OxBowBusiness

Me, me, me ... I said it first ... the sequel

2008-10-24T09:28:00.001Z

This is a simulcast

It's official, the quarter ending the end of September shows that the UK Economy has slowed by 0.5%. Not a massve slwing down of course and such official statistics are subject to major errors but here is my comment on what has then happened.

Both the BBC and Financial Times have said that because ONE QUARTER's results have shown a negative return, Britain is therefore entering a recession.

The BBC said: recession looms

The FT said: Data confirm UK on brink of recession

Firstly, since when does ONE RESULT consitute a trend?

Secondly, whenever I talk to anyone about statistical analysis and forecasting, I advise them to consider a minimum of fiver periods/quartrs/years before they get too excited about anything.

We ought to look at the trend rather than sitting smugly at the thought of having said, "Me, me, me ... I said it first." Take a look at where these estimates of GDP rates of change have come from: http://www.statistics.gov.uk/cci/nugget.asp?id=192 You will see here the FULL picture of what is happening. Moreover, do take into account what the FT says, You should take the data on offer there and take a look at what is happening sector by sector. For example,they tell us that manufacturing has fallen by 1%: OK, that's serious; but since manufacturing accounts for only around 12% of the UK's GDP, that's not that serious overall is it?

The data released on Friday are the "flash estimate" of GDP, a number notoriously subject to revision. There was a grain of comfort in the fact that GDP for the second quarter was unrevised and showed zero, rather than declining, growth. (See http://www.ft.com/cms/s/0/7e9feb8a-a1a4-11dd-a32f-000077b07658.html?nclick_check=1)

These people have been desperate to drive house prices down for years, now they are desperate to build us all up for a year of a recession. The me, me, me brigade has, however, already started to doom monger their way to the front of the queue by talking about a slump for the UK. These people. In China, they get it right when they ask their journalists not to behave like this: scare mongering. I think the Chinese are right; and NO ONE is talking about censorship here either.

Me, me, me ... I said it first

2008-10-20T07:09:00.001Z

This is a simulcast.

The latest of our "experts" to "confirm" that the UK is already in recession blethered forth today. Ernst and Young did it today.

This nonsense replaces the dash to be first "confirm" the downturn in the housing market.

That's not to say E&Y haven't got it right, it's the littany of reports all making the same predictions that's getting on my nerves.

DW
Sent from my BlackBerry® wireless device

Marks & Spencer's Ordinary Man Again

2008-10-07T14:18:00.001Z

The Financial Times is catching up with me at last. You know I have been spilling the beans on just how ordinary Stuart Rose at M&S really is. Well, in a recent article in the FT, I finally was vindicated> Read the article here:

http://www.ft.com/cms/s/1/4bc205c0-905d-11dd-8abb-0000779fd18c.html

Oh to be right so often is a heavy burden!

I remember 18 months or so ago someone I know said Rose was, "A class act". Clown!

Duncan Williamson

Financial Mess

2008-09-19T08:11:00.001Z

I hesitate to use the term financial crisis for what really is a financial mess.

I know that many people want to talk about the regulation of the financial markets and the answers comes back that we must let the market mechanisms allow the market to work. That sort of thing. However, how can it be right that people are allowed to work inside a financial system and make large amounts of money out of other people by creating havoc, starting unfoudned rumours and telling lies in order to drive prices down?

What price the efficient markets hypothesis? Equality of information, the price reflects the value of all knowledge ... not working at the moment is it?

People like me have been saying for a long time that the situation in which 955 of all foreign currency transactions are speculative in nature surely cannot be allowed to persist. It has done for decades. Short selling is the latest in phrase, just described above; and it has been allowed, maybe even encouraged, for at least five years. The housing market has been abused for at least the last five years in the UK and probably the last ten. Easy mortgages, people granted loans who do not qualify for them ... the sub prime problem. People have been encouraged to withdraw the equity in their homes in order to pay for long haul holidays and new cars and extensions to their homes. All of this has to be paid for eventually but nobody realised that the day of reckoning had to come. Now there are many people facing repossession of their houses and the people who are bleating most about this situation are the people who encouraged it in the first place: the politicians and financiers of this world.

The people who are going to suffer now are the people who believed in the shangri la of what they thought was free money. I used to tell my missus that you can't spend your money twice. I say the same to everyone else, people have been encouraged to try to spend their money twice: they now know they can't. You might call these people foolish and I am sure some people are. However, when someone convinces you with powerful marketing campaigns that all you have to do is to take a drive to your bank and withdraw the tens of thousands of Pounds you need, how can we blame them? These people are not sophisticated: many of them will be gullible and some of them will be greedy. But the concept of thrift has been abandoned ... until now. Thrift is back!

Have you noticed, by the way, that many of the world's biggest buildings are owned and/or occupied by financial services companies? funny that. Have you also noticed over the last few days how many people have been working in the financial services industry? There is talk of 100,000 of them in the UK alone losing their jobs now. If so many are losing their job, how many are left? 500,000? 1 million? I don't know but it's obviously a large number. My nephew was unfortunately caught up in the Lehman collapse and now he is looking for a new job.

We have swapped an industrial base for an ethereal industry: you might think that is a good thing, I don't.

I have just watched a snippet of an interview on Sky News between some Sky News "Experts" and Gordon Brown. One of these experts asked Brown if he thought the financial crisis in the UK was his fault. Clever question or stupid? Answer: stupid. If you believe the Prime Minister as Chancellor of the Exchequer was responsible for some or all of the mess, the technique to use is to challenge the man with specific questions of where he might have gone wrong. A simple, are you to blame question is easily, very easily, side stepped.

Watch this crisis carefully and critically: the gamekeeper and not the poacher is going to have to carry the can yet again!

Duncan Williamson

Woolworths

2008-09-18T09:05:00.001Z

Just a thought to get your calculator juices flowing.

In an article on Woolworths in the FT today (Woolworths plans job cuts to reduce costs by Tom Braithwaite and Lucy Killgren) I noticed the sentence in which they told us about the costs of interest the company is facing. They said that last year Woolworths paid £8.8 million in interest on borrowings of £243 million. This year they have spent £18.6 million on interest on borrowings of £286 million.

The questions are

1 What is the average rate of interest the company paid last year?

2 What is the average rate of interest the company paid this year?

3 What is the company’s marginal rate of interest?

4 What is the link between interest rates and risk evident in this information, remembering that Woolworth is a company in trouble?

Fascinating stuff!!

If you want to check your answers with me, just let me knkow!!

Duncan Williamson

Oil Prices Again

2008-09-04T05:28:00.001Z

This is a Simulcast

They are at it again: those people trying to convince us that the financial markets are working efficiently and fairly and have nothing to do with speculation.

So there was a financial “expert” blethering away on BBC World yesterday: he was EXPLAINING why the Dollar has surged and why the Pound is falling in value. He didn’t mention speculation in this context and yet we all know that 95% of all deals in foreign currency are to do with speculation.

Then this Expert said that because of the “... collapse of the oil price ...”. I must repeat a post I made a couple of weeks ago when I talked about the language of the oil price. Why do they say the price has collapsed? By using the word collapsed they are suggesting that the high prices reached up until about two months ago were normal or expected or acceptable. When the oil price was surging from $90 a barrel to almost $150 a barrel, they said the price was unsustainable ... because of speculation ... because of the disequilibrium of supply and demand. All nonsense of course: it was all because of ill informed speculation.

I proved with the example of the cutting of production by the UAE for annual maintenance having no effect on prices that supply and demand had nothing to do with the oil price.

So this expert did his best and he mentioned a number of possible factors: interest rates in Australia, the need for changing interest rates in the UK, collapsing oil prices, the threat of recession in the UK. All laudable words and much of it pure drivel. I keep meaning to make notes of the names of these experts so that I can name and shame but I think I am always just overawed at their bare faced effrontery. One thing you should notice is that the BBC doesn’t use the same non BBC expert very often. Wonder why?

More on Oil Prices

2008-08-06T16:53:00.001Z

A simulcast

I have been getting no responses to my questioning of the rises in oil prices over the last year or so. I have been questioning the sentiments behind the price rises for almost the whole of the year: not just a bandwagon. Here are extracts from an article in the FT from 4th August. I think it is telling for two reasons:

language used
the reasoning and its acceptance

The language used in the article reflects my concerns in my previous Blog entry on this subject: that is, the journalist is worried about falling prices; oil prices plunging and falling prices amid concerns over the global economy and its performance. Where is the hysteria that accompanied the stratospheric rises that the world suffered from as speculation fed the rise in crude oil prices? Nowhere!

Probably more importantly comes the reasoning behind the price rises: take a look.

This is what they say in the article, included here verbatim:

Other factors pushing down oil prices included higher supplies from Opec, which mainly reflected Saudi Arabia's decision to boost its oil production to the highest level in more than 25 years.
Some traders also expressed doubts about the strength of Chinese consumption, saying it had been artificially boosted by stockpiling ahead of the Olympics.
However, traders warned against calling the end of the oil rally, since prices have oscillated between $130 and $120 for the past 10 days without a clear trend emerging.

These speculators who have probably traded misery over food prices and billions of dollars over the last year as they raped the world are now hiding behind falling prices but no one is pointing the finger at them. Except me of course.

From Oil falls as fears for growth intensify

http://www.ft.com/cms/s/0/c4edfb02-624f-11dd-9ff9-000077b07658.html

Duncan Williamson

The Missing Link?

2008-08-05T05:59:00.000Z

What links the following three gentlemen?

* Willie Wash: CEO of British Airways
* Michael O'Leary CEO of Ryanair
* Alan Joyce soon to be CEO of Qantas

Write to me at blog@oxbow.org.uk to learn the answer if you don't already know it.

Duncan Williamson
!
Sent from my BlackBerry® wireless device

More Oil Price News

2008-07-30T06:24:00.001Z

Have you seen the way that the fall in crude oil prices is being reported now: the price is slipping they are saying. Three weeks ago they were bemoaning the apparently inexorable rise in the price of crude ... implying it is such a bad thing. Now they are viewing it from the eyes of the investor who has bought at the top of the market and who is now suffering.

They are trying to claim now that demand for crude is reducing and that is why the price is falling back. The strengthening dollar is seen as a factor too. It’s hardly strengthened though has it? Just take a look at the current exchange rates and see if you think the Dollar has strengthened.

Duncan Williamson

MS Office Live

2008-07-29T14:22:00.001Z

Microsoft Office Live looked like a good idea so I tried it. I uploaded some files, I created directories and I moved some files around. I uploaded word files, powerpoint files, excel files, jpeg files and pdf files.

All worked nicely so I thought I would share some files with a colleague.

It performed embarrassingly badly so that I had to write and apologise and promise never to try to send them my files in that way again.

Bill Gates has retired? He should never have been allowed to get away with his laughable systems in the first place if you as k.

Oil Price

2008-07-22T15:08:00.000Z

There is a story in today's The Gulf Today newspaper that says that the UAE will be significantly reducing its output of oil for 40 days later this year. This is so that they can carry out essential maintenance of their equipment.

That's the world's fifth largest oil exporter cutting output by up to 7.5%.

Did the price of oil rocket today? Has there been a price spike?

And they say recent surges in the price of crude oil is based on supply and demand.

My @rse!!!

Duncan Williamson

Sent from my BlackBerry® wireless device

Sky products

2008-07-07T15:01:00.001Z

I have tried to upgrade to Sky+ today. I tried through interactive television and got an error message. It told me to call a number and did ... I spent ages waiting but for nothing.

I went online and logged in to try again. Two screens into the process I was given an error message and told to call a number.

I called the number and hung on for ages but no one wanted to or could talk to me.

I probably won't bother with Sky+ now.

Discuss this true story!

Duncan Williamson

Sent from my BlackBerry® wireless device

Economic Indicators

2008-07-04T06:20:00.000Z

I have written before about my three key economic indicators for developing countries:

+ What the girls are wearing
+ What the boys are driving
+ How many houses, flats and offices are being refurbished

Take a look at the article in the FT today that gives neck tie sales as an indicator for the UK at the moment. Indicative of a down turn apparently.

Duncan Williamson

Sent from my BlackBerry® wireless device

There's a Recession ... isn't there?

2008-07-02T01:48:00.001Z

There's that Little Britain character famous for saying, "yeah, but, no, but, yeah, but, no, but ... "

This is what it's like watching business news from around the world.

British financial reporters have spent at least five years talking about the coming doom in the UK housing market. When the doom arrived it was for many reasons the doomsters had not thought about. Right answer, wrong working our maths teacher used to say!

I watched the BBC Business News from Singapore the other day and they trotted out this poor chap who said that there's probably going to be a recession. Yeah, there is a recession. Oh!, the official definition of a recession ... but, we think there will be a recession. Maybe starting in July.

Keep talking lads!

Duncan Williamson
Sent from my BlackBerry® wireless device

Massive new idea from Procter& Gamble ... not

2008-07-02T01:37:00.000Z

P&G have come up with this fantastic and revolutionary way of managing their production resources: put them near to the customer.

Erm, isn't that what we used to do before all of those bright young things decided that outsourcing and centralising and optimising were the best things since sliced bread?

I learned these things under the heading of the location of factors of production. Wonder what they call it these days?

Duncan Williamson
Sent from my BlackBerry® wireless device

Zimbabwe

2008-06-24T12:05:00.000Z

After many, many years the cat is finally out of the bag and that repressive and murderous tyrant Robert Mugabe is openly doing what he said he would: murdering his own people, stifling anything resembling democracy and so on. I wonder what he will say when he meets his maker?

Now, however, we can hear pious and piteous bleating from the international community: why so long in coming? Why are these people only taking notice now? The people of Zimbabwe have nothing to look forward to now that Mugabe is getting away with murder.

There is talk of further sanctions being levied against the top 100 or 200 people in Zimbabwe. Whooppeee! Does that mean that their ill gotten gains that have been stashed away in foreign bank accounts will be confiscated and shared between the people of Zimbabwe. As if. Ever heard of numbered Swiss bank accounts? Ever heard of secret identities? Does anyone think that these people haven't hidden everything?

How about stopping them travelling? I have never done it and never will, but I think it would take me about a day to source and place an order for an illegal passport from just about any country I liked. I don't doubt some of these top people are way ahead of the curve on this one.

By the way, in case you don't know. In the glory days when Mugabe was able to travel freely, for example to collect his honorary degrees from the UK and his knighthood (wonder where that was conferred), he normally took a plane load of cronies with him and they raided the shops for weeks on end. How much money did they plunder to finance those trips? And did his wife really need Rolex watches costing many thousands of Pounds each? Funnily enough, everyone knew what Mugabe was doing then but who even suggested he was doing something wrong? No one: not even our own bleater in chief, the one and only Gordon Brown.

Hacked

2008-06-03T22:08:00.000Z

Visitors to the home page of my site may have noticed over the weekend that some clown thought it would be funny to hack it, so he did. I say he because it was probably some stupid little man with tiny testicles.

There was a message on the screen that said, Stop all wars. Yeah ... and the reason you hacked my site rather than setting up your own site with this laudable message? Except of course that I am providing free publicity by posting this blog entry.

He left his email address and if you’d care to write to him, say 1,000 times a day for a month, perhaps he will lose interest in his nonsense approach.

The address is h3pt3k@gmail.com but don’t tell him where you got it from or he might hack me again and I have got his message and I do agree with it.

Trip to Headingley

2008-05-31T11:18:00.001Z

I just spent a day with son Andrew at Headingley cricket ground, home of Yorkshire County Cricket Club. We watched the opening day of the Roses match along with 2,000 + other souls. The weather was kind but the sun hardly cracked the flags as we say.

An entertaining day’s cricket saw Yorkshire climb to 302 for 7 by close of play. Some good batting and some good bowling. I was fascinated to see the levels of concentration of the players too: after hours in the field, when a ball skittered to them, they were ever alert. Good to see.

I was disappointed not to see as many international players as there could have been. For example, Michael Vaughan wasn’t playing because I assume he is resting between Test matches. That means he spends his season being unavailable for his County. Vaughan and all of the others I suppose.

The day started with the pleasant surprise that a return ticket from Halifax to Headingley is only £3.40. Our train from Halifax was delayed 25 minutes. Then we got to Leeds looking to catch the York train. A snotty female porter at Leeds made snide remarks about men not reading their information screens properly when we asked, as is our right, when and where the next train would be. Lo and behold, she put us on the wrong train!! Fortunately, we didn’t go far and found our own way to Headingley after that.

So we walked too far, ran too far; but it was all welcome exercise and even though we missed the firs wicket to tumble, we had right good do!

It only cost £15 for me to get in and Andrew £10 since he is a student and I think it’s more than good value and I like to think I’ll go back again during the summer when they’re playing again.

Gradely!

RBS? What a mess

2008-05-27T15:49:00.001Z

Dima went into a NatWest Bank branch today to transfer some money to my account.

They said they couldn’t o it for him and he should go to the RBS who hold my account.

Now, who do you think owns NatWest? Oh, it’s the RBS.

Funny that

Duncan Williamson

Buy a SIM card

2008-05-03T14:36:00.000Z

I did it before then I got out of the habit as I gave away my spare phone. It cost me a fortune. So I bought a new second phone ... A cheapish but good one.

When you travel abroad look into buying a local SIM card.

At the moment I am paying around 27 pence a minute to call Bangkok from Dubai. As opposed to around £3 a minute with roaming. Similarly when calling the UK.

When I was in Bangkok recently I did the same and made the same savings.

Give your friends and family your new number, don't forget.

Some mobiles can use Skype too: not mine but maybe yours ... Check it.

Duncan Williamson
Sent from my BlackBerry® wireless device

The Rose Rises Again!

2008-05-02T06:09:00.001Z

Stuart Rose, described as a "cllass act" by an acquaintance of mine, has made another business blunder.

Apparently this Marks and Spencer chief was moving into Karaoke bars but obviously he had to be told how incomodious that would look. So he has changed his mind and stopped such nonsense.

Have you checked the Marks and Spencer share price history since Rose took the helm? Not so classy, eh?

Duncan Williamson
Sent from my BlackBerry® wireless device

Telephone costs

2008-04-22T06:40:00.001Z

There is an interesting chart in the Economist this week: the real cost of an international phone call. It says, for example, "A one-minute fixed-line call from America has fallen by 98.4% in real terms since 1973." Go and read what it says about prices in Japan, though: http://www.economist.com/daily/news/displaystory.cfm?story_id=10797453&fsrc=nwl

The most fascinating aspect of this very short article, though, is this comment from someone with the nickname sanmatinian writing on 21st Apri 2008 at 19:49:

Just to put things in perspective, I always like to remember a personal experience: during the sixties, I, a machine design engineer, used to fly quite often to America because the fare Lisbon - New York had the same price as a three minute phone call and whereas with luck you could catch the plane on that very day, you always had to book your phone call three days in advance. Almost unbelievable today, but very, very true.

Duncan Williamson

Building site

2008-04-17T14:15:00.001Z

This is a simulcast because of the business ideas in it.

Outside my hotel room this week I have been treated to the spectacle of a building site. Whatever the building is going to be, they finished laying the foundations at the start of the week and they have been working like ants ever since.

I watched them delivering and pouring concrete JUST IN TIME. Then watched as they have built things, laid things, moved things by crane. I am also interested in how they are storing things.

There are a couple of safety engineers and others with me this week and they are aghast at the way there are no rails, barriers, guards ... like what there would be elsewhere!

As Jerome K Jerome said, I love work I could stand and watch it for hours. I always thought that should have said, I could SIT and watch it for hours; but who am I to correct such a genius?

I have taken a couple of photos and really hope that I will be on this side of the hotel when I come back next week.

QUESTION: what does the K stand for in Jerome K Jerome. First to answer wins a prize.

Just an Ordinary Chap 2

2008-04-03T10:35:00.001Z

The fuss over Stuart Rose and his Chairmanship at M&S is takng a turn for the better.

Everyone knows that Rose did something wrong and in the nature of the male of the species, the latest news on the subject says thace saving exercises are taking place ... these are supposedly grown men. Men in high positions of great responsbility, don't forget.

Appaently, a ten page letter has gone out to some of the larger shareholders trying to explain what they really meant. Here is some of what they have come up with.

the annual re-election of Sir Stuart

a stipulation he would not receive a pay rise and

the promise of a senior independent director to help check his influence

Then again, One leading shareholder said the concessions did not address its fundamental objection. "This doesn't get away from the core row, that Rose should not be executive chairman," he said. "That is acceptable in the situation of a company under massive distress or in a turnround situation, but this is just wrong."

Another top 20 institution which had also seen the draft letter said it was also not fully satisfied. "The glaring admission is why Stuart Rose could not remain as chief executive and the letter is completely silent on this and I think they need to try to say something on it," he said.

Of course, there are always those who are either easily bought or who are spineless: Invesco Perpetual, one of M&S's biggest investors, came out in support of Sir Stuart on Wednesday night, arguing that it was important to keep the chief executive on board. What, Invesco, does that position do to resolve the fundamentally flawed nonsense that Rose has done something completely wrong?

The quotes are from http://www.ft.com/cms/s/0/020f2f10-00ee-11dd-a0c5-000077b07658.html

Duncan Williamson

Top Tip ... Skip Drivers Beware

2008-04-02T14:28:00.001Z

If you drive one of those waste skip lorries and you run your lorry into an expensive but unoccupied car and then leave the scene of the accident, do make sure that the car doesn't belong to a personal injuries lawyer.

You could also try to ensure that you didn't leave a string of witnesses behind, driver.

DW
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