On my desk I have a copy of "Members of the London Stock Exchange 1973-74". Forty years on it's pertinent perhaps to do some quick analysis and appraise whether one might consider the market as ALIVE & KICKING or like me (& a minority of others) ON LIFE SUPPORT.
The following firms were attempting to trade through the '74/75 slump;-
(the league table is based on numbers of Partners who maintained 'professional' unlimited personal liability ; note Associates & Attaches are NOT included ----minimum 10 Partners --- I have made a few comments against various and those with blanks do require further research-------all E&OE)
-------------------------------------------------------------
stockbroking
Grieveson Grant & Co 46 (now Dresdner Kleinwort)
James Capel & Co 44 (became HSBC Inv Man)
de Zoete & Bevan 34 (became BZW now Barclays Stockbrokers)
RJ Blackwell 32
Hoare Govett & Co 31 (recently reignited; ex-RBS)
Sheppards & Chase 30 (merged with Carr now Investec)
WJ Greenwell & Co 29 (Midland now part of HSBC)
L Messel 29 (became Shearson Lehman; until 2007)
Cazenove & Co 28 (now JP Morgan & Cazenove Cap Man)
Laurence Prust & Co 28
Panmure Gordon & Co 27 (still active)
Phillips & Drew 27 (now UBS)
Capel-Cure Carden & Co 26 (acquired Myers then ANZ)
Rowe & Pitman 26 (Akroyd & Smithers, Warburg then UBS)
Joseph Sebag & Co 25 (merged with WI Carr; Carr Sebag)
Norris Oakley Richardson & Glover 25
Simon & Coates 23 (acquired by Chase Manhattan)
WI Carr & Sons 22 (merged with Sebag; Carr Sebag)
Laing & Cruickshank 22 (acquired by Credit Lyonnais)
Strauss Turnbull 22 (acquired by Societe Generale)
Kitcat & Aitken 21
EB Savory Milln & Co 21 (5 way merger into Parrish; dissolved 1991)
Fielding Newson & Smith 21 (acquired by NatWest)
Colegrave & Co 20 (merged with Grenfell)
Hedderwick Borthwick & Co 20
George Henderson & Co 20 (merged with Crosthwaite; now Investec)
Buckmaster & Moore 19 (acquired by Credit Suisse)
Stirling & Co 19
Williams de Broe Hill Chaplin 18 (still active)
Pember & Boyle 18
DQ Henriques Seal & Co 18
Laurie Milbank 17 (acquired by Chase Manhattan)
Hoblyn (& King; Dix Maurice) & Co 17 (25 in 1972 ; Hoblyn dissolved October 1974)
Grenfell & Co 17 (merged with Colegrave)
Hichens Harrison & Co 16 (now Religare Hichens Harrison)
Kemp-Gee & Co 16 (merged with Scrimgeour 8 ptnrs then Citigroup SV)
Myers & Co 16 (merged with Capel-Cure then ANZ)
Quilter Hilton Goodison & Co 16 (now Quilter Cheviot ; ex-Commercial Union)
Wise Speke & Co 16 (acquired by Brewin Dolphin)
Vickers da Costa 15 (merged with Scrimgeour into Citigroup)
Brewin & Co 15 (acquired Wontner Dolphin; now Brewin Dolphin)
Cohen de Smitt Greener Dreyfus 15 (merged with Pidgeon)
Hanson & Co 15
Harris Allday Lea & Brooks 15 (still active)
Lyddon & Co 15
McAnally Montgomerie & Co 15
Parsons & Co 15
Read Hurst-Brown & Co 15
Tilney & Co 15
Bell Lawrie Robertson & Co 14 (acquired by Brewin Dolphin)
Irwin & Co 14
Bendon Langton & Co 14
WM Morris & Co 14
Paul R Schweder Miller & Co 14 (still active)
Pidgeon & Co 13 (merged with de Smitt)
Gilbert Elliott & Co 13 (various hybrids; currently mothballed)
Fenn & Crosthwaite 13 (merged with George Henderson; now Investec)
Raphael Robinson & Glyn 13 (merged with Zorn; now Numis)
Rowe Swann & Co 13
JM Finn & Co 12 (JM Finn & finnCap still active)
Beardsley & Co 12 (merged with Bishop then Henderson now Investec)
Henry Cooke Lumsden & Co 12
Earnshaw Haes & Sons 12 (merged with Northcote now Brewin)
Northcote & Co 12 (merged with Earnshaw now Brewin)
Mullens & Co (*Gov Broker) 12 (acquired by SG Warburg, now UBS)
L Powell Dawes & Co 12
Trevor Matthews Carey 11
Rensburg & Co 11 (merged into BWD Secs)
Castello Parsons & Co 11
Duff Stoop & Ross-Munro 11 (merged with TC Coombs; dissolved 1986)
Maguire Roy Marshall & Co 11
Vanderfelt & Co 11
Vivian Gray 10 (acquired by Gerard)
Montague Loebl Stanley & Co 10
Dunkley Marshall & Smithers 10 (5 way merger into Parrish; dissolved 1991)
Galloway & Pearson 10 (acquired by money-broker Exco)
Keith Bayley Carroll 10 (now KBR corporate finance boutique; ex-WC)
AJ Pryn & Co 10
Harold Rattle & Co 10
Scott Goff Hancock & Co 10 (merged with Duff Stoop; then Coombs; dissolved)
Carlesbach Scott Young 10
Sternberg Flower & Co 10 (5 way merger into Parrish; dissolved 1991)
Tustan L'Estrange 10 (hammered 1975)
Wontner Dolphin & Francis 10 (merged with Brewin)
Zorn Leigh & Hunt 10 (merged with Raphael; now Numis)
stockjobbing
Smith Brothers 36 (now BA Merrill Lynch)
Pinchin Denny 35
Wedd Durlacher 11
Akroyd & Smithers 7
Wedd & Owen 5
In 1974 there were approx. 4,900 individual Members of the Stock Exchange (only 3,000 approx. for Big Bang) represented by approx.400 firms (c.250 for Big Bang). As the fallout from the 3 day week, extraordinary high income tax (together with an investment income surcharge) approaching 98% and a bout of mergers and dissolutions took their toll the absorption and consolidation continued through the 1980's, accelerated through 'Big Bang' in 1986, the crashes of 1987, 2000 and 2007/8 to the arrival of the Retail Distribution Review which came into effect on 1st January 2013. The RDR intent was to perform a 'professional' miracle regarding the distribution of financial products and to make the pricing more competitive.
In 1974 many of the smaller, often regional, firms ironically managed to survive (albeit the failure rate was high despite there being no external regulation to worry about) through all the ups & downs, etc. Notably the following firms caught my eye in the "Members..." book of 1973-74;-
Foster & Braithwaite 8
Charles Stanley 8 (still active)
Fuller & Co 7 (dissolved; now absorbed into Walker Crips)
Astaire & Co 7 (muddled through; became Blue Oar; dissolved)
Halliday Simpson & Co 7 (infamously hammered c.1975)
Walker Crips Weddle Beck 6 (still active)
Shaw & Co 5 (acquired by MeesPierson then Chas.Stanley)
SP Angel 3 (now a Corporate Finance/Broking boutique)
Redmayne-Bentley 3 (still active)
WH Ireland 2 (still active)
It seems to me that the current farcical state of REGULATION is only going to make matters worse for existing firms not only in the retail space but also generally across other areas. In recent years a plethora of CFD trading firms have entered the market and yet none appear to making any impact on 'real' investment. The strange and melancholy shift away from 'wealth creation' which ALL of the above firms prospered or failed through has been replaced by a cynical 'wealth' approach ONLY intent on extracting fees from investors and perversely reducing risk, which anyone with proper knowledge and experience knows full well can never work (real world!). An Enterprise Britain executive mentioned to me a recent FCA applicant having to revise his application & presumably business plan an incredible 19 times; I'm not sure anyone with market acumen can tolerate this sort of compulsive inquisitional approach indefinitely. A former partner of mine in the '90s deemed that ALL working in compliance functions (& they have mushroomed substantially since then) should be referred to as the DPU*. I'll come back to this in a moment.
LIQUIDITY always seem to be the buzz word when anyone in authority uses an (any) excuse to tinker with the REGULATOR, the EXCHANGE, etc. This LIQUIDITY motif has been joined by INTEGRITY, FAIRNESS, TRANSPARENCY and a whole host of modern non-sensical terminologies which taken individually rarely (repeat 'rarely') makes the lives of market professionals and investors any easier. The UK used to be a great place to do business but it is increasingly becoming cumbersome and awkward.
Have you noticed that every time one turns on TV, the internet or one reads a paper, online/mobile piece the latest misused word "EXPERT" arrives to inform us of the obvious or as sometimes happens, the irrelevant?
An old market adage long forgotten which I'd like to (sorry if I'm being repetitive) reinforce today is that...."THERE IS NO SUCH THING AS AN EXPERT". Yup you got it in one!
Essentially there's an OLD belief that qualification, education and experience obtained through apprenticeship and practicalities can never turn one into an EXPERT. When I was a young man I was often referred to as a KNOW IT ALL but despite all my misgivings I never referred to myself as an expert and NEVER have to this day. Whenever I speak to someone on market matters or other subjects which I like to think that I have some knowledge of I always say that I have 'specialist' knowledge on the given subject or that I have done considerable 'research' into the area discussed.
So there we have it. Today in capital markets, the media, and in a host of other areas, the UK is full of "experts". But in truth the UK today is split between the "doers" and "don't doers". As you can gather I'm in the "doer" camp with the DPU* representing the other side. If you want to do something or get someone to do something one locates a "doer" but regrettably the "don't doers" are prevailing today in mass market destruction.
* the DEALING PREVENTION UNIT
Just look at the 1973-74 list! This is only the tip of the iceberg and this problem prevails across many professions and industries. Bankers want to sell products, lawyers want to become investment managers, accountants don't know what they want to do but rarely offer to do anything they're paid to do, new age brokers no longer broke shares but manage 'wealth' for an undeserved fee (I've seen this first hand as many Hoblyn & King portfolios are now being managed by broking firms that create nothing but take fees for this charade)...the rest is pretty obvious.
Going back to the 1973-74 lists that I've created from the "Members.." book it seems to me that out of 400 or so firms, 40 years ago, to have 13+ firms still standing in the market today begs a few questions.
No doubt there have been quite a few brokers who have pocketed millions from the various sales, acquisitions, further sales but through this period whilst everyone has participated in the greatest rally ever one would suppose that a few boutiques would have blossomed incredibly. I can think of a few success stories, Killik, Hargreaves Lansdown, Collins Stewart, Evolution, Monument and a host of corporate broking boutiques off the top of my head but I'm struggling to gather pace to enable me to constitute a 2014 league table of the finest and fittest. Virtually all of those listed on '73-74 table survived WW1, the Depression, WW2, the post war slump,etc so it would appear that the real cause of the decline in broking has a lot more to do with RED TAPE than many imagine.
Just in the last year more firms have been rubbed out; Pritchard's, Fyshe Horton Finney and Seymour Pierce. For the life of me I cannot see any new firms operating in this space in the near term.
Everyone likes to comment on LIQUIDITY, perhaps profess to be an EXPERT in these matters but it has long been my belief that LIQUIDITY is a function of the level and amount of participants that there are in the market. The market or exchange is long due an overhaul and many more boutiques are required with soft touch regulation if London is to survive as a place to do business. A Secondary Market perhaps is long overdue too representing just the interests of British companies and workers. The AIM seems to be regaining some traction but has many incremental weaknesses which need ironing out, not least of which is adviser over-charging (duplication even) and absurd liquidity.
Personally I'd like to see a return to personal unlimited liability and firms being created for this alone. Having LLP's, Limited Co's and PLC's/Inc's in the space when no-one is taking any liability is bad business for the UK tax payer.
Surely a few thousand self-employed, empowered, fully liable stockbroking Partnerships would do the market a great service right now.
But NOT if everyone has to undergo 19 revisions and counting!
Thursday 19 December 2013
Tuesday 2 April 2013
How capital markets firms got established and operated before the era of regulation
In February I managed to blag (so I'm blogging it now) my way to the London Hilton for a conference entitled "European Family Office Conference". The cost was almost $3,000 but I managed a freebie less my cost to get there which itself was quite cumbersome.
The opening panel tried to define "Family Office" (F.O.) and this in itself threw open a few interesting descriptions. There are two types of F.O.'s. Some are SINGLE F.O.'s whilst others call themselves MULTI F.O.'s---the latter seem to model themselves more on new age WEALTH MANAGERS and pride themselves in sophisticated platforms.
The Victorians used to build sophisticated railway stations on this basis which is why the internal architecture at Waterloo, Charing Cross, Paddington, King's Cross, Liverpool Street etc all appear to look the same.The rail services thus are pretty similar too as are the fares and rude Revenue inspectors (my experience). It seems that many WEALTH MANAGERS are replicating in the same way.
Some F.O's had chosen to become REGULATED but it didn't seem to matter that many had managed to delay the inevitable.
During one of the coffee breaks I remarked to a fellow delegate (I felt like a EU Commissioner at this point) that I wondered how many people working in F.O.'s had considered that their enterprises were in many ways replicating (repetition) the way that many banks and firms of stockbrokers had started up in 18th & 19th centuries. The reaction from the first delegate was strange. He hadn't considered it as today F.O's according to him were doing something new. Similar conversations ultimately repeated.
On the old London Stock Exchange, referred at the time as The Stock Exchange, London EC2 many of the household names some still around today started up as Unlimited Liability Partnerships with one or as many as forty partners all applying for membership of the exchange which itself was truly regulated by a council. If there were any wrong 'uns they were initially given a slap on the wrist but if there were any repetitions then severe penalties could have been handed out.
The members books of the 1870's to 1900's were full of names that made it to the 1970's period when around 50 firms closed their doors and many more made it to 1986 when 'Big Bang' arrived. A few lucky ones were bought by banks heralding the current age of dominant proprietary banks trading their balance sheets but since then around 200 firms (all partnerships initially) have been absorbed by larger firms, banks and those that have converted themselves to 'wealth' managers.The excessive red tape, regulation, demands on capital ratios (Basle I, II & III), technological developments, broadening of synthetic and socially useless products, extra volatilty and a host of other reasons have forced these firms out of business. In the last 18 months Pritchards (evolved out of Dunkley Marshall), Seymour Pierce (a very respected name on the exchange with an historic penchant for water and perks) and just last week Fyshe Horton have closed their doors. Assuming it is fair to say that the period from 1980 until 2000 and arguably 2007/8 heralded the greatest bull market in history it does seem illogical to reflect that such a high percentage of firms focused on private client investing ultimately closed their doors when it's common knowledge that many provided excellent bespoke services. The main common denominator for closure was cited as 'excessive regulation'. This may surprise many who are supportive of so called 'external regulation' but this is the truth. Regulation is not a British invention when it comes to 'stocks & shares' and investing. It's arguable that this grave error embarked upon by Thatcher and her City specialist, Cecil Parkinson (he came around for lunch at Beardsley's in the early '80's and thoroughly unimpressed some) in the mid 80's came through the back door of the then Common Market and was based on german banking oversight but this is only conjecture. One thing is for certain is that despite the political and unparalleled view that the great bull enhanced wider share ownership the opposite possibly happened as firms were at times forcibly closing their doors. There have been a few success stories in the private sphere to balance the argument such as Killik, Hargreaves Lansdown (are they brokers or product suppliers and distributors?) and those that have been massaging 'wealth' through their efforts within the more recent RDR. These firms, like many others that have evolved from other areas of finance, cannot though argue their case for wealth creation or risk taking which is what any member firm should applaud. The almost total disconnect today between the City and the UK economy (even the FTSE is mainly overseas earnings led) and the new RDR driven market will simply NOT create the right kind of environment for SME, small-cap & micro-cap investing that the old UK market formally embraced due to the modern risk and suitability rules.
But there is one thing which no-one appears to have noticed.
Back in the 80's ALL the market investing and trading was executed by people with MARKET EXPERIENCE. Looking around the F.O. conference I guaged that possibly 70% of those present had NO to LIMITED practical capital markets experience. The lack of incisive questions or questions at all directed at the panellists was alarming. Perhaps this is the result of the rise of the 'collective' over direct EQUITY and possibly the fact that regulation and CPD and such like dominates proceedings everywhere in the new City. This trend is not just found clearly in the F.O. arena but I suspect (I've spoken to many across all aspects of the now fragmented market and none disagree with my analysis) also in Hedge Funds, Institutional Fund Management and all aspects to private 'wealth' which has just about pidgeon-holed almost everything in financial services.
The Drury Report covers many ways that UK government can improve and repair the investing environment for private investors but the real culprit has been the demise of the once great exchange that embraced share ownership with a direct connect to companies traded. Many of the regulatory supported investment and trading operations and ideas created since 'Big Bang' only support the City interests rather than Industry as a whole. The recent scrapping of Stamp Duty for AIM stocks albeit a good idea misses one important point. If brokers are no longer being encouraged to support this end of the market due to new age risk and suitability rules then the tax incentive will be lost to many.
Looking at the executives running the new replacement regulator, Financial Conduct Authority (FCA) I cannot believe that I'm the only one who has noticed the appalling lack of market knowledge at the VERY highest level.
Since June when I left the exchange due to my abhorence of RDR I have tried to engage with many about these fears but in my view (for record I worked across markets for 36 years and personally conducted over 40,000 investment trades so I think I have some knowledge) it is imperative for the UK economy and its overseas interests to reflect on what assisted the growth of the economy since the Industrial Revolution. In simple terms it was a MARKET or more importantly an EXCHANGE that understood its raison d'etre for existing with practitioners who knew what it meant to operate within a market. I regret to say that many of my former colleagues and counterparties simply had NO interest in anything other than the trade and the short-term profit deriving from it...all ably supported by pointless and aimless compliance personnel representing the vested interests of the regulators, the executives in many of the surviving firms and their allies ---and there are many!
I believe passionately that a fair and well oiled UK economy must be supported by an exchange free of external regulation, with unlimited liability for practitioners who in return are FREE to operate in proper equity, bonds and physical derivatives, all bound together by a RULE BOOK similar to the old YELLOW BOOK that operated for over 150 years.
The current breed of regulators appear to be making alot up as they go along!
The opening panel tried to define "Family Office" (F.O.) and this in itself threw open a few interesting descriptions. There are two types of F.O.'s. Some are SINGLE F.O.'s whilst others call themselves MULTI F.O.'s---the latter seem to model themselves more on new age WEALTH MANAGERS and pride themselves in sophisticated platforms.
The Victorians used to build sophisticated railway stations on this basis which is why the internal architecture at Waterloo, Charing Cross, Paddington, King's Cross, Liverpool Street etc all appear to look the same.The rail services thus are pretty similar too as are the fares and rude Revenue inspectors (my experience). It seems that many WEALTH MANAGERS are replicating in the same way.
Some F.O's had chosen to become REGULATED but it didn't seem to matter that many had managed to delay the inevitable.
During one of the coffee breaks I remarked to a fellow delegate (I felt like a EU Commissioner at this point) that I wondered how many people working in F.O.'s had considered that their enterprises were in many ways replicating (repetition) the way that many banks and firms of stockbrokers had started up in 18th & 19th centuries. The reaction from the first delegate was strange. He hadn't considered it as today F.O's according to him were doing something new. Similar conversations ultimately repeated.
On the old London Stock Exchange, referred at the time as The Stock Exchange, London EC2 many of the household names some still around today started up as Unlimited Liability Partnerships with one or as many as forty partners all applying for membership of the exchange which itself was truly regulated by a council. If there were any wrong 'uns they were initially given a slap on the wrist but if there were any repetitions then severe penalties could have been handed out.
The members books of the 1870's to 1900's were full of names that made it to the 1970's period when around 50 firms closed their doors and many more made it to 1986 when 'Big Bang' arrived. A few lucky ones were bought by banks heralding the current age of dominant proprietary banks trading their balance sheets but since then around 200 firms (all partnerships initially) have been absorbed by larger firms, banks and those that have converted themselves to 'wealth' managers.The excessive red tape, regulation, demands on capital ratios (Basle I, II & III), technological developments, broadening of synthetic and socially useless products, extra volatilty and a host of other reasons have forced these firms out of business. In the last 18 months Pritchards (evolved out of Dunkley Marshall), Seymour Pierce (a very respected name on the exchange with an historic penchant for water and perks) and just last week Fyshe Horton have closed their doors. Assuming it is fair to say that the period from 1980 until 2000 and arguably 2007/8 heralded the greatest bull market in history it does seem illogical to reflect that such a high percentage of firms focused on private client investing ultimately closed their doors when it's common knowledge that many provided excellent bespoke services. The main common denominator for closure was cited as 'excessive regulation'. This may surprise many who are supportive of so called 'external regulation' but this is the truth. Regulation is not a British invention when it comes to 'stocks & shares' and investing. It's arguable that this grave error embarked upon by Thatcher and her City specialist, Cecil Parkinson (he came around for lunch at Beardsley's in the early '80's and thoroughly unimpressed some) in the mid 80's came through the back door of the then Common Market and was based on german banking oversight but this is only conjecture. One thing is for certain is that despite the political and unparalleled view that the great bull enhanced wider share ownership the opposite possibly happened as firms were at times forcibly closing their doors. There have been a few success stories in the private sphere to balance the argument such as Killik, Hargreaves Lansdown (are they brokers or product suppliers and distributors?) and those that have been massaging 'wealth' through their efforts within the more recent RDR. These firms, like many others that have evolved from other areas of finance, cannot though argue their case for wealth creation or risk taking which is what any member firm should applaud. The almost total disconnect today between the City and the UK economy (even the FTSE is mainly overseas earnings led) and the new RDR driven market will simply NOT create the right kind of environment for SME, small-cap & micro-cap investing that the old UK market formally embraced due to the modern risk and suitability rules.
But there is one thing which no-one appears to have noticed.
Back in the 80's ALL the market investing and trading was executed by people with MARKET EXPERIENCE. Looking around the F.O. conference I guaged that possibly 70% of those present had NO to LIMITED practical capital markets experience. The lack of incisive questions or questions at all directed at the panellists was alarming. Perhaps this is the result of the rise of the 'collective' over direct EQUITY and possibly the fact that regulation and CPD and such like dominates proceedings everywhere in the new City. This trend is not just found clearly in the F.O. arena but I suspect (I've spoken to many across all aspects of the now fragmented market and none disagree with my analysis) also in Hedge Funds, Institutional Fund Management and all aspects to private 'wealth' which has just about pidgeon-holed almost everything in financial services.
The Drury Report covers many ways that UK government can improve and repair the investing environment for private investors but the real culprit has been the demise of the once great exchange that embraced share ownership with a direct connect to companies traded. Many of the regulatory supported investment and trading operations and ideas created since 'Big Bang' only support the City interests rather than Industry as a whole. The recent scrapping of Stamp Duty for AIM stocks albeit a good idea misses one important point. If brokers are no longer being encouraged to support this end of the market due to new age risk and suitability rules then the tax incentive will be lost to many.
Looking at the executives running the new replacement regulator, Financial Conduct Authority (FCA) I cannot believe that I'm the only one who has noticed the appalling lack of market knowledge at the VERY highest level.
Since June when I left the exchange due to my abhorence of RDR I have tried to engage with many about these fears but in my view (for record I worked across markets for 36 years and personally conducted over 40,000 investment trades so I think I have some knowledge) it is imperative for the UK economy and its overseas interests to reflect on what assisted the growth of the economy since the Industrial Revolution. In simple terms it was a MARKET or more importantly an EXCHANGE that understood its raison d'etre for existing with practitioners who knew what it meant to operate within a market. I regret to say that many of my former colleagues and counterparties simply had NO interest in anything other than the trade and the short-term profit deriving from it...all ably supported by pointless and aimless compliance personnel representing the vested interests of the regulators, the executives in many of the surviving firms and their allies ---and there are many!
I believe passionately that a fair and well oiled UK economy must be supported by an exchange free of external regulation, with unlimited liability for practitioners who in return are FREE to operate in proper equity, bonds and physical derivatives, all bound together by a RULE BOOK similar to the old YELLOW BOOK that operated for over 150 years.
The current breed of regulators appear to be making alot up as they go along!
Thursday 21 March 2013
Russia should be allowed to extend its EMPIRE
For the last 6 months or so the media has projected images of the slaughter in Syria and highlighted the clear divisions between the West (USA, UK, France etc) & the Russian Federation. A political stand-off appears to have occurred with some 30,000 deaths resulting. The UN has yet again shown its lack of metal too. The Dan Snow Documentary shown on TV the other night about Syria proved that there are NO easy answers to this implosion of freedom. I came away from watching it having some minute sympathy for Assad and I feel somewhat guilty for this. As the shenanigans in Libya and Egypt have proved, it may be very dangerous to fly the FREEDOM/DEMOCRACY flag until some clear direction is shown by global STATESMEN. With Obama doing a tour of Israel and the West Bank there are serious tensions in the zone with Iran stirring up the pot. The debacle of Iraq & Afghanistan still hangs over us and terrorism is rife in Yemen, oppression rife in Bahrain and elsewhere, and now France have gone over the top in Mali showing that Africa is not immune too. It's getting like a RISK board out there.
Putin, Medvedev and the competent Foreign Minister have always suggested to the West that Russia's stance is mainly historic and symbolic. Russia has sold arms to Syria for generations and claims it doesn't want to lose it's influence in that area of the Middle East. The truth is, of course, that since the fall of USSR the russians only have minor access to the Mediterranean through a naval base in Syria. Beforehand the USSR had the luxury of using its Baltic fleet out of the Black Sea but today Ukraine controls this area of influence (although many of the former USSR warships are rusting in dock).
As the Cyprus crisis deepens and there is a degree of politicising between Bruxelles, Moscow, Nicosia and other vested cities it would appear that there's a real opportunity here to sort two huge messes out with some strategic and sensible diplomacy. It's clear that the bankers are running out of ideas whilst Russian citizens with cash in Cyprus are saddled with a potential problem not of their making.
This has just been reported;-
Russian prime minister Dmitry Medvedev has lambasted the EU’s handling of the Cyprus debt crisis, comparing a plan for a levy on bank deposits to measures that hurt savers under the Soviet Union. However, Moscow has yet to offer any concrete help to the Cypriot government,the FT reports. Cyprus on Wednesday was left with narrowing options to rescue its outsize financial-services sector from collapse—something that could end its membership in the Eurozone—after international lenders rejected an alternative government plan to secure a multibillion-euro bailout and Russian officials remained cool to a Cypriot gas-for-cash deal, The Wall Street Journal Europe says. Banks in Cyprus were ordered to remain shut until Tuesday as Cypriot and European officials anxiously hunted for alternatives to an abortive plan to tax bank deposits as part of a €10bn bailout. Officials were resurrecting previously discarded proposals as they attempted to avoid a financial meltdown, the FT says.
Surely this is the time for STATESMEN & STATESMANSHIP!
The historic Greek and British interests in Cyprus are really irrelevant to the situation today. Cypriots appear to prefer the russian connection especially as Cyprus is really a Moscow equivalent of Monaco anyway.
By getting Obama and Putin together on the Syria solution, working with the ineffective UN, it's quite possible that Russia really does hold the right cards to extend its EMPIRE. It makes complete sense to me to allow Russia (Gazprom) access to Cypriot oil and gas contracts in return for assistance to the indebtedness of Cyprus. The question surely is; is Obama up for a solution to Syria at the same time?
In the small picture this blog may not have a great deal to do with Enterprise Britain but in the big picture a Russian solution may be better than throwing good money after bad into Cypriot coffers. Britain could quite easily broker a deal by throwing our moribund naval base into the hat.
The EU should make a hasty retreat from their dithering.
A new age in Anglo-Russian relations is a distinct possibility. Does Hague have the bottle?
Putin, Medvedev and the competent Foreign Minister have always suggested to the West that Russia's stance is mainly historic and symbolic. Russia has sold arms to Syria for generations and claims it doesn't want to lose it's influence in that area of the Middle East. The truth is, of course, that since the fall of USSR the russians only have minor access to the Mediterranean through a naval base in Syria. Beforehand the USSR had the luxury of using its Baltic fleet out of the Black Sea but today Ukraine controls this area of influence (although many of the former USSR warships are rusting in dock).
As the Cyprus crisis deepens and there is a degree of politicising between Bruxelles, Moscow, Nicosia and other vested cities it would appear that there's a real opportunity here to sort two huge messes out with some strategic and sensible diplomacy. It's clear that the bankers are running out of ideas whilst Russian citizens with cash in Cyprus are saddled with a potential problem not of their making.
This has just been reported;-
Russian prime minister Dmitry Medvedev has lambasted the EU’s handling of the Cyprus debt crisis, comparing a plan for a levy on bank deposits to measures that hurt savers under the Soviet Union. However, Moscow has yet to offer any concrete help to the Cypriot government,the FT reports. Cyprus on Wednesday was left with narrowing options to rescue its outsize financial-services sector from collapse—something that could end its membership in the Eurozone—after international lenders rejected an alternative government plan to secure a multibillion-euro bailout and Russian officials remained cool to a Cypriot gas-for-cash deal, The Wall Street Journal Europe says. Banks in Cyprus were ordered to remain shut until Tuesday as Cypriot and European officials anxiously hunted for alternatives to an abortive plan to tax bank deposits as part of a €10bn bailout. Officials were resurrecting previously discarded proposals as they attempted to avoid a financial meltdown, the FT says.
Surely this is the time for STATESMEN & STATESMANSHIP!
The historic Greek and British interests in Cyprus are really irrelevant to the situation today. Cypriots appear to prefer the russian connection especially as Cyprus is really a Moscow equivalent of Monaco anyway.
By getting Obama and Putin together on the Syria solution, working with the ineffective UN, it's quite possible that Russia really does hold the right cards to extend its EMPIRE. It makes complete sense to me to allow Russia (Gazprom) access to Cypriot oil and gas contracts in return for assistance to the indebtedness of Cyprus. The question surely is; is Obama up for a solution to Syria at the same time?
In the small picture this blog may not have a great deal to do with Enterprise Britain but in the big picture a Russian solution may be better than throwing good money after bad into Cypriot coffers. Britain could quite easily broker a deal by throwing our moribund naval base into the hat.
The EU should make a hasty retreat from their dithering.
A new age in Anglo-Russian relations is a distinct possibility. Does Hague have the bottle?
Wednesday 20 March 2013
Welcome to ZOMBIEVILLE
Since my last post in December I haven't posted a blog either on Enterprise Britain or Hoblyn & King so apologies for the apparent arid writing conditions but I do have a confession to make and a sort of (poor) excuse.
As predicted by H&K for some years things everywhere appear to be going from bad to worse. Of course there are quite a few new age "wealth" managers and their clients extremely happy with the performance of most western indices but even Bloomberg has considered that there has been a great disconnect between Wall Street and the real economy referred as Main Street.The nub of the problem is that there is a vast swathe of FINANCIAL REPRESSION occurring daily and many people haven't even noticed.
Have the recent events in Cyprus surprised me? A. No......many observers have predicted this. Asset grabs are the order of the day as the EU turns many of us into ZOMBIES daily. Repression can come in many forms. It can be outrageous taxes (as prescribed by the EU over Cyprus), excessive and pointless REGULATION (the 'R' word in my judgment IS the problem everywhere), too much assistance to Public Employees (over Private Enterprise), bad and creative accounting, bad and creative spinning of newsflow, hypocrisy, lies and corruption supported by newswires....need I go on (?).
In the City there is a constant debate about RDR, charging, FSCS, the 3 new hydra regulators, derivatives, accounting practices and everyone with a position in a regulated entity seems to have flown the white flag over the COST versus BENEFIT ratio. For record at least 10% of brokerage income & fees is sliced towards 'R'. Thousands of ZOMBIES are working for the regulators and compliance departments and '000s more are earning a living from training people in the ZOMBIE universe, enforcing CPD etc...it's all totally pointless but creates '000s more of pointless jobs. My partner keeps reminding me that this is exactly how USSR prospered until its eventual demise.
Hasn't anyone in government (what government?) or the financial media considered that the British economy ignited during the Industrial Revolution WITHOUT 'R'? Historically NO investors were ever protected through support mechanism's, too big to fail policies (but smaller enough to steal from- SEE CYPRUS) and yet today an entire industry is telling everyone that "PROTECTION" works.
(Editor's note; when President Reagan was shot some years ago a popular song was called 'Protection' by Graham Parker & the Rumour...the catch went ....."you can't get, you can't get, you can't get NO protection....protection.")
Well I've got news for you ALL. Protection doesn't work when the economy has been zombified, when there's NO money around, jobs are being exterminated and growth is zero to negative, inflation is reported at 2.8% (9 month high -ONS), real inflation is closer to 10%, interest rates are geared to protecting (?) the zombified over-geared crowd but NOT savers and zero-debt citizens, when exchanges are dismantled for regulatory rhetoric and everyone is looking at a crooked mirror.
The crazy side show to all of this QE, quasi Keynsian policies, etc is that governments support bankers (more bonuses), governments support regulators (more compliance, paper & bonuses), governments support each other, governments don't create jobs, governments don't save because austerity is a mirage, governments are running scared which is why Cameron has sent a RAF aircraft with Euros1 million for "our/their" 3,000 troops but no confetti for 60,000 ex-pats........
The establishment is supporting itself BUT not the economy.
There is an economic war going on. It is not between LEFT & RIGHT, left of centre v. right of left of centre (5 3 2, 4 4 2, 4 3 3), labour v. tory, liberal v. loony, catholics v. protestants, monarchists v. anarchists, red rose v. white rose, republican roundhead v. cavalier.....it is a war between RIGHT & WRONG...market believers v. market destroyers..the old economy and the new economy, old politics & new politics, environmentalists v. quasi environmentalists, humans v. zombies.......the nearest I can come up with is doers v. non-doers.
Governments have turned me into a ZOMBIE but I'm fighting back....(my excuse)
Twitter: CoeurDeLion
LONG: Longbows and arrows, gold, idealogy
SHORT: markets, bureaucracy, REGULATORS, the NEW regulated press
As predicted by H&K for some years things everywhere appear to be going from bad to worse. Of course there are quite a few new age "wealth" managers and their clients extremely happy with the performance of most western indices but even Bloomberg has considered that there has been a great disconnect between Wall Street and the real economy referred as Main Street.The nub of the problem is that there is a vast swathe of FINANCIAL REPRESSION occurring daily and many people haven't even noticed.
Have the recent events in Cyprus surprised me? A. No......many observers have predicted this. Asset grabs are the order of the day as the EU turns many of us into ZOMBIES daily. Repression can come in many forms. It can be outrageous taxes (as prescribed by the EU over Cyprus), excessive and pointless REGULATION (the 'R' word in my judgment IS the problem everywhere), too much assistance to Public Employees (over Private Enterprise), bad and creative accounting, bad and creative spinning of newsflow, hypocrisy, lies and corruption supported by newswires....need I go on (?).
In the City there is a constant debate about RDR, charging, FSCS, the 3 new hydra regulators, derivatives, accounting practices and everyone with a position in a regulated entity seems to have flown the white flag over the COST versus BENEFIT ratio. For record at least 10% of brokerage income & fees is sliced towards 'R'. Thousands of ZOMBIES are working for the regulators and compliance departments and '000s more are earning a living from training people in the ZOMBIE universe, enforcing CPD etc...it's all totally pointless but creates '000s more of pointless jobs. My partner keeps reminding me that this is exactly how USSR prospered until its eventual demise.
Hasn't anyone in government (what government?) or the financial media considered that the British economy ignited during the Industrial Revolution WITHOUT 'R'? Historically NO investors were ever protected through support mechanism's, too big to fail policies (but smaller enough to steal from- SEE CYPRUS) and yet today an entire industry is telling everyone that "PROTECTION" works.
(Editor's note; when President Reagan was shot some years ago a popular song was called 'Protection' by Graham Parker & the Rumour...the catch went ....."you can't get, you can't get, you can't get NO protection....protection.")
Well I've got news for you ALL. Protection doesn't work when the economy has been zombified, when there's NO money around, jobs are being exterminated and growth is zero to negative, inflation is reported at 2.8% (9 month high -ONS), real inflation is closer to 10%, interest rates are geared to protecting (?) the zombified over-geared crowd but NOT savers and zero-debt citizens, when exchanges are dismantled for regulatory rhetoric and everyone is looking at a crooked mirror.
The crazy side show to all of this QE, quasi Keynsian policies, etc is that governments support bankers (more bonuses), governments support regulators (more compliance, paper & bonuses), governments support each other, governments don't create jobs, governments don't save because austerity is a mirage, governments are running scared which is why Cameron has sent a RAF aircraft with Euros1 million for "our/their" 3,000 troops but no confetti for 60,000 ex-pats........
The establishment is supporting itself BUT not the economy.
There is an economic war going on. It is not between LEFT & RIGHT, left of centre v. right of left of centre (5 3 2, 4 4 2, 4 3 3), labour v. tory, liberal v. loony, catholics v. protestants, monarchists v. anarchists, red rose v. white rose, republican roundhead v. cavalier.....it is a war between RIGHT & WRONG...market believers v. market destroyers..the old economy and the new economy, old politics & new politics, environmentalists v. quasi environmentalists, humans v. zombies.......the nearest I can come up with is doers v. non-doers.
Governments have turned me into a ZOMBIE but I'm fighting back....(my excuse)
Twitter: CoeurDeLion
LONG: Longbows and arrows, gold, idealogy
SHORT: markets, bureaucracy, REGULATORS, the NEW regulated press
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