Comments on Guy Fawkes' blog of parliamentary plots, rumours and conspiracy: The Myth of UK Economic Strength

So, are we done talking about meaningless share pr...

2008-03-23T01:09:00.000Z

So, are we done talking about meaningless share price figures yet? Because if you look at GDP, which measures the ACTUAL ECONOMY, you'll see it has gone up by an average of 2.8% a year - which isn't bad at all.

One of your anonymi said "Wouldn't surprise me if ...

2008-03-07T10:37:00.000Z

One of your anonymi said "Wouldn't surprise me if the US had worked out the whole scenario".

In 1995 a group of UK Parliamentarian was given a presentation of a US study, funded by IBM, AT&T and others and published in 1993, which showed that China would inherit the manufacturing world and the future for the United States was to sell them food, top level research and entertainment.

Therefore they wanted strong copywright and patent laws to protect genetically modified crops and technology know-how and investment in the Internet so that it would flourish under United States control in support of US-centric R&D and IPR licensing.

Some people think ahead.

Interestingly one of the MPs to be so briefed was also the first person to suggest I read an electronic scuttlebut service run by one Guido Fawkes.

Apart from apologising about the atrocious typos i...

2008-03-06T13:44:00.000Z

Apart from apologising about the atrocious typos in my prevois post, I think that Guidos figures and the comments on here open up another problem, which the increasing strangulation of 'free trade'.

It seems that every serious and sensible pundit now accepts that genuine free trade is a Good Thing. However it is being attacked by politicians, by vested interests, by bureaucrats and by other interst groups like greens and 'fairtraders'.

In the US I understand that both Clinton and Obama have attacked NAFTA because it is 'free trade' that is 'losing jobs' in the US. Clearly this is politically expedient.

Bureaucrats hate free trade as it deny's them a constituency, so the archetypal bureaucracy the EU seeks to apply more rules to ensure that free trade is fair. Hmmm. Nuff said.

Vested interest predominantly big businesses don't rea;y want free trade. Much better to agree with local governemnts that they are 'national champions' and restrict comeptition.

In regards to other groups the classic is the 'fairtrade' lobby. Even before the recent ASI paper I considerd that 'fairtrade' was justa marketing gimmick and another attempt at monopolisation. After all ree trade must be fair trade.

This creeping agenda plus the over regulation and overtaxation of the public will lead to decreasing returns on invetsments epsecially equities as enterprise is strangled and populations impoverished.

Governments lie about risk all the time. Risk, in investment terms, is your friend. You need risk to make a return. Free trade is risky. Indigenous enterprises are challenged by incomers. The risk is that you will lose your job if your employer cannot or will not compete. But unless you allow this challenge everyone else loses out by having to buy your innefficiently produced goods. This truth is beyond the ability of politicians to handle in a democracy where voters are largely ignorant of the working so free trade.

By the way, free trade does not permit dumping and I would not accept that state supported industries that export to others are in fact engaged in free trade. In these cases some form of protecctionism may be required. What about levying an import tax?

I know that this is an inadequate analysis, but the free trade argument is fundamental to the success of stock returns.

"The Chinese are investing in Western debt rather ...

2008-03-06T10:16:00.000Z

"The Chinese are investing in Western debt rather than Western equities. It's a form of economic war - they can take an attrition rate of 20-30% the West can't."

It's not economic war. The Chinese can't feed themselves now and they are adding 130million people to their population every ten years. They know that the only place that can feed their growing population is the US, a vast exporter of food products. Thus they are selling stuff to the US in order to build up their dollar savings so they can guarantee their ability to buy US food in the future. Only problem is that the UK is also dependent on food imports and can no longer compete with the Chinese. China has enormous problems with a growing and ageing population, but they have found a solution. Only problem is that their solution might starve us Brits to death.

geordie scoot...Nonsense. The French use a form o...

2008-03-06T09:38:00.000Z

geordie scoot...

Nonsense. The French use a form of mercantilism to frustrate foreign buyers of 'national champions'. This embeds the innefficient allocation of capital wjich is adressed in the UK by a lively trade in companies. Private equity etc is a Good Thing.

PE has been around for ages. What has made it headline news recently is that, as money was for to cheap (thank youMcfuckingbean) they were able to create heavily geared deals that actually looked likely to work because the cost of their capital was so low.

If PE the comes along and offers a shareholder a big dollop of cash, ata prive that he thinks is fair or generous for his stake then he can choose to sell. And why not? It his the shareholders company.

You can argue about long or short termism around this. I am not going to.

For evidence of French mercantilism look at outfits like Renault or their banks.

And if you analyise the french economy it is evedn more fucked thna ours. They have a pensions deficit greater than their GDP.

IMHO the EU is al about the Fenchg leveraging the Germans with guilt to enbable the ruin of the UK by dragging us down to their level of statist inneffiency.

French Great food and (mostly) great people (read the 'average bloke theory). France - statist corporatist arrogant cheese eating surrender monkeys.

trotsky said...The US economy, for example, in spi...

2008-03-06T09:20:00.000Z

trotsky said...

The US economy, for example, in spite of its wonderful Dow Jones performance, is currently entering recession.

And you think the British economy isn't?

Coming late to the fray, one thing that distinguis...

2008-03-06T07:36:00.000Z

Coming late to the fray, one thing that distinguishes the UK from the other markets is that if you examined the FTSE 100 list in 1997 and today, you will see that most of the companies in the list 10 years ago are no longer there, having been taken over, often at substantial gains, by foreign companies and private equity. This does not happen as much elsewhere, esp France where foreign takeovers of large companies are almost unheard of. The index level does not reflect the distribution of such gains to shareholders. However, I am no apologist for Broon's so-called economic miracle, and if you need a more accurate picture of UK plc, look not at the FTSE 100 but at the wider FTSE 250 or FTSE all share, where the performance is piss poor.

Dear Comrade Anonymong @ 4:52 PM,I am sorry to hea...

2008-03-05T23:49:00.000Z

Dear Comrade Anonymong @ 4:52 PM,

I am sorry to hear that the Chinese are not communist enough for you,

My comment hinted that although stock market values are obviously a measure of something, I am not sure they are as definitive a guide to prosperity as Mr Fawkes suggests.

The US economy, for example, in spite of its wonderful Dow Jones performance, is currently entering recession.

Give me economic prudence any day.

So how does one go about starting a Civil War .......

2008-03-05T23:31:00.000Z

So how does one go about starting a Civil War .... I think us English have lost the knack, shouldn't we get some advice from the Spics or Kenyans ?

You forgot about inflation - If inflation was at 2...

2008-03-05T23:12:00.000Z

You forgot about inflation -

If inflation was at 2% (then multiple 5792 by 0.98 10 times) you get 4724.

If inflation was at 4% (then multiple 5792 by 0.96 10 times) you get 3844.

If inflation was at 6% (then multiple 5792 by 0.94 10 times) you get 3119.

If inflation was at 8% (then multiple 5792 by 0.92 10 times) you get 2515.

A bloody miracle !!

Retail Banks still have 20% to fall. The Chinese a...

2008-03-05T23:05:00.000Z

Retail Banks still have 20% to fall.

The Chinese are investing in Western debt rather than Western equities. It's a form of economic war - they can take an attrition rate of 20-30% the West can't.

Those that argue the Chinese don't understand money ... don't understand money.

never mind the bollocks these are very bad numbers...

2008-03-05T21:55:00.000Z

never mind the bollocks these are very bad numbers.
gordon brown is a total spastic.
just look at the numbers.
after ducking out of dealing with the unfunded public sector pensions budget problem his only option now is to increase the tax take.
despite the already high taxation levels it imposes, the government has no apparant understanding of the word value and so it offers very little value to the taxpayer.
new labour have trapped us in a vicious circle of taxation, the ever decreasing type.
economically, the icing on the cake is that the american banks knowingly passed off bad loans to offload their risk and by executing this deception they triggered the banking crisis.
fucking idiots!
captains of industry?
fucking pirates more like.

"2:38 PM, March 05, 2008"you left out IR35 -introd...

2008-03-05T21:52:00.000Z

"2:38 PM, March 05, 2008"

you left out IR35 -introduced of course by the one eyed snot eating cunt - which seriously fucked up the I.T. contracting market.

maybe the bank of england should concentrate on lo...

2008-03-05T21:37:00.000Z

maybe the bank of england should concentrate on looking after the well being of the economy rather than wasteing time on Common Purpose networking events

(hint : look at the email address at the bottom..)

Anon 2:42 - the Norwegian sovereign fund is genera...

2008-03-05T21:07:00.000Z

Anon 2:42 - the Norwegian sovereign fund is generated using tax revenues from oil fields; large fields are generally more profitable than small ones and oil fields more profitable than gas fields. They also have a far smaller population to support with welfare payments of various sorts.

Incredible;a lively knowledgeable debate about wha...

2008-03-05T20:35:00.000Z

Incredible;a lively knowledgeable debate about what's actually going on in the U.K economy.

Any one of those particpating would make a better job of explaining what's going on than DC's "Treasury" team.

Why has the idiot wallpaper fancier NEVER been on anything more demanding than "Newsbeat"???
Why's he always surrounded by media minders????
Can he count to eleven without taking his shoes and socks off???

I know Ken Clarke is hugely divisive but by now he would have been sauteing Brown & Darlings pancreases with soy sauce and chinese leaves on a wok on the Speaker's desk

The mong Osborne spent the entire Northern Rock debate doing an impersonation of Bertie Wooster as portrayed by Mr Hugh Laurie.

It's long past time for a three way interview with David Cameron and the captive bolt gun says Colonel Madd

"Pensions rely on capital growth and income - ther...

2008-03-05T20:11:00.000Z

"Pensions rely on capital growth and income - there has been no capital growth for UK pensioners.

You will find that US, French, German and Hong Kong shares pay dividends as well"

But US shares pay lower dividends, so to only give one side of the returns you are giving a misleading picture. That's why the Total Return figures I give are much closer.

lola said...I can tell you from personal experienc...

2008-03-05T19:07:00.000Z

lola said...I can tell you from personal experience it is vastly more expensive to do business in Browns England than it was in 1997.

And about to get more expensive Lola as the minimum wage is to rise by Inflation.

It seems that as we now have a two tier inflation economy, the minimum wage is rising by the higher rate.
3.8 %

The lower rate [ or Gordon's private public sector special fantasy rate 2.5% ]is only to be used when the government is paying or are trying to hide something.

If private companies , individual shop keepers , small businesses are paying then the higher or ACTUAL rate must be used..

What a hopeless cretin. He can't even pick a story to stick to.

But that's what happens when you rush an announcement forward from next weeks Budget because you are afraid of adverse Euro Treaty press stories in the morning.

I think we are getting confused between the price ...

2008-03-05T18:46:00.000Z

I think we are getting confused between the price and value of the various indices and the underlying stocks.

There are stocks in each index that are probably good value right now. However the indices as a whole may be over or undervalued. Similarly I do not think it is relevant to Guidos argument to factor in currencies. These are discreet market performances and are being used as a proxy for the underlying economies. Why the Dow has outperformed the FTSE 100 is relevant is to do with the more business savvy environment in the USofA - Sarbanes Oxley, Enron etc excepted. Also the sub-prime and associated banking woes need not reflect badly on the DOW or FTSE as a whole. Many companies have rebuilt their balance sheets over the last few years in the expectation of this current problem. After all it was pretty clear that consumer debt was unsupportable at current levels as is UK government debt.

More of issue is the very unbalanced nature of the UK economy. By feather bedding unemployment and inventing poverty that needs 'curing' our Governemnt as created a very high cost labour force that will not get out of bed, or benefits, unless it is for internationally silly money. This makes it all but impossible to manufacture here unless huge governemnt subsidies are paid the employer (e.g Renault in France - which has the same problem. BTW why did Nissan buy it?).

The FTSE has underperformed internationally because all investors very quickly realised that nuliebour was useless.

In addition the removal of the ACT rebate for pensions schemes (about 60% of the owners of the FTSE) effectively increased the cost of capital so that a lower P/E ratio is necessary. That is, the divident rate has to be higher as re-invested dividends are the biggest contribution to the long term growth of investments - and pensions are long term investments.

In any event more people are employed by small business (70% in my area) of five employees or less and I can tell you from personal experience it is vastly more expensive to do business in Browns England than it was in 1997.

Pensions rely on capital growth and income - there...

2008-03-05T18:45:00.000Z

Pensions rely on capital growth and income - there has been no capital growth for UK pensioners.

You will find that US, French, German and Hong Kong shares pay dividends as well.

You are mad if you think a flat stock market is indicative of a healthy economy.

This might be the single worst piece of financial ...

2008-03-05T18:35:00.000Z

This might be the single worst piece of financial analysis I've seen. Aside the questionable belief that a share index is a good measure of economic prosperity (it might just mean monopoly profits), it ignores dividends, which you'd think are rather important to pensioners, and currency movements.

Over 10 years an investor in the Ft-se 100 would have received 35%, one in the S&P 500 48%. In terms of dollars that would be 63% in the ft-se 100 and and 48% in the S&P 500.

Would quite agree that the UK economy is a pyramid...

2008-03-05T17:16:00.000Z

Would quite agree that the UK economy is a pyramid investment scheme that already had its blow off top.

However, the US is the same, only worse.

The 'mighty DOW' needs a few exchange rate changes factoring in. Given the dollar is down 50% against the euro, and even 30% on the dollar index over the same period, the DOW in reality has done nothing. Moreover, you will find plenty of US based investment professionals advising their clients to invest in foreign companies/foreign markets at this moment.

The DOW had two consecutive days of PPT late-day intervention this week (they care so little that they more or less do it openly nowadays). Today is apparently the 'AMBAC' bounce, except we already had that once, and the deal still ain't done.

Basically, it's a mafia operation. A shark-infested swimming pool. US stocks are toxic, like the people running the companies. I'm not saying things are perfect elsewhere, but if you go and put more of your money into the land of money printing and debt monetization, don't say you weren't warned.

Dickie the sheet etc...Browns continuing claim for...

2008-03-05T17:09:00.000Z

Dickie the sheet etc...

Browns continuing claim for creating the low inflation stable environment is just lies. Make a graph of RPI from 1947 to 2007 and you will see that after having peaked in about 1976/78 it declines with various abberations until about 1993/95 - in other words Mrs. T's supply side reforms and the victory over totalitarian socialism in 1989 - cured inflation, not Mcfuckingbean. We have been importing deflation since 1989.

For real inflation look at the public sector where the inflation rate since 1997 has been about 9% p.a., especially in health care. In other words the value achieved for the cash spent has been declining year on year. 9% p.a. over 11 years is a reduction in value of about 62%. So each state employee is now less than half the value of the the 1997 one.

Or look at it this way. The inflation rate is a measure of declining efficiency. Declining efficiency must mean less efficient use of all aspects of employment, including energy. It is therefore reasonable to look on McFuckingBean as an increasing producer of greenhouse gases (if you believe in such things of course).

The man is a deceitful cunt. There is no other descrtiption for him.

However, does Cameron (the only viable alternative - not necessarily any good) get it? If he, Cameron, made plegdes as to giving independence to the staticians, so that we could judge properly what was going on, would he get the backing from us the voters? I think he would.

"Your data clearly show that we should cut income ...

2008-03-05T16:52:00.000Z

"Your data clearly show that we should cut income tax and go communist.

There is no alternative."

China has never actually exhibited sufficient Marxism to be described as "Communist". No universal free health care and no universal free schooling either. Still, these days it believes in free market economics and is doing rather well. Shame our government prefers a statist economy or perhaps we might be able to compete with them.

Guido should have shown the graph over a 20 year p...

2008-03-05T15:33:00.000Z

Guido should have shown the graph over a 20 year period. It would have shown stellar growth in share prices during the previous 10 Tory years followed by a broadly flat performance over the last 10 years of Labour. With the crash still to come of course.....

For some reason the FT seems to quite like Gordon, along with the CBI, but I'm fucked if I know why. He's a disaster.