Bradford & Bingley RIP

So Farewell then B&B but worry not those out there who have failed to heed our advice to remove your deposits that nice Mr Peston at the BBC says you shouldn't "get the willies" (?)

We quote ..."There's too much at stake (including the stability of our banking system) for the government to allow B&B savers to lose a penny ...."

Should you subsequently disciover it takes you longer to get your hard earned from the ever benevolent state that the rapidly closing depositors windows at B&B don't apply to us but to Mr Peston c/o the BBC. London.

It will be interesting to see how much Mr Pym , ex A & L the briefly appointed CEO, at £2.5 Mn a year manages to take away in his wheelbarrow before the door finally shuts...... Monday, August 18, 2008 Richard Pym ex A&L skips to B&B and increases salary/ benefits x 2.5

FCUKED - an emerging problem

The BBC reports that energy trader Inenco says the UK could face power blackouts "within weeks" if a sudden cold snap or unplanned power outage occurs. (Read "The Generation Gap" pdf)

Here at Forthcoming UK Energy Deficit (FCUKED) we have been pursuing this line persistently and consistently since 1999.

Discussed on the Staurday Today programme these fears have been focussed this week since the National Grid published their latest forecast of power supply and demand for the coming winter. Ideally these are based on a "cushion" of capacity but they reveal that cusion will drop to less than 800MW in November.

BBC Online report that David Hunter, of energy consultants McKinnon and Clarke, said there was "real concern" that there could "a lack of enough power available for short periods".

After the National grid report was published the price of electricity rose above £121/MWh, (British Energy sell at approx £45 MWh to the National Grid on fixed contracts) and prices for November delivery rose 7% in a matter of hours.

Removing his head from ahole in the sand a National Grid spokesman (unnamed) said to the BBC "It is nonsense to suggest that the UK is at high risk of blackouts." ... forgetting that faced with the EU directive to pahse out coal fired plant operators have been running plants at maximum output on totally amortised plant - with resultant likelihood of running problems ... we also have nuclear fleet (whover owns them) with persistent problems of sustainability.

We suggest you have a supply of candles, wood, coal, generator depending upon your needs and circumstances.

We mustn't upset the servants or the children

Allan Asher, chief executive of consumer watchdog Energywatch, told the BBC there were several periods this winter when "it's going to be very tight".

He blamed an "appalling lack of future planning and cavalier regulation", but said: "I just don't think it's wise to alarm people about this.

"Both at a regulatory and planning level a huge amount needs to be done, but that shouldn't be done with dire threats which overstate the concern now."

"What's definitely true is that margins are tighter than they've been for a long time and not very much has to go wrong to turn that towards brownouts or blackouts."

Fortunately we are facing such a massive downturn in the UK economy that electricity demand will fall substantially - maybe that was the plan all along.

A Modest proposal Redux

It has been pointed out by the eagle eyed readers that the previous reference to "A Modest proposal" may be a reference too far. Jonathan Swift's pamphlet A Modest Proposal for preventing the children of poor people in Ireland, from being a burden on their parents or country, and for making them beneficial to the publick was published in 1729.

The Modest Proposal was response to the wailing and handwringing of the pious about the degrading poverty of the Irish poor . This is, he declares a direct result of too many children and suggests the "surplus" of children is the direct cause of the problem - cut the suprlus, solve the problem.

He object to selling the children into slavery - not because it would be cruel or simply wrong but no-one would take babies as slaves.

An American back from the Colonies had told him that a child ...

“a most delicious, nourishing and wholesome Food, whether Stewed, Roasted, Baked
or Boyled”

This formed the basis of his idea of breeding children for food.

As a consequence, and considerable discussion we can now suggest that Bill Gates and Gordon Brown spend less time worrying about Malaria which kills only 1 Mn a year worldwide and proceed to lay plans for the imports of live babies - a 380 Airpus could handle a fair load.
Whilst this is somewhat wasteful and importing killed flesh would be better the hygeine standards through the Third (or even 4th) world would probably be unsatisfactory.

1. World population problems if not solved - reduced.
2. Grain production can continue to be diverted to ethanol.
3. Mid west Grain farmers to benefit from subsidies for growing corn for ethanol.
4. Tyson and Pilgim's producers meat packing plants can be kept open - even the Postville plant of Agriprocessors could be kept humming - presumably there is such a thing as a Kosher suckling Kid ?

Archbishop Sentanamu should be forging aheaed with this idea rather than muddled one's about short selling.

Ben and Hank End of the Pier World Show - how does it play in Peoria ?

Whatever results from the deliberations of the US lawmakers this weekend, access to Bloomberg TV has given the viewer (with the time) a ringside seaton one of the centuries major economic tectonic events. Whatver the outcome this is 7+ on the Richter and well over 5 on the Saffir Simpson Hurricane scale.

Flawless sports styler coverage from sharp, savvy commentators, with slick real time graphics , have performed a far better job in explaining what is happeneing than the elected representatives of the people.

...Not that they have been silent.

A major problem is that, apart from the original 700 odd words of the draft Bill the public have no way of determining what is on offer. Ben bernanke and Hank the Bank have been remarkably reticient. For two guys who are supposed to combine both academic savvy of the higherst kind and commercial credentials and expertise that acommanded the highest "compensation" on Wall Street they were totally inartulcate when they came to explain.

1. What the current problem(s) were
2. The extent of these problems
3. The origins of these problems
4. How the very brief plan - handing over 700 VERY VERY BIG ones to Hank to spray around Wall Street - even onto foreign banks (who may, as we have pointed out, by way of trade, helped US citizens defraud the US taxpapyer)

The two relevant Chairmen Senator Chris Dodds head of the House Banking Committee ... and Barney Frank D- Mass, House Financial Services Committee , present the worst of all possible worlds. Whilst wishing to appear sage and reasonable, ratyional even- they haven't a clue. Indeed Dodd now (NOW) says the original plans was unworkable - he might have saved a little heartache and time by saying so from the get go.

He looks used to all nite , or at least late nite sessions, howevre the florid face usggests the only financial concern of those nights was which lobbying firm from wall Street to stiff with the evening's bar bill and entertainment.

Barney Frank looks well past understanding of many financial matters and seems to have mistaken his role as that of the husband faced with his wife'sdemands for the yearly dress allowance.

"US$700 Bn bucks honey that's a lot of money... I mean you ' ve got lotsa dresses in those closets"

"Dresses - you call those dresses?" .... "Even the Charity store stopped taking them months ago"... "Why if my mother knew...."

" But honey you know you got dresses you never wore even ..."

" Wore ... wore ... do you know the price of dry cleaning, the charity store can't afford it ... and they have to clean EVERYTHING now on public health grounds"... "There , there4 have whiskey to calm you down"

" Honey dear haven't you heard of ... AIDS?" ...."Honey these dresses I have ... they are ... no..no... they could be toxic !!!!"

"So honey you see I really need ...NEED those dresses... or else what am I to do?"

This is where Barney pours himself another stiff whiskey and takes out his cheque book. Which his wife just happens to have handy.

However the Ben and Hank End of the Pier World Show is getting booeed and hissed as lawmakers have called in at the golf clubs, Rotary dinners, masonic halls across the land. Wall Street saved but Main street ignored... is how it plays in Peoria and down town Palookaville.

Fed by a savvy TV educated audience from Bloomberg across Fox, BBC, NBC ... and ansty well hocked land is already seeing gas stations that won't take their credit cards, they know how hard it is to reset that home loan. Inflation is steadily working away. Foreclosures are rising and there are no buyers.

All the while the Barney Franks and the Dodds want everyone to hold hands and jump off the bridge together ... but nobody wants to be held responsible when it doesn't work.

As it won't.

It wouldn't work as originally conceived... and after it's been picked over by this bunch of myopic goons nothing is more certain.

The grinding of the economic tectonic plates is well in motion, lubricated by the remains of CDO's, SIV's and a whole alphabet soup of illusory types of money (money = store of value) which has dazzled too many people and politicians for too long.

Economic power is shifting - even yesterday Bloomberg was reporting speculators moving into Singapore dollars - Singapore hosts its First ever Formula One Grand Prix.

Singapore Airlines (SIA), the first to fly the A380, has just taken delivery of their 6th aircraft. In the airline’s latest financial year (ending 31 March 2008) it carried just over 19 million passengers and its average load factor for the year surpassed 80% for the first time. More significantly, it reported record profits of 1.64 billion Singapore Dollars.

VAT fraud - launder £6 Mn get 2 years

Missing Trader Fraud has at it's peak been costing the UK taxpapyer £400Mn a month,for several years. Yesterday the HMRC (who have had up to 1,500 staff on the case at a time) finally succeeded in jailing some of the active UK based participants.

At Worcester Crown Court yesterday as a result of the HMRC Operation "Shoot"

Gerard Michael Forrest (DOB 18.08.1968) of Prince Regent Mews, London, was sentenced to 3 years in prison.

Stephen Hancock (DOB 05.03.1958) currently of HM Prison Service and formerly of Grove Farm, Kingsley Road, Cellarhead, Stoke-on-Trent, Staffordshire, Stoke-On-Trent, Staffordshire, was sentenced to 5.5 years in prison.

Barbara Moran (DOB 03.08.1956)(Hancock's girlfriend) of Laurel Cottage, Scot Hay Road, Alsangers Bank, Stoke-on-Trent, Staffordshire, was sentenced to 3.5 years in prison.

Shane Matthews (DOB 05.08.69) of Ironside Court, Burslem, Stoke-on-Trent and formerly of 6 Partridge Close, Stoke-on-Trent, Staffordshire, was sentenced to 7 years in prison.

In all they stole at least £50 Mn. from the taxpapyer by an elaborate VAT MITC fraud

The related Operation Shepherd, resulted in seven men being sent to prison for a total of 39 years for stealing £68 million.

In related Operation Emersed assets to the value of £6 million have been seized under the Criminal Justice Act 1988 - including 4.5 million in a related investigation (Operation Emersed). Confiscation Orders are being secured to reclaim this money for the public purse. These assets inlclude a helicopter, a yacht, two properties including Meaford Hall, Stoke. Performance vehicles - a Ducati, Aston Martin, Ferrari and two Bentleys, Rolex watches and diamonds.

Craig Johnson was the seventh member of the criminal gang to be jailed in connection with a £68 million VAT fraud. He pleaded guilty to conspiracy to laundering £6.3 million from the proceeds of crime has been given a two year jail sentence at Birmingham Crown Court.

It is noticeable that recovery of cash and assets is negligible in relation to the size of the theft - total losses the the UK taxpapyer since these crimes commenced is not less than £8 Bn. pounds.

The Chancellor of the Exchequer at the time was the current Prime Minister Mr Gordon Brown.

No sense and only nonsense in Sentamu

It is impossible to believe how stupid and ignorant the publicity hungry Archbishop of York John Sentamu is.

"To a bystander like me, those who made 190 million pounds deliberately underselling the shares of HBOS ... are clearly bank robbers and asset strippers," he said in a speech to international bankers in London on Wednesday evening.

If he wants to turn over the moneychangers tables he should wise up on how short selling operates - those short sellers "borrowed" shares held by "long" holders of HBOS shares - probably inlcluding ones that hold the funds that will pay his much required retirement pension.

Those lenders do not, like Christians, do it out of the goodness of their heart - they charge for it, and any profits so made, swell their coffers whether the short sellers makes a profit or not.

Often these short sellers get caught "short" and the share price rises and they have to buy in a rising market and so lose on the bet they placed .

Just talk to Mr Joseph Lewis who spent over US$700 Mn on shares in Bear Stearns in the last 12 months, about losing money betting against the market - see Tuesday, September 11, 2007 Bear Stearns buy in of 8.1 Mn shares = biggest shareholder is Joseph Lewis - East End boy made good

A criminal Act and a New World Order

Hank's original demand handed through the Bankers window was about 700 words - say US$1 Bn a word.

At the last hearing of Barney Frank's assorted hoodlums we were told this was now 45 pages long - and it's a bet that few Congressmen who are asked to pass it have read it and a very few of them will have understood it.

It's certain the President doesn't understand what is going on judging by his address to a confused and anxious nation / world last night.

Financial assets related to home mortgages have lost value during the house decline, and the banks holding these assets have restricted credit. As a result, our entire economy is in danger.

So I propose that the federal government reduce the risk posed by these troubled assets and supply urgently needed money so banks and other financial institutions can avoid collapse and resume lending.

This rescue effort is not aimed at preserving any individual company or industry. It is aimed at preserving America's overall economy.

This Act is aimed at preserving the major tier of bankers (now joined by Sacks of Gold and M & S) and their assets by relieving them of questionable and unsaleable "assets".

It will do nothing to ..

1. Reduce foreclosures
3. Revive the US housing market - there is enough unsold stock / on re sale to meet any possible demand in the enxt 2 years.
3. Improve loan conditions for industry staggering under burdens of debt - see as a simple example the case of Pilgrim's Pride
4. Reduce inflation - it will in fact drive infaltion inexorably as interest rates rise.
5. To cut the National debt - and in fact may triple it this year.

What it will do is destroy the value of those wise and prudent investors who hold annuity funds, not only in the US but in Europe. This will create a new class of indigent and poor old people.

This Act if passed is a blatant assualt by the bankers led by their chief henchman Hank the Bank ( Dontcha you just love the pained look on his face when he talks about the immodest pay packets bankers have been enjoying ?).

This does not presage an elemental shift in the tectonics of global economic forces. As Mitsubishi and Samsung and the sovereign wealth funds sink their teeth into Golden Sacks and M & S , their is ..."flooding in like the main" a rising tide of change as the uS economy slides faster under the encroaching tide.

The UK will also slide along, although their housing market is wholly different as the prices are a reflection not only of cheap credit but real scarcity.

The ensuing depression, whether this criminal Act is passed or not will see an eventual slide punctuated by bouts of chaos and a change ... in fact a New World Order.
Not quite the one the guys in Chicago had planned for.

How foreign based banks who help defraud the US public purse are going to plunder more funds c/o Hank the bank.

We reported that the Senate permanent subcommittee on investigations released a report on July 15th 2008 saying that UBS’s offshore practices helped American citizens hide an estimated $18 billion in 19,000 accounts from the Internal Revenue Service. see Sunday, July 20, 2008
Massive UBS scheme to help US taxpayers to defraud IRS of tax on at least US$18 Bn.

We had also reported Tuesday, July 22, 2008 Deutsche Bank's role in questionable tax shelters - fire destroys bank and records - LMDC and it's interesting people - explaining how Deutsche Bank arranged "taz Shleters" for US citizens...

In August, KPMG reached a $456 million deferred-prosecution agreement with prosecutors and admitted criminal wrongdoing over four types of shelters, some of them ones that Deutsche Bank worked on. A smaller German bank, HVB, has also settled with prosecutors.

The bank has said in the past that the transactions it arranged for tax shelters were regular and ordinary.Prosecutors are examining how Deutsche Bank helped to make and sell a digital option shelter called Cobra (currency options bring reward alternatives Ho.Ho.Ho.),to more than 1,100 wealthy investors around 1999 and 2000, according to the people who have been briefed on the inquiry.

Now this is all grist to the busy bankers day ... but DB and UBS are banks headquartered in a foreign country, and now they can sell off their septic debt to the US taxpayer, via Mr Paulsen's hastily drafted in "experts" on valuing worthless pieces of shit, called SIV's etc.,

Is this a wise/ sensible way to apply the worker's dollar ?

When Butch and Sundance were robbing banks, it was the banks that were robbed ... now we have a socilaised capitalism where the Banks are sanctioned by law to rob the people ... and any act the US Treasury makes is beyond the law.

A "Modest proposal"

It would be fair and reasonable to assume that the Sage of Omaha has more public trust than the "experts" whom Hank the Bank is about to draft in to squander the US taxpayers billions.

We suggets therefore that the money be handed to Warren immediately, without delay.

The urgency is, Warren is an old guy and he might die before the weekend.

It is impossible to predict what he will do with the money but US$5 Bn of his shareholders funds in Sacks of Gold worked wonders so heaven knows how US$700 (and rising) might be applied.

Failing that ..... we start feeding babies to the Hogs in, starting with eirther Alabama or Kentucky.

PS : Or maybe the chicken Farmers could be approached first ....Chicken producer Pilgrim's Pride (PPC) warned it expects a significant Q4 loss, and said it may go into default with its lenders unless they waive or amend its current debt covenant. PPC has been hurt by surging grain and energy costs, weak pricing and demand for chicken, and by its debt load following a 2006 $1B purchase of Gold Kist who had debts of US$144 Mn.

The company announced idling processing facilities in Clinton, Arkansas and another in Bossier City, Louisiana and long term layoffs of 2,300 staff on 11th August.Shares fell 38% Wednesday and slid a further 40% today - now trading at US$3.51. (52 week high US$36)

Clint Rivers, president and chief executive officer in July said Market breast prices averaged about US$1.33 per pound, Rivers said. Market prices should be at least US$2.15 for the industry to break even.

The company also reported in a (now) bitter sweet report at the end of July, that they had sold 7.5 million shares of its common stock for $177 million (US$23 per share - ish) to underwriter Lehman Brothers Inc., to provide the company with more funds. The market price May / June was around US$25.

Maybe, looking at those chickens coming off the PP production line we could cut out the farmer/meat packer and suitably packed distribute processed babies direct - disemblowelled of course, who want's all those mucky intrenal bits?

Why there is a huge push for recruitment in UK Armed Forces

Official MOD figures show that 315 were wounded in action and 1,583 personnel medically evacuated from Iraq between 1 January 2006 and 31 August 2008 and a further 453 wounded in action and 1,302 personnel medically evacuated from Afghanistan between 1 January 2006 and 31 August 2008.

A lot of damaged lives and families.

What do we do if Hank resigns ? ... or even threatens to?

The speed and range of developments in international finance take some keeping up with. e.g Crude futures rose US$25 per barrel,(24.3%)before the NY Mercantile Exchange closed yesterday - US$130 + (it closed out at US$123) and no one expects it to drop today.

Congress and the Senate are clucking about the demands Hank Paulson is making - ie litle short of financial Dictatorship. He want the till stuffed full of US$700 Bn and he wants the keys and he wants protection from the law courts . Forever.

Barney Franks (Chairman of the Financial Services Committee) who looks like an unmade bed and has a grasp of international finance equivalent to Ted Steven's understanding of the internal workings of the Internet.To think this intellectual Titan can decide on what/what not to do gives no comfort in this quarter.

Faced with anxious self important people like Steny Hoyer, Nancy Pelosi, Barney Franks, who want controls on short selling, oversight (with all it's delays) on his actions, Hank Paulson could well decide to tell them go Fuck themselves.

Hank is 63, immensely wealthy, can readily get another job, is no doubt going to be replaced whoever wins the Presidential election.

Why does he want the hassle ?

Hank was very up beat and confident over the weekend - exuding steely charm as he circulated through the TV studios and saying basically ...Hey folks it's Hank's way or NO way.

Just imagine ....what would happen if Hank resigned ... or even threatened to resign ?

He really knows the shit the market is in ...According to page 20 the Goldman Sachs 10-Q regulatory filing for the first quarter of 2006:

During the three months ended February 2006 and February 2005, the firm securitised $19.25bn and $15.24bn, respectively, of financial assets, including $18.15bn and $14.43bn, respectively, of residential mortgage loans and securities.

2 pages later ... exposures to Variable Interest Entities “which primarily issue mortgage-backed and other asset backed securites and collateralised debt obligations” included $22bn of CDOs, $2.9bn of “asset repackagings and credit-linked notes” and $6.5bn of “mortgage-backed and other asset-backed” securities.

Just remember Hank (Wall Street's highest paid Exec) was also hauling dowen big potatoes for this...$18.7 million cash bonus (none of those fancy share options for Hank the Bank)for half a year of work as the Chairman & CEO of the Goldman Sachs Group for 7 years, just before joining George Bush as Treasury Secretary

Perhaps more significantly on the day he left ..."Goldman filed with regulators last Thursday for a sale of Mr. Paulson's 3.23 million common shares, worth $491.6 million based on that day's closing price."

Meanwhile his cronies on the Street have magically got their Get out of Jail card by putting on their magic Cloaks and becoming regulated Banks ! With one bound they are free!

Update on Shoes waiting to drop (UK section)

Already we note that the crazy restrictions placed on short selling have been extended to GM and Ford creating a false market in their shares. This will simply build up expectations of a fall ....they wouldn't demand a stop on s/s unles there really WAS / IS a problem.

Apparently their addition to the list of over 800 financial companies relates to their crdit arms. Ford owns Ford Credit outright, and GM qualified through its 49% stake in GMAC and its mortgage unit ResCap.

This also reflects on Bradford and Bingley Bank (which we have been following here) their Mr Crawshaw (now suffering from stomach Cramps) who very cleverly bought up to a maximum of £12bn worth of mortgages from GMAC-RFC (the US's 11th largest mortgage lender) .

Those home loans (now turning sour big style) were to be bought in quarterly tranches, worth a minimum of £350m per quarter, until the end of 2009.

Five tranches are now left to buy, by the hugely loss making bank - so they are committed to spending a further £1.75bn to fulfil their legally enforceable side of the bargain.

GM shares dropped 11.7% yesterday.

B & B shares are trading at a near lifetime low of 26p on the expectations that the FSA can find someone who will pick up this poisoned chalice.... an increasingly unlikely propsect as the company has been hawked around the City for weeks. The shareholders who are the Banks who supported the recent share issue will be happy to take the loss if they go into administration and be done with it.

Nobody amongst them ,evidently has the heart to pick up this pile of sepsis.

Anybody who has failed to heed the call already, who has funds with B&B Bank are advised to get round there sharpish and withdraw anything they may have. Relying on prompt receipt of their funds via a Government inspired / sponsored guarantee is hopelessly optimistic.

Waiting for the next shoe to drop....

The US Treasury International Capital (TIC) data for July 2008 released last week has gone fairly unremarked today .

Data published yesterday showed total net purchases of U.S. long-term equities dropped to US$6.1Bn. vs. US$53.4Bn the previous month.
The figures for April - July show a deckining interest in overseas buyers in US dollar denominated assets - Net Long-Term Securities Transactions
April US$ 116.1 Bn May US$ 83.2 Mn.Bn. June US$53.4Bn. July US$ 6.1 Bn.The major problem is of course that buyers of uquties are uncertyain about values - The domino effect is in play. EVERY insurance company, brokerage, financial institution, REIT, pension fund, money market fund, bond fund, annuity fund, hedge fund, etc is holding derivatives.

This is the problem.

Know one knows the the market value of the derivatives they hold and second, those that have foreclosures, bankruptcies, etc, are producing less income. The net effect is that assets are less than face value and income is less than planned fior. Together they are a double edged sword affecting both capital and income stream.

It is this bottleneck that Paulson's proposed legislation will allegedly unblock

Paulson's Bill initial text is here.

Treasury officials now propose buying what they term troubled assets, the Bill is rather vague (see below) . In its latest guidance on the bad-debt fund, the Treasury said firms that are headquartered outside the U.S. will now be eligible for assistance.

The troubled assets are described ...

(1) Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

Which can be read to mean anything (and probably will) from a strauight domestic mortgage through to a handwritten IOU.

The most remarkable thing about the roposed Bill (which appears to have received no mention so far) are the powers Paulson seeks for himself ...

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency

We need to see the Final Bill , but with these unquestionable powers - limited only by a fund value of US$900Bn. to draw on, it is tantamount to a financial dictatorship. Funny way to describe the workings of the Market.

Will this affect the financial prestidigitators ? The money jugglers, the fund managers, the back room boffins who built , named, re-defined debt as an asset and then sold it ? Many. Many times over ?

No, they will move on to pastures new, they have been through junk loans, S & P, dot,com boom and bust, there are fresher fields and newer pastures , fresher mugs to screw, -nanotech, infotech, biotech and cleantech to name but a few.

The thermodynamic laws of financial affairs have kicked in and the market entropy has kicked in, big style but there are plenty of opportunities waiting. Those out of work bond /CDO /SUV /SIV /SUV salesmen have a smile on the their face, like Bill Loman they have a shine on their shoes.

Just wait for the next wave, the next shoe to drop when GM and Ford come to Washington with the begging bowl .. when Boeing who have a monster strike brewing and can't get the Dreamliner aloft , who have half lost the Air Force tanker deal start knocking on the Treasury door....



Incidentally Boeing's biggest customer , who has US$19 Bn of orders with Boeing is International Lease Finance Corp (ILFC) a wholly owned subsidiary of troubled AIG. Chairman Steven Udvar-Hazy, is looking to buy it out of AIG... but needs the money ..say US$8Bn.

ILFC has orders with Boeing for 102 commercial jets, 74 of which are 787 Dreamliners.

Now how would you like to fund a buy out of a company from an ailing insurance giant who have already run out of money, whose biggest supplier has problems and whose customers are the world's airlines .. who are decreasing in number daily....

MORAL

Wealth creation. Without it, you are fucked as a nation.

Just between ourselves.....

In reviewing the current and ever changing financial markets it is difficult not to bring to mind the remark of John Maynard Keynes when he was askedin 1932 if there were any precedent for what had happened to the world’s economy. He replied , "Yes, it lasted four hundred years and was called the Dark Ages."

Wealth cannot be spread before it is created. The increasingly academic views that previal have confused the notion of the figures attached to the Gross National product with national wealth.

Certainly in the UK, but also in the US a larger and larger share of what is calculated and called the Gross National Product is the product , not of labour, of industry, of endeavour but of actuarial artifice.

We have sat back comfortably transferring wealth making activities either by despatching them overseas, or inviting investment within our shores.

Academics believe that industrious Asia needs the consumer markets of the EU and the US to sustain their burgeoning growth. The fail - or worse still - refuse to see the immense markets building up for them at home.

We neglect the immense sophistciation , combined with prodigious human energy and effort that
now produces the sophisticated tools of modern living. The ubiquitous mobile phones and hand held devices, lap tops, are the product of growing , highly educated, inventive and industrious nations.

They are also a market for good precision engineering - for example China is undertaking amassive upgrade to their railway system.

Tienjin - Peking is a 2 hour drive. The new 35o Km per hour Commuter train undertakes the 115km (72 miles) journey takes 25 minutes and trains run every 3 minutes for 180 services per working day on the 600 seat trains - for which each seat is bookable..

French engineering company Systra provided project management services in combination with the China Academy of Railway Sciences . The US$1.6 Bn rpoject started with the construction of 100 Kms of concrete viaduct using pre-cast concrete sections for speed, and uses techniques supplied in a technology transfer agreement with German engineering company Max Bogel.

Siemens CRH 3 high-speed trains based on technology first used in Deustches Bahn's ICE 3s have been supplied incorporating new technology based on Velaro units which entered service with RENFE in Spain in 2006.

MORAL

Deutches Bahn own what was British Rail Freight see Monday, July 02, 2007 Krauts undertake railway robbery in daylight - CPNI examines it's arsehole , A private Spanish company own British Airports Authority (although this may be dismantled).

It is worth noting that Bank Santander who own Abbey have finally been given approval to buy Alliance and Leicester on the same day that Alastair Darling threw caution and common sense to the winds and allowed Lloyds TSB to takeover HSOB over a weekend without any concern about competition rules.

So a Spanish bank now provides some 30% of UK mortgages.

Just a small reminder that other forces within the EU are doing quite nicely thank you.

Here's a couple they prepared earlier

"Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending; indeed, today subprime mortgages account for roughly 10 percent of the number of all mortgages outstanding, up from just 1 or 2 percent in the early 1990s......

.......we must conclude that innovation and structural change in the financial services industry have been critical in providing expanded access to credit for the vast majority of consumers, including those of limited means.This fact underscores the importance of our roles as policymakers, researchers, bankers, and consumer advocates in fostering constructive innovation that is both responsive to market demand and beneficial to consumers. "

Alan Greenspan
Federal Reserve System’s Fourth Annual Community Affairs Research Conference, Washington, D.C. April 8, 2005


“Clearly, the U.S. economy is going through a very difficult period. Much necessary economic and financial adjustment has already taken place, and monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year.”

“I remain confident in our economy's long-term prospects,”

Ben Bernanke
Federal Reserve Bank Chairman - Testimony to Congress 3-4-08

Schlock'n'oooerrrr

It is a comforting paradox that the clever artifice of Yorkshireman Damien Hirst ** in getting the gullible arrivistes to shell out £110Mn. plus for his trinkets and baubles as the Financial world implodes.

These sales to the mega -rich act as a counterpoint to the signs of distress showing in sales merely to the rich or wealthy. Half of the German / Bentley workforce of 3,500 are on a three-day week, whilst night shifts have been abandoned at the (now Indian owned) Range Rover plant.

Jaguar has been cutting back production levels as demand hs dropped dramatically in the UK and the US.

UK August car registrations were the lowest since August 1966 and were down 18.6% to 63,225 compared to last August.

UK jobless claims jumped by 32,500 to 905,000 - the worst in more than 15 years. Unemployment (the officical highly fiddled figure heavily understates the actual level) inched up 0.1% to 2.8%.

** Damien lives in some splendour in a Gloucester mansion for which installation of the UK's second biggest Photovoltaic Panel system (PVA) is nearing completion . He is investing up to £1.5Mn on a 310kw 1,800 sq. metre solar power system. This system is so large that it will account for almost 2% of the UK's installed solar power. Poer will pricipally be for the hosue and studies, warehouses - it's unclear if any power will the feed the National Grid and also feed back some income.