Wednesday, 31 December 2008
The catastrophe of Gordon Brown's response to the recession is becoming clearer by the day. By boosting public spending, he has shattered international confidence in the UK economy, and the predictable result has been a flight from sterling. There is a strange idea around that this is somehow good for the British economy. However, it is looking more like Robert Mugabe economics - let's call it Mugabenomics - every day. Printing money and devaluing the currency isn't the answer. Just take a look at what is happening to the Hugh Street. A whole string of retailers are going out of business - Woolworths, Whittards, Officer's Club, Adams - because most of the stuff they sell is imported. It's soaring in price, but they can't increase what they charge, so they are shutting down. The damage that does to the economy far outweighs any boost from the fiscal stimulus. In my Bloomberg column today, one of my predictions for 2009 is that Britain will have to call in the IMF - and that is looking more and more accurate all the time.
Tuesday, 23 December 2008
Sunday, 21 December 2008
I liked Thomas Friedman's column in the New York Times this morning. You can read the whole thing on the link, but here's the key passage. "China is not going to rescue us or the world economy. We’re going to have to get out of this crisis the old-fashioned way: by digging inside ourselves and getting back to basics — improving U.S. productivity, saving more, studying harder and inventing more stuff to export. The days of phony prosperity — I borrow cheap money from China to build a house and then borrow on that house to buy cheap paintings from China to decorate my walls and everybody is a winner — are over." Spot on. But it applies even more forcefully to Britain than it does to the US. More borrowing, more state-aid, none of those are the answer. The UK economy needs to re-structure, which will involve some pain. It is extraordinary how few of the economic commentators in the UK are making this point.
Saturday, 20 December 2008
I suspect the markets are far too complacent about the outlook for Sky. I've just installed the new Freesat + box and its a great piece of kit. The digital reception is very good, and I can record anything I like at the flick of a switch. There are more than enought channels there to keep the average person happy -a financial channel like Bloomber would be a good addition to the mix, but I'm sure those will come in time. Piece by piece, Sky's position is being eroded. You can get HD TV and recording facilities from Freesat. You can get sport from Setanta (or the web). You can get all the films you want from LoveFilm or your recorder. What exactly is Sky charging £40 a month or more for? It appears an increasingly arrogant organisation. Look at the way they put their prices up every year. Why? Most private companies reduce costs and prices. Sure, it works for a while. But Sky isn't a value proposition anymore, and in the mass market you have to be offering value. Once the consumers decides you don't, you are toast. You'll never get that reputation back.
Tuesday, 16 December 2008
Catherine Philp makes some telling poits in The Times today about military intervention in Zimbabwe. The British she argues care a lot more about what is happening there because we still feel partly responsibile for it, and the unfolding crisis hits home a lot harder than similar event in the Congo or elsewhere. But she thinks military force isn't on the cards. I wonder. The force would have to be a lot smaller than people imagine - my research for Fire Force suggests the Zimbabwean Army would crumble quickly against a modern, well-equipped army.
Monday, 15 December 2008
Reuters reports that the Mugabe regime in Harare is plotting to invade Zimbabwe. Oh, and the cholera outbreak afflicting the country is part of a plot to soften up the country before sending soldiers in. I was interested to see that because part of the plot of Fire Force, the sequel to Death Force, is that the President of Zimbabwe will use the threat of foreign soldiers interfering in the country, to bolster his regime. It's pretty obvious stuff really. Dictatorships usually do that. But it is still gratifying to see it coming true. The plot of the book feels more and more realistic all the time.
Monday, 8 December 2008
Over at Bearwatch, they are having a go at me for the piece I wrote in The Spectator about gold. The graph shows the performance of the gold price over the since 2005. But you can prove anything with a chart. That was a commodity bull market, when the price of copper, wheat, oil etc soared. Over thirty years gold has done nothing - which is precisely the point I was making.
The calls for the use of military force against the regime of Robert Mugabe in Zimbabwe are growing all the time. The Archbishop of York, John Sentamu, called for that yesterday, and the Telegraph backs it up with an editorial today. I follow this with interest, since it is precisely the subject of the sequal to Death Force, called Fire Force. It looks as if the collapse of Zimbabwe is coming close to a tipping point where the country becomes a humanitarian disaster. But is there really an appetite for military intervention. I suspect a small mercenary force financed privately is still the most likely option.
Wednesday, 3 December 2008
I was pleased to see my Bloomberg column on piracy getting picked up in papers in Seattle, Taiwan and India, amongst others. I guess people are interested in pirates - one reason I might well use that as the subject of the next Death Force thriller. My main point was that you can't deal with pirates until you deal with the chaos in Somalia. I have a feeling that in the next 20 years, the world is going to start getting involved in Africa again. You can't just leave a whole continent in chaos. But what? Not a neo-colonialist soilution - no one wants that. Something more imaginative is needed.
I only follow Guy Hands's acquisition of EMI here because whenever I write about them for Bloomberg, suggesting in the mildest possible terms that it wasn't the greatest deal ever, I get a furious call from their PR people. So it was interesting to read in the the FT today that more money had had to be put into the company and some of the senior managers had left. Still a great deal? I suspect it may be a while before it shows a profit.