being opposed to its closure; totally inconsistent with the Government lies of giving GPs and patients power.

We’ve endured a South African firm running Maidstone’s new Treatment Centre, which was a financial disaster and they haven’t been seen for dust, an audiology outsourcing where the company disappeared overnight, and a psychology privatisation that consisted of patients being telephoned and told to buy a book from Waterstones.

There are many more examples and this will be the future unless this damaging and dangerous policy is changed and those who are accelerating it forward, often for personal gain, are removed from driving our NHS to the cliff edge and over.”

Unquote.

Also, involved with these issues is the major problem of the PFI bill for a new hospital built recently.  This private finance under government policy has loaded mega million liabilities way into the future.  Many other areas have the same problems.

So there is a prospect in some Tory areas of them losing to Lib Dem's, others to UKIP, others to marginal Labour all because of spoiler candidates, such as these Health protestors as well as a loss of their traditional voters.

We could end up with another coalition of sorts unable to agree about much and decide even less on urgent and crucial matters.

And be stuck with it for a five year spell when the economy is going into tail spin.

In the middle of Maidstone is a pub restaurant called "The White Rabbit", perhaps Helen Grant might like to lunch there on occasion.