Wednesday, 29 October 2008
One of the thing I enjoy about writing for electronic media is that you can see clearly waht people want to read about. My Bloomberg column on the return of the MBA was, I see, the most read story on RealClearMarkets.com yesterday. It got a lot of hits on Bloomberg as well. I guess a lot of bankers out there are thinking about what to do next with their careers.
Wednesday, 22 October 2008
In my Bloomberg column I've been writing about the potential for a sterling collapse for some time. Indeed, I went off warning about it, because it never seemed to happen. Now, with the pound down to $1.62 from $2 in the space of a few weeks, it looks to be on the way. In Britain, an economic crisis is always in the end a sterling crisis, and this time around it looks no different. The UK econoy needs to be understood as a currency bubble, which is what has allowed the country to appear so prosperous. With that bursting, the trade deficit is going to be an issue again. So too is the fact that so much of government debt is funded overseas. Why would you want to buy that in a rapidly depreciating currency? There is a complacent assumption out there that so long as the Bank of England slashes interest rates, and the government pumps up spending, the economy will get through the downturn. But a collapsing currency puts real constraints on that, because it pushes up the cost of imports, and may make it impossible for the government to borrow more money.
Friday, 17 October 2008
The notion of using mercenary forces to tackle the pirates off the coast of Somalia is gaining ground. Indeed, the giant US private miliary corporation Blackwater has just put out a press release volunteering its services. Since shipping insurance rates have risen ten-fold this year because of the threat from pirates, you can see why it makes sense. As a plot line for the third book in the Death Force series, this is looking better all the time.
Wednesday, 15 October 2008
Vince Cable continues to be the most over-rated man in Brtitish politics. At Prime Minister's Questions today he's arguing that the government should tell the Bank of England to cut interest rates. But surely the independence of the Bank is about the only worthwhile reform of the British government in the last 10 years? Indeed, I seem to remember interviewing Cable for a Bloomberg column some time ago when he criticised Gordon Brown for telling the Bank what to do. As it happens, the Bank will cut interest rates dramatically over the next six months anyway..but once it starts taking instructions from the government its independence is gone forever. Surely even Cable can figure that out.
Monday, 13 October 2008
The decision to give Paul Krugman the Nobel Prize in economics is the surest indication yet that the world is starting to swing away from the neo-liberal economics that have dominated the world for the past the three decades. I interviewed Krugman once, and I liked him. He's an intelligent man, and his column in the New York Times is always readable. But he is, for an economist, extreme in his anti-market views. The credit crunch is going to make that fashionable. But I suspect we'll pay a price for it in the long run.
Sunday, 12 October 2008
Accoridng to reports in the FT and elsewhere, NATO has now decided it has to directly target the Taliban's drugs trading operations in Afghanistan. It is, they've concluded, the only way they are going to defeat then - a rich enemy is a powerful enemy, and the drugs trade is funnelling millions into the hands of the Taliban. It is, of course, precisely the plot of Death Force, my book which is coming out in January. Who knows, they might even be hiring mercenaries to do the job for them.
Wednesday, 8 October 2008
Among the many ironies of the credit crunch, this one probably deserves more comment. About the only major economy that isn't nationalising, or semi-nationalising, its banking system is Russia. The Government is supporting it's banks but not looking for control in return. Maybe because that is because they know what a state-controlled banking system is like.
Monday, 6 October 2008
One of the great things about writing a series of books aboug a gang of mercenaries is that there is never any shortage of things to write about. I've already been thinking about setting the third book in the series in the pirate-infested waters off Somalia. But in the blogosphere, the idea is already out there already. Excaliber Forums thinks Lloyd's shipping insurers could pay, and it's not a bad idea. After all, people pay for private security for their offices, factories or oil rigs. Why not their ships as well?
Wednesday, 1 October 2008
I womder if it was wise for Gordon Brown to invest so much personal capital in the Lloyds TSB rescue of HBOS? The markets are turning rapidly sour on the deal, and it still has to be approved by the Lloyds shareholders. Which way will they vote? I don't think the fact that it will be a terrible blow to the Clunking Fist if the deal fails will persuade them to vote in favor. Quite the reverse, in fact. Putting himself in the hands of the Lloyds shareholders may yet prove another terrible error by the PM.