Softcapitalist

Weak UK productivity cited as main reason for falling wages

2014-01-31T15:11:00.000+00:00

There is no puzzle, it is a consequence of the "economic strategy" pursued by this government. It is inexcusable that large companies sit on billions in cash and run debts to buy shares back while everybody "waits" for the productivity to pick up as if it were either the employees' decision to work harder or a completely uncontrollable phenomenon like the wind. The employers are responsible for it, and the executives must put the cash to productive use.

This government seems to believe that cutting public expenditure will deliver some growth but all it has actually done apart from printing money was to funnel the economic resources into wealth accumulation at the top, mortgages and tax advantages for big business, with the net effect most people are worse off and have more debt.

Trickle down economics is a myth, it never worked and will not work simply because the capital owners have no incentive to pass on any of their gains. The perception that capital owners create jobs and wealth is nothing but a propagandistic metaphor because no products or services can be 'created' without labour. The only question is how fair is the distribution of the gains, and again, the perception that unless they get ever rising profits the rich elite will close the shop and go play golf all day long is false.

Without private and public investments it is impossible to have sustained growth and wide-spread well-being. The taxpayers are being taken for a ride and most people's lives have deteriorated. There is no need for more stats, and the explanations for this economic disaster don't even matter.

The government's 'economic trustworthiness' is a myth which is actually hard to explain, and one wonders what would it take to be broken.

@softcapitalist
www.softcapitalist/blogspot.co.uk

http://www.ft.com/cms/s/0/285f12e0-8a61-11e3-ba54-00144feab7de.html?siteedition=uk#axzz2rzHSUtY6

Poland attacks Cameron view on migrants

2013-12-24T10:23:00.000+00:00

This is not a debate about EU further expansion, nor about the new members absorption of funds - let's keep in mind some 40% of the EU budget goes to agriculture and France, Germany, Spain and the UK are taking the lion's share.

This is about free markets. The UK has to take a liberal or a protectionist stance. Either it supports free movement of goods, labour and capital, or it supports trade barriers, immigration controls and capital flows restrictions. The UK cannot expect Slovakia to hire Barclays Capital for privatisation of its assets, the Czech Republic to allow HSBC to open branches in Prague, or Poland to import some £9bn worth of goods (btw more than Australia) on one hand, and on the other to tell their citizens that Britain believes their citizens are all lazy benefit fraudsters.

Britain should stop lecturing the world about principles it does not adhere to. It should stop behaving like it deserves everything and its interests are above everyone's else. This arrogance and unfairness cannot go unnoticed for ever. There is still some respect left for Britain in the European ambit precisely because it has been perceived as a flag bearer for freedom and equity. Its institutions commanded some respect because they are supposed to safeguard these principles.

And above all, this is not about the Finnish engineers and Dutch lawyers. It is about the Romanian nanny and Estonian bartender who provide just as many (if not more) benefits to the economy.

Mr Cameron, your rhetoric is despicable, your argumentation is ridiculous and your morality is repugnant. My vote for you is: to the bin of history.

softcapitalist.blogspot.co.uk

http://www.ft.com/cms/s/0/21f36df8-6c01-11e3-a216-00144feabdc0.html?siteedition=uk#axzz2oNurSNxT

Britain must reclaim its common sense

2013-12-22T09:56:00.001+00:00

Britain must reclaim its Victorian vision - http://www.ft.com/cms/89d56aae-68ad-11e3-bb3e-00144feabdc0.html

Building homes and roads and rail or air infrastructue is not a Victorian invention nor did they do it perfectly. Actually the Victorians missed a big trick as they had the wealth of an empire and failed to use it for the benefit of all or for many generations.

Before arguing whether the Victorian heritage is good or bad and whether it deserves to be the ultimate benchmark everyone in Britain seems to be obsessed with, it is worthwhile perhaps examining who outside the belssed shores of the British isles has had some vision in more recent times.

The fact that it takes decades to build anything with public money, and it is several times more expensive to build that anything in Britain than elsewhere it should raise the basic question: Is it anything wrong with us? Perhaps we are just different, not better.

Britain has been sold a few myths extraordinarily well. We are a small island and we don't have public money, we don't have any money to spend. There are some 50 countries in the world more densely populated than Britain, even London is actually pretty fine on that front so there is plenty of room for urbanisation beyond dreaded greenbelts etc.

A one thousand six hundred billion economy which cannot build a runway, a tube stop or a bridge in more than 3 decades deserves little praise. It actually deserves pitty and is a model to be avoided. Sad this negative example is set by the land of people who like lecturing the world about right and wrong.

www.softcapitalist.blogspot.com

Britain must face its household debts

2013-12-04T22:28:00.000+00:00

Managing the total national debt is the government's job.

The Tories economic credentials have been built on a carefully crafted narrative around cutting Britain's debt. To the average person this seems to be the public debt. We were told the public debt level was unsustainable because of too many welfare benefits abused by too many, and a large government bloated to the point of bursting. So the people thought hell we need to eat out less, buy cheaper nappies, pay for university tuitions and put on a fleece in the salon instead of turning the heating like in the irresponsible years before 2008. Indefinite austerity is necessary to cure these excesses of the past, no mater who's guilty and who pays for them.

Tough bit just. Touching to tears the British solidarity with its wise leaders.

The trouble is the government has regularly ignored the corporate debt and the household debt. In essence, big corpo are sitting on piles of cash and enjoy bumper profits helped by historically low effective tax rates, while smaller companies on one hand have not reduced their debts, and on the other hand cannot invest because they don't get loans from the banks.

The consumers are tricked into amassing more debt in the form of mortgages and consumer credit. The polarisation of debt is appalling, a consequence of the net outflow of wealth from the poor to the rich. This calls for an honest picture of the debt in the economy and government preoccupation for their world-record levels.

It is the government job to bring down all debt components and grow the economy through investment and fair wealth distribution.

Britain must face its houss. ehold debts - http://www.ft.com/cms/6227e27a-5b6f -11 e3-848ehhqinable i-00144feabdc0.html

David Cameron launches attack on EU migration

2013-11-30T15:42:00.001+00:00

If Cameron were true to free markets he would encourage free movement of labor, goods and capital.

He's defending to death the movement of capital since this makes his banks and big corporations rack up the billions in profit which sustain his party financed and united.

He is OK with the movement of goods because he needs to be seen he is promoting British exports, though despite the pound devaluation, lower labor costs, lower corporate rate and historically low effective tax rates paid by its businesses at home, despite healthy global markets the trade deficit has widened and the Albion's competitiveness is in tatters.

He has never been a true defender of free movement of people, though he finds it inconceivable that Brits would not be able to settle wherever they wish as no nation in their own mind would not open their arms to the skills, expertise and joy that are always brought along by HM subjects. He is now starting a bitter crusade against foreigners, showing to the world that xenophobia is not Daily Mail's privilege, is indeed a strong national attribute.

He should feel embarrassed though of his low blow on Romanians and Bulgarians. Nigel Farage is a low character, low IQ challenger to the crown of fanatic nationalism who's not expected to recognise the scientific evidence in favour of immigration, nor not to unfairly turn his venom against two nations which harmed Britain interests in no way so far. Cameron is supposed to be smarter, better and broader in his argumentation. His point is the poor East Europeans are driven to Britain by the income gap. He has been embarrassed by the fact that most immigrants are from PT, ES, GR and IT, where the GDP per head is much higher than in say HU, SK or LV yet came to the UK in droves, simply because they can, not even because are not under Farage's microscope. And, mind you, the Italians are not all of them highly skilled economists, engineers or bankers. Many of them serve pizzas - precisely the type of jobs the Brits are supposed to lose to Bulgarians. The Portuguese may walk the mini-Brits into the parks and are paid below the national minimum wage or illegally. And I read very little in the Daily Mail about the growing number of British homeless begging on Regent Street with their dogs impressing the shoppers with their candid glances. Are they going to be deported?

What if Bulgaria and Poland imported no more than 30 Indian or Japanese cars manufactured in Britain if the Brits put a cap on their emigrants? What if Barclays Capital would be excluded from making the books for the next juicy privatisation in Lisbon or Riga or Bucharest?

What if Spain or Greece removed access to their health services for all the Brits retired in Malaga or Rhodes, and by the way I am sure these peaceful residents of their sunny coasts don't fly back to Croydon to treat their diabetes.

So make up your mind Cameron: are you a man or a lousy headless chicken?

http://www.ft.com/cms/s/0/b2b10574-56c3-11e3-ab12-00144feabdc0.html?siteedition=uk&ftcamp=crm/email/20131126/nbe/ExclusiveComment/product#axzz2m8owFJjy

Wealthy Investors

2013-11-20T19:22:00.001+00:00

Oh dear. I thought the rich are rich because they have this ... flair. Ok one may place Rooney alongside Romney and Osbourne (both George and Ozzy actually) and thats a bit unfair since raw talent is not always accompanied by brain power.

But the sad truth is most rich are rich because they were born so (George, not Ozzy) and they are pretty incapable of making the most out of their fortunes if not something good for the society. Despite being privately educated.

The other thing is how morally pathetic to be a wealth manager. Just a clown in a suit, a toff entertainer, someone to carry the briefcase between phaesant shootings and racing Aston Martins at Silverstone. Charging the fat cats top dollar for scientifically wasting their money. What a grotesque circus! But hey, prostitution has always paid handsomely. No need to be ashamed of yourselves. Just brush your tongues properly before bed to take the bitter taste of brown off them.

http://m.ft.com/cms/15bab10e-51ad-11e3-8c42-00144feabdc0.html

Surveyors urge Bank of England to damp house market

2013-09-13T14:43:00.001+01:00

Treating the symptoms and not the cause. Yet another example of "thinking out of the box".
Houses are unaffordable because there is demand way above the supply. The supply is restricted because of the consistent policy applied by successive governments to encourage nymbism in the name of democracy (or sacrosant property rights). This strategy is the fruit of excellent propaganda carried out by the well-off who own land and capital. If you believe that owning a house you are better off because your "asset" grows in price and that the zillions of pounds sunk into bricks (call it unproductive capital) come at no cost for you from other parts of the economy, think again. You may feel wealthier, but your cost of living surpasses your asset appreciation, and you are in effect poorer.

The propaganda machine worked very well to convince people there is nowhere in sight to build more. That Britain is a densely populated small island. The words "redevelopment" and "high rise" have been taken out from the dictionary but may apply to the top end of the housing market, or in remote areas nobody should really live in.

Mr Carney is a charming man, but if he believes houses are affordable and there is no "bubble" I would like him to answer a few questions:
1) he's paid some £874,000 including a £250,000-a-year housing allowance. So would he support legislation requiring all employers to pay 25-30% housing allowance on top of the regular income?
2) has he looked at median house price and median income, or at average house prices on a GDP-weighted basis? Is the person in the middle of the economy more, or less able to buy a house in 2013 than in 2007? If wealth is created in London and house prices in London surpass income then should the BoE be worried that the sustainability of the economic recovery is feeble?
3) has he asked the person who packs his wife's bags at their local Sainsbury where do they live, how long does it take to get to work, and how many people share the bathroom?
4) has he looked at the average price per sq meter and average household area? Perhaps house prices have not shot up in a bubble but houses are smaller and smaller so his "macro" analysis has some flaws

Rest assured, Mr Carney is going to print money, on paper, plastic or alufoil to ensure people will believe it is in their interest to go on ever higher debts for ever smaller homes. They call this "affordable mortgages". Don't waste any second. Go buy a house, the timing is right!

http://www.ft.com/cms/s/0/837dffee-1bce-11e3-94a3-00144feab7de.html#axzz2emJ6qVaQ

The cult of home ownership is dangerous and damaging

2013-07-28T07:48:00.003+01:00

Housing is the flagship policy to protect the landowners. The government's main objective is to put more money into the pockets of the rich. This money is taken from the masses either through home prices or rents. The UK has one of the highest price - to - income ratios in the civilised worlds.

A Goldman Sachs (!) economist was daring to pronounce solemnly the other day that houses in the UK are UNDERVALUED, by comparing them to bonds, so considering the low rates prices should be higher. So jump ahead and buy he's implicitly urging us.

This is an example of the rigorous mass psychosis orchestrated by the leaders of this country to achieve their rich enrichment objective. They started with Margaret Thatcher whispering into your ear: you have to have a house. Well, they managed to convince people this is best for them.

But hey, this is a country where 3/4ths of the public believe (genuinely!) that the Olympic Games 2012 were a good way to spend some 10 billion pounds from your taxes.

The propaganda machine is greased and working perfectly. In stark contrast with most government services.

http://www.ft.com/cms/s/0/00bf5968-f518-11e2-b4f8-00144feabdc0.html#axzz2aJrOFHJL

UK drops plan for plain cigarette packs

2013-07-12T17:21:00.001+01:00

Ridiculous debate, on two accounts:
1) it denies a basic intellectual property attribute such as packaging to a legal product
2) it contradicts the stance on the role and size of the state (particularly at times of austerity)

A pack of 10 cigarettes is some £4.5, so one stick costs 45p. A Snickers bar is about 40p. The excise on tobacco is 16.5% of retail price plus £176.22 per 1,000 cigarettes, so some 25p of the price of a stick (VAT is another 7p or so, so the government takes some 72% of what the consumer is paying.

I would agree with plain packaging, or making tobacco illegal alltogether if the government would guarantee that by eating 10 Snickers bars a day I live longer than by smoking 10 cigarettes.

http://www.ft.com/cms/s/0/9e88c622-eac6-11e2-9fcc-00144feabdc0.html#axzz2YqcvhEET

Britain’s welfare state can be cheaper and popular

2013-04-03T11:52:00.001+01:00

The "fairness" rethoric of the benefits cuts is highly effective. It is absurd to get money for nothing, but the abuses of the wellfare system are a) not properly documented and hence not the biggest drain on Britain's deficit, and b) not a reason to drop the atomic bomb on social protection.
For all people who are outraged by the families receiving more than £26,000 per year: over your life time, you are much, much more likely to lose your job (and need help from government to keep your roof above your head and children in school) than to benefit from the drop in top income tax from 50% to 45%.

The assumption most people on benefits are lazy and abuse the hard working ones is a failure to recognize most people lose their job not because they did not work hard enough, but because of the poor decisions taken by those who make tens of times more money than them, and who are being given a boost in their annual disposable income equivalent to the whole disposable income for a person in the bottom quartiles.

http://www.ft.com/cms/s/0/140ea9bc-9b93-11e2-8485-00144feabdc0.html#axzz2POaCrE9v

A convincing story can restore growth

2013-03-23T16:27:00.002+00:00

The Tory duo is convinced stubborness equals credibility. But they are wrong. Determination and measured progress in strategy implementation is likely to sustain the credibility gained through clarity and soundness in its formulation.

Their refusal to adapt the course to proof the infamous plan A was an arrogant imposition on a tolerant, naive country is more than ridiculous, it is harmful too. In their infatuation Dave and George cornered themselves into political cul de sacs such as there is no alternative and A ratings. How dare they say they know best and Britain can have no better leaders?

The latest Budget is once again a proof they are only protecting land owners and big business.

The corporate tax cut is only encouraging profit building and cash piling to the delight of company bosses who are given a pay rise without raising a finger (through eps linked compensation). The companies need to be forced to increase their effective tax rates and invest sooner and more into the economy, i.e. give cash to taxpayers or to growth.

The housing "policy" is nothing but stinky smoke. The land owners are rubbing hands as the right to be indebted up to the ears programs are going to drive up house prices. The public is incredibly dormant when it comes to the lack of supply initiatives. All efforts are put into funnelling taxpayers' money into supporting demand for houses. It doesn't matter if these are obsolete, inefficient and overvalued. The government policy is avoid building at all costs. Except for the luxury segment of course, they need to make sure there is enough accomodation for the wealthy.

The rest is equally feeble. Britain needs roads and transport hubs to breathe and be more efficient. London is the only civilised mega city with one ring road only and no decent airport, and offering an archaic, fragmented and unaffordable public transport systems.

Britain has the unfortunate habit of displaying posh politicians speaking with impeccable accents, using skillfully all tricks of public communications and waggling the finger at audiences on everything from immigration to bank bonuses to working hours. Invoking the "we are British hence we should be listened to because we are always right and we know better" mantra must have its shelf life like anything else. Hopefully succombing soon to the harsh reality that Britain's leaders are a bunch of losers.

http://www.ft.com/cms/s/0/09662f28-9222-11e2-851f-00144feabdc0.html#axzz2ONg5IGaw

Only one in three wants UK to stay in EU

2013-02-18T09:22:00.000+00:00

This poll tells us the public doesnt really care about the EU. And the main issues are foreigners, whether it is about who gets in, or who must leave.

It also shows that fanatic campaigns about immigrants coming in by truck load to steal British jobs or chewing gum from convenience stores have been very successful.

While the people who had the biggest negative impact over the taxpayer and its living standards are mostly indigenous, wear suits and large smiles on their faces, the average Briton is convinced its fortunes are hampered by the occasional foreign-born strawberry picker or plumber.

The Brits are also appalled that British judges cannot eject radical clerics who instigate the youth.

Not trying to minimize the importance of these issues, but are these serious and large enough to determine a rupture with the EU?

The Brits want to be able to open up a pub in Malaga or run an advertising agency in Prague, don't want to deliver their pizzas but don't want anyone to come in, period.

Interestingly, it shows Britons don't really tell us they would like to be fired more easily, work longer hours and have their benefits or employer pension arrangements further sacrificed on the altar of a Brussels-free, free-market economy.

So Mr Cameron has cornered himself into a tough one: he cannot be honest about why the EU is not that bad, he cannot distroy the immigration myths without losing votes, and he must hold the referendum. He is thus poised to fall on his sword. And all that, in the name of what?

2nd note:
The PM is either dishonest or not sharp. If he wants to stay in the EU why did he put himself on a course of leaving it, with the only (short-term) benefit of MP chanting at Westminster, instead of showing manhood and explain it to us why prejudice and myth-building is bad for the country? If he actually wants to leave the EU, he should move on Shaftesbury Avenue form Downing Street though I don't think he would be a sold-out every night.
softcapitalist.blogspot.co.uk

http://www.ft.com/cms/s/0/cb2057fc-7917-11e2-b4df-00144feabdc0.html#axzz2LEuUjChP

Amazon unpacked

2013-02-08T14:16:00.003+00:00

If only Britain were not in the EU, forced to comply with its onerous directives... Supervisors could actually use the whip! That would help with intensity.

The triumph of capital and class society after the greatest mass swindle in recent history, aka the financial crisis. Well done Eton boys.
softcapitalist.blogspot.co.uk

http://www.ft.com/cms/s/2/ed6a985c-70bd-11e2-85d0-00144feab49a.html#slide2

Home loan boom fails to lift ownership

2013-02-08T13:38:00.001+00:00

Failure. Or lack of housing policy? While the world acclaims the Nordic Folkhemmet for its merits to offer high standard affordable homes for most of the citizens (even if it moved away from the leftist approach of the 70's) Britain is a case study in the other direction.
British politicians of all political colors have bowed to the pressure from privileged groups and allowed through irresponsible planning legislation, hapless infrastructure strategies and preferential investment models, all nicely sold to the public as "free market orientation", to strangulate the housing market and to drastically lower the standards of living.

The mortgage lenders, land owners and estate agents benefited nicely, along with some private landlords. The tenants were forced to accept ever rising rents and live in places that too often cannot be called a home. The statistics fail to look at price per sqm and even if these are among the highest in the civilized world, the quality of accommodation is depressing.

The government should redevelop large swathes of the most densley polulated cities against nymbist protests, build new residential complexes following Scandinavian architectural models and impose housing standards. It is beyond belief that the "supply and demand" forces people to live below the pavement line or in "conversions" where a bathroom is squeezed in a former closet or bedrooms are set in "rooms" measuring less than 5sqm.

Why is it OK to build a 6 storey residential building if each flat fetches £ millions but it would destroy the borough's character if it were priced at £250,000?

Old and obsolete parts of London should be forced through property tax to modernize and increase accomodation capacity thus releasing pressure from expanding sprawling and unaffordable infrastructure, and increasing supply of homes. New built homes should raise the standards so that existing landlords would need to improve the buy-to-let properties or find a less speculative source of income.

Ultimately it doesn't matter if people own or rent where they live, as long as they have enough space, at good standards and they do not to spend all their disposable income on paying for it. If in addition to that they afford going to work, and this does not take 2h each way in humiliating conditions, even better.

The next task is to ensure people do not pay whatever they are left for their children's care and education, but that would mean to improve the social mobility in Britain, and this seems to be unacceptable to governments.
http://www.ft.com/cms/s/0/e621b64e-713e-11e2-9056-00144feab49a.html#axzz2KJSI9lrq

Cameron defends child benefit changes

2013-01-06T11:16:00.001+00:00

http://www.ft.com/cms/s/0/bbada758-57e7-11e2-b997-00144feab49a.html#axzz2HBuk2xxX

Another missed opportunity to discuss the root of a problem, instead of forcing a sorry fix. The government will not be able to make fair and progressive reforms by cutting alone. The state needs to look at the future of the country and its citizens. This government is slashing costs with the absurd explanation this consolidates investors' confidence in Britain and therefore it avoids an economic collapse (for which to blame would solely be the Europeans, the immigrants and the welfare recipients).

The core issue is why is child care in Britain among the most expensive in the world? Why isn't the government looking at the cost drivers? The child carers do not earn City wages, the facilities are not state-of-the-art. Where are £1,200 per month going? Who appropriates 60% of the child care cost? Is that what the government wants? Is that how it creates prosperity for all? The pre-tax cost of keeping a 6 month old in a nursery during working hours is the equivalent of almost 100% of the average national salary. Fix that Mr Cameron!

Britain has three issues: education, transport, housing. As long as the government will ignore the roots of the outrageous costs and appalling conditions of these (though arguably education standards are not always bad relative to the rest of Europe), Britain will not move ahead in the league of truly great nations. For a great nation has happy citizens, and in Britain only the rich are happy.

Bardot joins Depardieu’s Russian exit threat

2013-01-04T22:07:00.000+00:00

I respect people who have an ideology. They can tell their government they are too socialist and flee to the UK or they are too conservative and seek shelter under Raul Castro's red wing. But to join the patron of oligarchs only to balloon your pockets, even more to pay Putin 15% of you annual income is to insult all the ideologists and declare to the world that you are a person with one belief only: money.

Mr Depardieu is a successful actor because: a) he is French and that gives him the advantage of speaking a global language, and having the aura given to any Western born persona, and b) he benefitted from a cinema industry nurtured by a society-orientated government and funded by the taxpayer, i.e. his predecessors - like him enriched ones from the world of art, sport or business. Moreover, IP rights protection in the West is a guarantee of the perpetuation of success. In Russia is a laughable word.

Mr Depardieu is so egoistic that he deprives the coming generations of actors of similar success to his! If the taxes in France would be lower, a "market-orientated, individual-focused" government would surely cut all subsidies to les cinematographiques.

Shame on you Mr Depardieu, and the likes of you!

http://www.ft.com/cms/s/0/02314ce2-5677-11e2-aaaa-00144feab49a.html#axzz2H2Zt5Ctg

France: Reluctant to reform

2012-11-02T14:13:00.004+00:00

Mr Cohen may be a bit confused. The success of entrepreneurship is the reward be bigger than if the business owner were employed. For that to happen, both the entrepreneur and the employee need to be taxed in the same way. Earnings are earnings, no matter if they come from the government, a private employer or own company. Moreover, the effective corporate taxes need to reflect the level of service the company receives from the state it operates in.

In spite of his apparent disregard of schooling, Mr Cohen may appreciate his employees and customers have some education and are able to use his company's services due to a good infrastructure. They sport their phones in relative security provided by les flics. Perhaps he thinks these should be paid from other people earnings, not mine, I am a businessman, I am a wealth and job creator, I deserve a statue, without me France would be worse than Syria. But this is a narrow and selfish view.

I don't buy the patriotic taxation, but I believe in equality, fairness and progressiveness of taxation. Loopholes need to be eliminated to ensure companies and individuals pay full tax. They are free to vote for another party in the next election or leave for another country if they disagree with their government policies.

As for his relocation to SF, I wish he stays in rude health and saves for his family. When the mist of amazement over California's low tax rates and low sales tax, as well as cheap access to capital and to a skillful, workaholic workforce dissipates, he may realize he needs medical insurance, maybe some form of savings for old age (if his business will not automatically provide him with a $30m cheque from PE), and schools are rather expensive. He'd be indiferent to how are his employees are going to fare in net terms (substracting all these costs) but what the heck, he can fire them at will if they dare to ask for a pay rise. Oh, it is the free, flexible labour market who fixes these details, I almost forgot...

And how come Mr Cohen is not stepping on the red carpet to London as so many economic refugees will surely do (how many months was the waiting time for one way Eurostar tickets from Paris to London?) Hoxton is a great place to live and raise a family.

Unfortunately the pigeons have small brains. Some of them have loud beaks.

http://www.ft.com/cms/s/0/da7c763a-2413-11e2-9509-00144feabdc0.html#axzz2B4aBGFY4

Romney seizes on sluggish growth figures

2012-10-26T22:32:00.000+01:00

I would be so disappointed if the Americans will elect a President whose only credential is to make money out of stripping companies of assets. He is a soulless fanatic workaholic that shows no emotions when it comes to getting his payback fast and fat. Running a country for the general prosperity is much a different game.

They are just like a pack of hienas going for the weak springbok. There's nothing in management theory to say that any of the companies targeted by PE cannot be put on a recovery course otherwise than by slashing costs and milking it to pay back the debt burden imposed by the buyers. Nor the best outcome for the economy is generated with capital put to these types of return.

Yes, the hienas are necessary, but putting one of them in charge of the savannah is not quite a smart idea, since it may damage the whole ecosystem irreparably.

Moreover, his party has strong racis, mysoginistic views and sports an astonishing sense of entitlement, overwhelmed by inflexible and single-minded opinions on people's capabilities and eligibilities.

If people are tricked into trickle down economics after almost half of them were called hopeless beggars, I will be so disappointed.

http://www.ft.com/cms/s/0/1a83b7e4-1f63-11e2-b273-00144feabdc0.html#axzz2ARXBpDQR

Cost of renting to raise housing benefit bill

2012-10-23T10:25:00.000+01:00

Britain must reject nymbism. Major cities must be redeveloped (see Copenhagen, Barcelona, Stockholm, Berlin, even Panama City).

Sobering analysis showing the numbing irresponsibility of past governments vis-a-vis housing.
http://www.iea.org.uk/publications/research/abundance-of-land-shortage-of-housing

It will cost us all, since we will have to put up with even more apalling public services and crumbling infrastructure and eventually with social convulsions. All behind Mayfair ghettoized walls.

http://www.ft.com/cms/s/0/7d89ab32-1a0e-11e2-9922-00144feabdc0.html#axzz2A6yWK646

Financial crisis hits UK retirement income

2012-10-23T10:19:00.000+01:00

The question is how is the typical boomer going to extract equity from its house to a) buy a retirement one, b) live a few more decades (considering the meagre pension available from government or private plan) and c) help his children cough up a deposit for their first house?

Pretty easy if your house is a few million and you retired as a partner in the City.

A bit of a challenge if you are the average Londoner making £30+ thousand per year.

So the article should actually start by saying "the vast majority of Britons of all ages are going to see their incomes decline in real terms over the next 20 years due to irresponsible policies of successive governments. Britons educated at Primrose Hill, Eton, etc are having a laugh".

http://www.ft.com/cms/s/0/ffd2e54e-1c76-11e2-a63b-00144feabdc0.html?ftcamp=published_links%2Frss%2Fworld_uk_economy%2Ffeed%2F%2Fproduct#axzz2A6yWK646

Cameron urges companies to offer credit

2012-10-22T13:32:00.000+01:00

Why are we even talking about this? Non financial entities do not make loans, let's not get into Cadbury 3 year loans and HSBC lattes.

We shoud be talking about the government's crass failure to pass on to us all the liquidity injected. "Program" after program succumbed to failure. The government is not only embarassingly ideological, but economically incompetent.

The government policy since the crisis was to bail-out, prop-up and hand in freshly minted cash to banks. Thus lowered cost of funding enabled the banks to make profits by doing nothing. This topic should make it to the headlines more often. Why are we, the tax payers, subsidizing the banks by the hundreds of billions, and accept Britain is too poor to build roads or houses?

http://www.ft.com/cms/s/0/40be427c-1a0d-11e2-a179-00144feabdc0.html#axzz2A1tdni8M

Trading helps Goldman return to profit

2012-10-16T13:38:00.002+01:00

The compensation topic is essential. Not only for investment banks, but for all big corporations. Including for instance Starbucks, who sells a cup of "robo-worker-drug-of-choice" for $4 (no excise included!) but pays no tax in the UK. Or yahoo! paying a hapless yet very lucky manager up to $60m just for joining, making a mockery of the shareholders' crowd.

Compensation is important because it is just removed from reality and common sense in a relative way, and it is completely unrelated to performance in absolute terms.

The massive profits of the financial institutions (before, during and after the crisis they induced) are normal, given the regulators' attitude to the sector.

Reagan/Thatcher's light touch gave birth to a global lobby force too powerful to overcome.

So I don't even know why titles like "Trading helps Goldman return to profit" make the headlines. I had absolutely no doubt that Goldman will do very well thank you. The probability that Goldman makes a loss with Washington revolving doors system is close to zero.

http://www.ft.com/cms/s/0/1da0ea4e-16f5-11e2-8989-00144feabdc0.html#axzz29Sql6eMr

Osborne offer has something for everyone

2012-10-15T13:47:00.001+01:00

What I find it absolutely fascinating is how relentlessly is this government pouring its propagandistic arguments over the heads of the confused electorate. This indoctrination makes it possible for instance in the US, that although one candidate paints half of the voters as lazy wimps, about a third of them would still elect him. The American Dream has been by far the best selling product in the US for decades.

Similarly, the illusion making machine in the UK wants to "empower" the employees by making them "owners of capital". Make no mistake: a low-ranking employee will continue to own a minuscule share of equity, just as his/her income is a minuscule percentage of the top management, and his/her wealth is a minuscule part of the capital owners, and his/her children prospects of moving up the social ladder are barely visible. The "ownership reform" will make no difference in his/her well-being or wealth, but will increase uncertainty and fear.

Mr Osborne's plea confuses basic human rights with motivation. Why does one need to CHOSE between rights and company stock? Why can't people have fair protection AND a slice of the company?

Once the rights are taken away, are gone. Rights like these were fought over decades, and only been implemented after massive social convulsions. Share holdings are completely out of the hands of employees their performance usually is determined by the CEO's short-term incentives. People making £30k per year have no influence over the performance of the stock, and no matter what shareholding "incentives" may add, it cannot simply out-do CEO's strategic mistakes or mitigate agency costs.

This proposal would leave hard working people exposed to abuse from their employers, make them overall poorer and ultimately constitute a burden for the rest of the taxpayers.

Mr Osborne, you should be ashamed of yourself.
http://www.ft.com/cms/s/0/0df3e8ce-1391-11e2-9ac6-00144feabdc0.html#axzz29MyVmDY9

Osborne’s economic pain drags on

2012-10-04T11:41:00.002+01:00

This is not about forecasting skills. It is about managing the economy. Here's where we expect the government to be competent. It failed over a sufficient period of time to say that a change is needed.

The unemployment "resilience" is a complacent argument trying to put the current situation in a bright light. What is the purpose of a job if it does not deliver prosperity? Should we be happy we have a job, should we get used to declining real incomes?

I would argue that healthy employment and good job quality should boost the economy. If citizens pay more for education, health, pensions, housing or transport, and are forced to roll over debts at ever increasing interest rates, yet still have a job, is that something to be cheerful about?

http://www.ft.com/cms/s/0/f09a3e62-0d65-11e2-97a1-00144feabdc0.html#axzz28KDi2GyZ

France unveils tough budget measures

2012-09-28T19:10:00.002+01:00

One of the best budgets in Europe. Well done to the French. Fair.

I am so anxious to see how many tax exiles will arrive to Britain. If they are less than the number of Tory tongues in the Parliament, they should bite them hard. It would make their argument that taxes on wealth would drive the rich out of Britain and leave the ordinary taxpayer in misery look even more pathetic.

The good news is the precedent in Europe has been created.

Well done France!

http://www.ft.com/cms/s/0/239eac8a-094c-11e2-a5e3-00144feabdc0.html#axzz27mpcXKhv