Firstly, I do hope you had an enjoyable and hassle-free Christmas holiday. Before getting to the helter-skelter world of politics and current affairs, I thought you might excuse me for looking back over the blog posts of the last year.
- Friday Facts: I’m surprised I’ve managed to complete six this year. They do take quite a bit of research, although it’s enjoyable to learn more about where you live. They are: 4 – Statue of General Gordon, 5 – Bisley Clock Tower, 6 – Coldingley Prison, 7 – John Betjeman and Camberley, 8 – Victoria Monument, 9 – St Barbara’s Garrison Church. Click on Friday Fact in the Category Cloud to see the list.
- Photo Quiz: I only managed 4 photo quiz entries, again they do require research, so time precludes more. They were: 12 – Pipeline markers, 13 – Broadmoor siren, 14 – A Lightwater footbridge, 15 – Bagshot Drinking Trough.
- Recession: A new blog category – Recession – contains thirty posts, many with insightful graphs on the state of the UK economy.
- Momentous Moments: Another new category. I imagined there might be more than just the one in the year, but, big changes in society are rare. I’m sure there’ll be more this year.
- Education: Click on the Education category, and you’ll see numerous posts on exam results. New to me was the difficulty in gaining access to them, and their usefulness for judging a school’s performance. Good to know our MP, Michael Gove, is hopefully going to make a big, big impact in our education system this year.
- Polls: A newly available facility of the blog host, to post online voting polls, proved nowhere near as popular as I’d imagined.
Enough of a review methinks. I’ve probably missed a few key topics, ones like the surprising interest of past students of Lightwater’s Paddock Wood Girls Finishing School, in my blog posts on its history.
However, a new year approaches. New ideas for this blog are wandering around in my brain, as yet they remain wholly random and unformed.
Listening to the car radio I heard that Gordon Brown has announced that “Britain will provide £1.5 billion towards a three-year fund to help the poorest countries adapt to the effects of climate change.”
My immediate reaction, please Gordon, stop spending our money. That’s £1,500,000,000 to help with climate change, no indication whether this is a down payment, or what. I’m truly troubled when I hear Gordon Brown say,
“Obviously we are hoping that other countries respond to the generous offers that Europe has made but we look forward to a successful outcome [to the UN summit on climate change at Copenhagen].”
Hoping, Gordon, just hoping. Why must we always be first in spending £billions? Especially as we don’t seem to have any money left in the kitty. How, for example, will this play with the 1,700 people in Teesside who are losing their jobs on the closure of Corus’s steel plant in Redcar.
The costs of the doing things about climate change won’t play well in the country. That’s my view. There’s a deal more explanation to the electorate required by this, and future, government’s.
Just listened to Andrew Neil on the Beeb’s THIS WEEK programme, where he announced this startling fact:
“To insure default on £10 million of German government bonds, the cost is £25,000. To insure the same sum in UK government bonds the cost is £85,000.”
Wowee. Now that’s a startling difference, which shows the international bond markets judgement on the UK economy.
It seems like yonks ago that I had access to top quality analyst reports on the computer software industry. Heck, I even knew some of the analysts. However, reports from the likes of Gartner, IDC, and Forrester didn’t come cheap, and still don’t.
The only analyst I remain in contact with is Forrester. I take Forrester’s regular emails on a variety of topics, which provide a synopsis on their latest paid-for research reports. There are some free reports if you hunt around for them.
Enough, enough. Yesterday, I saw the synopsis on their Enterprise and SMB Global IT Budgets and Spending Survey, Q2 2009. Clunky title, huh. Here’s what the survey found.
“IT budget decision-makers tell us that they are focused on improving IT efficiency, although paths to getting there differ across regions. Budget breakdowns across IT categories look similar across regions; globally, we see a trend toward more outsourcing in 2009.”
My take on this. There’ll be more IT people working from home. What I’d like to do is survey all the IT home-workers in Surrey Heath to find out if they’d like to work in an enterprise hub, creative village-type environment , somewhere in the Borough. Must be fully network-specced, but cheap. Your thoughts please.
Don’t want to drone on about economics, so will keep it short.
Today the Bank of England announced a £25billion increase to its asset purchase policy – otherwise known as quantitative easing, or printing ‘funny’ money. Two points to note, one from the Bank’s press release and the other from Stephanie Flanders, the BBC’s economics editor,
- In the Bank of England’s press release is this comment about future inflation prospects,
- “Inflation is likely to rise sharply to above the 2% target in the near term, reflecting higher petrol price inflation and the reversal of last year’s reduction in VAT.
- Stephanie Flanders comments that “… it is far from ideal” for the Bank to spend £173billion out of £175billion of QE on government debt, known as gilts. She says that the Bank would like to buy corporate bonds, but can’t because there’s an insufficient supply available to buy. Most odd. Don’t the likes of Rolls Royce, BAE Systems, or other very large businesses have a need for capital? I just wonder how hard the Bank tried.
Due next week is the Bank of England’s quarterly inflation report. Depressing reading, I imagine.
I’ve often wished I could’ve been an economist. Without a university education, and also lacking the intellectual firepower and mental toughness, I know I couldn’t be one. Doesn’t stop me wishing though.
It’s quite pleasing to see that my simple brain has come to the same conclusion as three of the countries leading economists. I share their view that the Bank of England’s quantitative easing should be directed to support the private sector – buying corporate bonds and commercial paper, rather than the public sector, through buying government bonds. Edmund Conway’s – Daily Telegraph economics editor – blog post, Will the bank soon be buying houses? reports on Fathom Consulting’s quarterly press conference, where there’s some sensible discussion on what to do to get our economy back to full health.
Dilatory posting today is a direct result of reading some troubling news about the sate of the UK. Particularly on the economy, and the policies advocated by the respected economist Roger Bootle of Capital Economics in today’s Daily Telegraph. More than a few cups of tea were needed to regain a semblance of personal balance.
The essence of his article is that we need more quantitative easing [QE], and that while Bootle recognises that it’s a dangerous policy, which also carries inflationary risk, it’s better than doing nothing. I’m not sure who he thinks is advocating doing nothing. I know of no one.
My view is that QE is a tactical policy, to finance our horrible debts, and to let the banks off the hook. What we need is a strategic policy. Having successfully transformed our economy from manufacturing to financial management, we should do all we can to press home that advantage, both for economic and employment reasons. The managers of wealth, whether national or private, were shaken to the core by the credit crunch crisis. They need to learn to trust financial markets and professional advice – that’s the market the UK needs to be, trusted.
The credit crunch has ‘gummed up’ the gears of enterprise. It needs freeing up. Credit needs to flow to the productive sector, not to support government profligacy. The UK’s entrepreneurial spirit and brain-power is being drained by over reliance on state funding. Just look at the excessive salaries of the many managers our ineffectual quango’s. We should force the banks to ‘front up’ on their bad debts, introduce a ‘Glass-Steagall’ law that splits banks into ‘boring’ banks and ‘exciting’ banks, and direct QE ‘money’ directly to the private sector by buying corporate bonds, not government bonds.
I agree with Liam Halligan, time we, as a nation, took the lead in banking regulation, and fiscal responsibility.
Gordon Brown is optimistic on our economy. Does he have any right to be optimistic. Yes, to some degree. In time we will come out of this recession. So it’s all a matter of timing then. Well not quite. Focus on timing misses out on the crucial judgement about whether the economy is currently getting better or getting worse.
I’m an optimist, so I’d like to believe Gordon Brown. But, I’m also a realist, and can see the economy has some dangerous structural weaknesses. Here are two graphs that illustrate my point, one is about the collapsing value of the pound to the Euro, and the other about an upturn in inflation. Both are connected. When the pound loses value, imports become more expensive, which pushes up inflation. The value of the pound is also affected by our ability to fund our national debt. The more pounds we print not backed by any real wealth also helps drive down the value of the pound. It’s a fine balancing act to ensure neither inflation nor the pound’s value get out of control.
I’m looking forward to read economists, such as Liam Halligan, over the weekend. Also, September’s inflation figures are released by ONS next Tuesday.
Looking at today’s BBC website it’s obvious why people will discount any stories about “economic growth has resumed” or green shoots of recovery.
Just look at the conflicting stories. Gordon Brown to talk of cuts in public spending, BAe Systems to cut 1,116 jobs, while the Bank of England says growth “has resumed”.
People aren’t stupid, they know their best policy is to cut back on spending and build up savings, where they can, in case of unexpected redundancy.
To read more on each story,
To my mind Robert Peston, the BBC’s business editor, is a print journalist. His words are better in print than when he speaks them in that odd halting way of his. No better example of this is there in his blog post today – Why are companies not borrowing? Here’s a snippet,
“For me, that drop in the price of interbank lending – the fall in the rate charged by banks for borrowing from each other – tells an important story.
It implies that a good deal of all that money created by the Bank of England in its quantitative easing programme – perhaps too much – is staying within the banking system, rather than stimulating activity in the real economy.
Why? Well, the Bank of England’s fear is that banks are being too averse to risk, that they don’t want to lend even to businesses that are fundamentally viable.”
My worry is that all we’ll get in the way of headlines is that things are getting better, so no need to worry. Meanwhile, businesses and entreprenuers are short of investment funds. Remove risk from investment and you remove growth. No growth means stagnation, which in the current climate might lead to stagflation.
I guess you wouldn’t know it from my posts on the economy, but I’m an optimist. It’s optimism that’s needed in the banks, who’ve managed to get their sticky hands on all that Bank of England ‘funny money’. What we need is for them to start putting it to work in the productive economy.