Thursday, 31 July 2008

Touching A Nerve On Oil

I notice that my Bloomberg column on the oil price was the most read piece yesterday on Real Clear Markets. That is interesting in itself. I suspect that many people like me are watching the oil price as the best single indicator of where the global economy is going. At $140 to $150 a barrel, it's going down the tubes. At $80 to $90, the crisis is cancelled. Right now, it is hovering somewhere between those extremes.

Wednesday, 30 July 2008

The Demise of Labour

There's a great piece in the Telegraph about the deminse of the Labour Party by Ian Martin. Increasingly, Labour looks like the trade union party, similar say to the French Communist Party. But what's the core vote for a union party in modern Britain. I'd say somewhere between 5% and 10% of the electorate. As I've said before, this is going to get a lot worse for them.

Saturday, 26 July 2008


Controlled Greed doesn't quite agree with my piece in the Spectator about Starbucks. They reckon it's just a growth stock that has run out of steam. Maybe. But it was also part of the bull market zeitgeist. And that is gone now.

Friday, 25 July 2008

The Stones and EMI

Whenever I write anything about the private equity financier Guy Hands - such as this piece for Bloomberg - I get a furious phone call from his PR man Andew Dowler at Financial Dynamics accusing me of irresponsible journalism. So what should one make of the fact that The Rolling Stones are leaving EMI? Well to save on Mr Dowler's phone bill, I'll just say it's great news for EMI. Who wants to listen to that old rubbish anyway. Hands has recruited Elio Leoni Sceti from Reckitt Benckiser, which makes products such as Finish diswater tablets, and lost Keith Richards. Surely no one could argue that wasn't the right way to run a record label - could they?

Glasgow East - It Just Gets Worse For Labour

The real point about the Glasgow East by-election disaster for Labour is that things just keep getting worse for Labour. It's a bear market, and I don't think we are anywhere near the bottom yet. I've blogged on this point before, but eveything that has hapened since just seems to confirm it. Blairism was like Gaullism. Without the General, there wasn't any such thing as Gaullism anymore. It was entirely built around a single personality. The same with Blair. Now that he is gone there is nothing left to lead. So the idea that there is some natural 'bedrock' the Labour Party can fall back on is nonsenical. It's zero.

Thursday, 24 July 2008

More On The Oil Price

Top add to yesterday's points on the oil price, a couple more indicators that the turning point has been reached. A French company called CMTV is putting out sailing ships to carry cargo. And why not? Most cargo isn't in any great hurry. Ships were only using oil because it was cheap and easy. Meanwhile the FT reports that another 90bn barrels of oil lies waiting to be exploited in the Artic. Demand is coming down and supply going up - just as you might expect after a spike in the price. Soon prices will be coming down as well.

The British Recession Gets Worse

The Irish Independent has picked up my Bloomberg column this morning about the recession that is looming for the UK. The news today is, of course, even worse, with a 3.6% drop in retail sales, the worst monthly figure since 1992. The point is that the economic news keeps surprising us on the downside. So long as that is true, the outlook is grim. And, as I keep saying, we haven't seen the attack on sterling yet, which is where it really get nasty. But I think we can be sure that the turning point hasn't been reached until there is a significant devaluation of the currency.

Wednesday, 23 July 2008

Mercenaries wages

The Glasgow Herald reports that Private Security Corporation staff in Iraq - otherwise known as mercenaries - are making £250 a day, or £7,000 a month. It's a good wage, I suppose, although given the risk of dying, it's hardly a fortune.

Has The Oil Price Turned

Probably the most interesting question in the financial markets right now is whether the oil price has turned. The fall in the past couple of weeks has certainly been dramatic: oil has shuttled back down to $126 a barrel from its peak in June of $145. Lehman Brothers are predicting that it will be back down to $90 by the start of next year, which may well be the new long term price. What happens to oil matters because it may well signal a turning point for the global economy. If oil falls, inflation will drop back, and central banks will start cutting rates again, helping out crumbling property markets and flagging consumers. So, if you only want to watch one price, watch that one.

Tuesday, 15 July 2008

Faulks as Fleming

My review for Bloomberg of Sebastian Faulks's James Bond book has been collated along with a lot of the American reviews of the book on one of the Bond fan websites. Reading through them, it's interesting that the American reviews were a lot more hostile than than the British ones. I suspect that the American thriller audience is a lot more demanding than the British one - and Faulk's glib effort won't satisfy that market.

British vs American Journalism

There's a good piece in the FT today by Gideon Rachman dicussing the difference between British and American journalism. His conclusion is that although a lot of American journalism may be boring and stuffy, its worthiness is still preferable to the sloppiness of much British journalism. I tend to agree. I worked at The Sunday Times for ten years, and then started writing a column for Bloomberg. The insistance on fact-checking at Bloomberg is a drag sometimes, but the net result is surely better. American journalism is, in the end, more satisfying for being accurate. Meanwhile, the British press would do better to ponder its declining circulations, and wonder if it is really doing everything right.

Tuesday, 8 July 2008

Simon Mann

There's a great piece in the Independent today about the Simon Mann coup plot. A must-read.

Monday, 7 July 2008

Crisis What Crisis says Jim Brown

Probably the end of the last Labour Goverment came when Jin Callagahan was reported as saying 'Crisis? What crisis?' . Even though he was apparently misquoted, it showed how out of touch he'd become. I wonder if Gordon Brown telling us to watch what we spend on food will mark a similar point - a final nail in the coffin of a collapsing regime. After all, most of us know that the reason we have less money is because of his mis-management of the economy. Telling us its our fault, and we should just econmise, is only going to make things worse. Yet again, his ability to completely mis-read the public mood is breathtaking.

Sunday, 6 July 2008


There's a nice review in The Guardian by Peter Beaumont of a new book on mercenaries called War Plc. He makes the point that warfare has been extensively privatised, with PMCs carrying out many of the tasks that used to be performed by conventional soldiers. The Independent makes a similar point, with a story about how British bases in Afghanistan and Iraq could be protected by private firms. I suspect this trend is going to continue - a theme I'm exploring in my fictional series Death Force which kicks off in January. The 20th century very much belonged to big public armies, but before that warfare often belonged to small, private armies (or at least private-public partnerships). Many people seem to think there is somehting odd about the return of the mercenaries, but you could just as well view it as warfare getting back to normal.

Thursday, 3 July 2008

The UK Faces Recession

Every set of numbers released right now suggests the UK is slipping into a serious recession.The housing market is collapsing, retail sales are falling, and now both manufacturing and and services are slowing down sharply. This could well get nasty. The UK should have had a sharp correction in 2001/2002 but Gordon Brown unleashed a tidal wave of government spending, the first that Britain had seen for thirty years or more. That created an illusion of prosperity that has been unsustainable. People are drwing comparisons with the last recession of 1990/91, but that was mainly caused by currency problems. Once those were cured - fairly simply by pulling out of the ERM - the underlying economy was pretty sound. That isn't true today. The underlying economy is over-taxed and over-borrowed. In fact, this could well be the worst recession since 1980/81.

Tuesday, 1 July 2008

Bond - Craig vs Faulks

For everything that is wrong about Sabastian Faulks's new Bond book 'Devil May Care' take a look at the trailer of the new Bond movie Quantum of Solace. At least the film makers understand what Bond is all about - modern, edgy, cool - even if the 19th-hole bores that re-created a 1960s's Bond don't.