Random Connections

Today, 7 January, The Automatic Earth did not post a set of links but put up a single article titled "China, Oil And Markets: It's All One Story".  Not too long and readable in clear prose.

It is here and you may or may not agree.  If the writer is right or even only half right we are in for another rough ride and the drivers have lost control of the steering.

In the meantime one item of big news is the coming TV programme about the late Her Majesty Queen Elizabeth, The Queen Mother and the late Duchess of Windsor, Wallis Simpson, born Warfield.  The headline in The Mail said that the progamme suggests they were rivals for the affections of King Edward III or third.

He died in 1377, but Elizabeth was born in 1900 and Wallis in 1896.  I know that theories about people living many lives are in favour at present, but this seemed a little improbable.  But I was reminded that perhaps The Mail meant King Edward VIII or eighth, confirmed by a later change.

They both lived long lives in which near halves of which were a kind of detached existence from what might have been but apart from what was.  So we remember them mostly as old ladies with their respective eccentricities.  I think the programme is fiction and Edward's attentions elsewhere are well known.

Had King George VI lived thirty more years, we might remember Elizabeth as one of the great Queen Consorts of history.  Had Wallis been able to ditch Edward and later play a full part in the war effort she may have achieved another status altogether.

It depends how we see things and this article by Monica Threlfall asks questions about how youth unemployment is measured.  If she is right all those figures we are being given are open to question.  Given the serious doubts now about almost any official figures from anywhere it is difficult to know what to think.

Which takes us back to the article at the top of this post and what is happening in the markets.

Football Crackers

In the football news it has been announced that the English Premiership clubs will be given a lot more money next year for doing the same thing.  There will be no organisational changes.

They will still have eleven on the pitch, substitutes on the bench, the game will still last 90 minutes to much the same rules.  In short the earnings do not relate to any increase in productivity, improved lengths of service or requirement for efficiency.

One has to allow that the clogging and fouling these days is much more skilled and professional than it used to be, the players are far more emotional, which is good viewing for some and it is expected that they will be a lot more sober when they take the pitch.

All is not entirely well however.  The sponsors of Manchester United,  club located in a northern city close to the site of a former engine shed from whence the club derives, feel that the team ought to be more attacking like their predecessors who won so many trophies.

There is a general feeling that the style and the way the game is played typically these days is less attacking, albeit not short of aggression in general violence and disputes with the officials.  It maybe that the technical wonders now applied to analysis has produced an overload of information with adverse effects.

One is the measurement of pass rates, successful or not.  A player who makes a lot of passes that "succeed" may well think that to go for an easy no risk pass that is a plus is preferred to riskier forward passes into the hearts of the opponents defence more of which will not "succeed" and be a minus.

My view is that in general what has happened is that the scientific analysis now available, the higher skills of players and the closely controlled training, much improved organisation and fitter players now mean that defences are far better and harder to beat.

So, as I gaze between my feet at the box, sound off because music on, it is a lot less interesting.  Alpine skiing often has good scenery, golf is green and nobody is bashing anybody, other sports have their moments.  If I want violence there is always the rugby.

Is it possible that the football bubble could burst?  There is a lot of bad news coming out of the international bodies, the actual games are more often a bore than anything and we have had an overload of choice for a little time now.

Could there soon be too many competitions chasing too few viewers and the sponsors looking at best value other than football?

      

Gold Fever

The markets have become jumpy at the figures coming out of China.  All is not well and given the size and power of China in the world economy, if it has problems then we all have problems.

A golden age is beckoning according to this post on the LSE Politics and Policy web site that suggests the inward flow of Chinese money for "investment", aka taking over large chunks of the economy at government urging leads us to a wonderland of Sino-UK happiness and friendship, the high energy prices we will pay will make us all wonder.

The reality is that the UK is to be the port of entry for Chinese trade and influence in the EU.  It explains the duplicity of Cameron and Osborne over the question of EU membership and the role of the UK.  We have promised China we will be their best friends in Europe and we have promised Europe we will deliver Chinese money to the EU.

But where money is you have trading and one form of trading is Hedge Funds and their money is both big and created.  So long as it works.  John Rubino is reported in Automatic Earth, under the heading of "As Hedge Funds go, so goes the world"  as saying:

Quote:

How do you make money in a world where history is meaningless? The answer, for a growing number of big fund managers, is that you don’t. Hedge funds, generally the most aggressive species of money manager, do a lot of “black box” trading in which bets are placed on previously-identified patterns and relationships on the assumption that those patterns will repeat in the future.

But with governments randomly buying stocks and bonds and bailing out/subsidizing everything in sight, old relationships are distorted and strategies that worked in the past begin to fail, as do the money managers who rely on them.

Unquote.

As the UK had now made financial services it's major activity and attraction to money men of the world, it is this rather than actual gold that is involved.  The trouble with money and gold is the markets and the getting and spending are not matters of certainty or things that go to plan.  It is all chancy, note the miner's song in the old musical "Paint Your Wagon", quoted before on Thursday 5 March 2009.

Quote:

Gold Gold Gold Gold Gold Gold Gold

Gotta dream boy

Gotta song
Paint your wagon
And come along

Where am I goin'?
I don't know
When will I be there?
I ain't certain
What will I get?
I ain't equipped to say

But who gives a damn?
Who gives a damn?
Who gives a damn?
We're on our way

Unquote.

The EU began in 1951 with a Treaty of Paris to bring into being a common market for coal and steel between a small group of nations including France and Germany, tired of fighting each other.  Six years later this became the European Economic Community, again largely with heavy and manufacturing industry at its heart.

Now the UK has only remnants of the coal and steel industries and manufacturing industry is very different and in deficit on the

balance of payments.  We buy Chinese steel and many other things.  We do not see much gold and nor are we going to.

Has our government bet the house on the wrong horse yet again?

Picking Pension Pockets

Like the weather the net can get rough in unexpected and unwanted places.  There has been conflict between two sites I look at quite often and it is a pity because the subject in question is important, difficult and affects very many people, namely old age pensions.

Look at it here if you are interested.  One is the blog by Frances Coppola coppolacomment dot com and the other The Slog by John Ward at hat4uk dot wordpress dot com and what it tells me is that the subject is a minefield that can trap anyone.

To get away from the dispute and back to the subject, which is how to adjust and amend the state old age pension (OAP) scheme to take account of modern life and living in terms of what can be managed financially.  I confess that I find all the ins and outs at present difficult.

In 1947 when the Attlee government launched its extended version for all I would agree that it was optimistic to say the least.  Promise now, pay later is one of the fault lines of our democratic politics and in the case of OAP a guaranteed large scale vote loser if hard decisions were ever to be taken and any problems addressed.

But it was and is not just the OAP it is also a feature of many pension schemes, private and public, that promises and pensions of one kind might well become very difficult if trends and obligations out ran payments in, if funded, or estimated costs, if unfunded.

Again what was typical was that when many schemes were created the key data on which they were based were figures or estimates from the past.  As the future unwound it became often the case that these were either in accurate or in fact a bad basis for estimating future liabilities.

One feature was that at the outset what was not thought of was the implication of allowing early retirement schemes for many that often tipped the balance or in the case of OAP large numbers leaving the labour market early or joining much later.

All those students and older pupils do not pay national insurance or much in the way of taxes at one end and those age groups in case being smaller than anticipated while at the other end lives are much longer.  There are other things but this problem is going to be with us for a long time and the one certainty is that it is bound to be an issue in which anger is at a premium.

There is no easy or popular answer.

Letwin Or Let Live?

The recent Apologia Of Oliver Letwin for words uttered and written in 1985 about the riots in London that had occurred has had major media coverage in that by 2015 they are seen in a different light by a new generation. 

He did not think of this at the time and probably did not imagine that documents written then would surface only thirty years later when he was still in politics, now as a senior Conservative Member of Parliament.

Long ago, possibly, fifty years at the time when Harold Wilson was Prime Minister and claiming to have a new techie' government for a new age, I began using "The Department Of Bright Ideas" as a means of defining all the schemes, wheezes and plans that were certain to fail or cause unintended consequences that were adverse.

From the evidence Olly was one of those people who were full of very bright and clever ideas that turn out to be disasters in waiting.  I believe it was him who thought up the initiative in the 1980's to try out what became known as The Poll Tax on the Scots first.  He deserves a hundred lashes for that one at least.

The problem was that he had the ear of the Prime Minister, Mrs. Margaret Thatcher, who really should have seen him coming.  But faced with a lot of senior Tories who were more than an awkward squad she became too reliant on a group of advisers and too willing to try out their bright ideas.

She once said of Lord Young that she admired him because he gave her answers when others could only ask questions.  Given some of Young's prize turkeys down the years she really should have asked a lot more questions or allowed others to do it.

Olly's basic problem was that he was a very bright boy.  With two academic parents, leaders in their fields and with Eton and Trinity on his CV he could talk the talk and write convincing stuff, at least persuasive to those who existed in the air of Westminster.

What caught my eye was that Mum was literary executor to Michael Oakeshott, Professor of Political Science at LSE, who had the dire misfortune to have me on his books once.  He did not quite grasp my theory that Socrates was the great fly half of ancient Greek thought.  He turned down Mrs. Thatcher's offer to be a Companion of Honour.

To return to 1985 and the riots in parts of London what was little understood among senior politicians of all stripes and civil servants for that matter was that the situation on the estates in question was the product of rapid economic and related social change in which those at the bottom of the heap were becoming long time losers with nowhere to go. 

The police saw networks of dangerous and violent gangs, which did exist in those areas and were a cause of trouble.  The academics saw an arena for new theorising and the politicians saw a lot of very bad media news.  It seemed at the time to be a new and unknown threat.  But this had happened before. 

The study of economic and social history will tell of many phases in the past where great change allied with poverty and the movement of people led to conflict, violence and major challenges to the authorities.  Crowded slums with unemployed males create criminal gangs. 

Problems like that of 1985 had happened many times in history with different peoples and with different trigger events in London.  But at Downing Street something had to be said and done fast.  The trouble with Olly is that he and others saw only the moment and the opportunity.  He did not see or understand the realities of the varied local situations then. 

Apologies are now in fashion, sadly trying to understand realities, risks and dangers are not; just as in the 1980's.

Drumming Up A High Note

As well as rising water levels the rain has raised many questions about what governments are for, what their agencies should be doing, who makes the real decisions and how much notice do they take of those people most affected.

There is a long list of items for spending projects at present and no shortage of debate about which might have priority.  The list is growing and the discussions are becoming shriller.  A lot of items have dropped off the radar of the main media but they are still going on.

An interesting example is the proposed new major concert hall for London.  We are said to "need" one in that some major cities have grand new ones which are better than any of ours.  Also, need seems to related to the status of those involved and who will most benefit.

The concert hall project has come up again because Sir Simon Rattle, our Liverpool national treasure conductor of classical music is leaving the Berlin Phil' and is wanted by the LSO, the London Symphony Orchestra, leading candidates for such a hall.

His price includes a commitment to build one.  The present estimate of building cost is less than £300 million, that is just to put it up.  What the annual running costs etc. will amount to is not known.  At present you could run Everton Football Club for that given the deal at present on the table.

These ten questions are asked by Jessica Duchen, the music maker and writer.  She would be expected to be strongly in favour and admits her wish for such a hall.  But she does ask real questions and points to some aspects that do not make sense.

One crucial matter is that she is clear that the money for this will have to impact on other spending areas and there are real costs there which are worrying.  Also, what else could this kind of money be spent one?  She does not actually say "vanity project" but she is not far from implying that this is what it could amount to.

Certainly, having had long experience of going to London venues I would like to see a splendid new hall with all the facilities and technical bells and whistles, but the probable real cost building figures and then running and performance costs look scary to say the least.

The bigger worry that this is just one item and far from being the largest in a long list of projects that will not yield earnings but entail major continuing liabilities for the future.

Sir Simon however can point to the other projects and their costs among them football ones.  West Ham United who are moving into the Olympic Stadium in effect have been gifted hundreds of millions of taxpayer money.  What Chelsea and Tottenham might do at Wembley when their stadia are being rebuilt is likely to be in the same league.

But football now at the top level has become something for the oligarchs and the property and financial moguls.  It has a place in the geopolitics of our time, in that the men involved are close to the persons and pockets of our politicians, the people who build on the flood plains but have stopped dredging the rivers and clearing the drains.

Perhaps it is time for some lateral thinking.  There could be new football stadia in place in London in the near future.  With retractable roofing, the right design and the acoustics taken care of might it be possible for the LSO to ground share with Chelsea or Tottenham or even Crystal Palace?

Could Sir Simon change his tune?

                                

2016 Christmas Message First Draft

So this time last year you thought that 2015 was bad and it couldn't get much worse?