WhatNext

The ever-unfolding financial crisis moved forward rapidly today. The big news is that HBOS is in the final stages of a shotgun merger with Lloyds TSB, in fact the retail banking and mortgage behemoth is being taken over.

Normally such a giant financial institutional merger would not be allowed as it is totally against normal competition rules. But these are certainly not normal times, and rightly the rules need to be relaxed if it is clearly in the interests of the world at large.

Morgan Stanley shares have fallen 30% today, and Goldman Sachs shares are also plummeting. After watching Merrill Lynch and HBOS being sold short in the last few days it’s clear that Morgan Stanley is now being targeted by more short sellers. These people profit by driving shares downwards and then buy back in at a reduced price. They only lose when the price goes up, so these leeches make money by ruining businesses. Some consider shorting a safety valve for the market place, when the general trend of stock prices is upward.

I believe this practice needs to be looked at closely and either banned outright or, failing this, it should be suspended when any stock moves more than 5% in any trading day.

AIG, after having $80 billion pumped into it, has been, in effect, nationalized, and this is the first time in history that the American government has taken such an action. The reason for this is clear, the economy simply could not survive AIG collapsing.

Barclays has nearly concluded the purchase of the property related parts of Lehman Brothers, which could mean that not all the staff of that company in the US will lose their jobs.

However if you examine the most important bank rate, that for money lent between banks, otherwise known as LIBOR, it’s sticking at a high level and most worrying of all, indicates that money is simply not flowing between the banks, nor will it do so until this rate is lowered.

As a consequence of the shrinking economy the unemployment rate in the UK has suddenly gone to its highest figure in a decade, and although still at historically manageable levels, is becoming yet another thing to worry about.

The governments of both the UK and USA must take a clear lead in acknowledging these problems and dealing with them.

More important than this, they must, as part of the G8 work out a strategy and publicly express it, rather than react in an ad hoc basis.

We all need to clearly understand why some companies will be bailed out whereas others are allowed to collapse.

This drama will become a tragedy unless and until there is international co-ordination between the central governments of the G8 and the major financial institutions.

ASteadyHand

Yesterday Lehman Brothers went bust, and Merrill Lynch was bought for $55 billion by The Bank of America, which is about a twentieth of what its bosses said it was worth less than a year ago. In fact Lehman Brothers were figured to have 110% of the liquidity it needed just one week ago. This is a fast moving avalanche of bad financial news that is set to run for a while. It hasn’t bottomed out as yet, and no one quite knows where it might end.

It is made even more frightening by the fact that thousands of jobs are beginning to be shred as the financial and other sectors of the economy begin to contract. This is the second leg of the nightmare scenario in which the entire economy collapses as it did during the Great Depression. As yet, thank the Lord, there is no new hunger to go with the job losses, companies closing and homes being lost, and let’s all hope it stays that way. But this is a hope, not a certainty as everything is up for grabs right now.

So what happened to make this, and much more happen? It’s very simple; there has been a break down of banker’s trust in each other. Regular people have begun to doubt big time and bankers, those pillars of our society, have lost their faith in each other.

This started about a year ago when the sub prime mortgage market began to implode. That started to show itself with min runs on banks in various countries such as the UK’s own Northern Rock. We saw that dreaded sight of people lining the street trying to get their savings out. Now in the States, with Fannie Mae and Freddie Mac we have more imposed nationalization that, on the surface seems the only way to go to save the situation, but also could be considered illegal. It does also mean that no sane investor in the world will invest anything in British or American banks and many others, until the situation has been brought under control.

One of the main agents of this breakdown of confidence and trust in our system is obvious but needs to be re-stated. The bankers paid themselves grotesque bonuses in London last year £17 billion ($30 billion+) after years of doing so. There is no other way of describing this except for the image of pigs at a trough. This is no different to similar size sums being paid in New York City and had all the hallmarks of people with no thought about the effect of their greed on others.

The American government clearly made a choice not to bail out Lehman Brothers after having done exactly the opposite in previous days with Fannie Mae and Freddie Mac. Were they right to do so, only time will tell?

This is the either worst financial situation since the 1930’s and is another Great Depression in the making or it’s a delevaraging that is long overdue. By which I mean that the financial sector is being downsized by market forces led by Wall Street and was perhaps long necessary. Put another way were there too many banks chasing too little business and therefore putting together untenable and insupportable deals.

In my view the main culprits are probably the central banks, which kept the interest rates too low for too long which resulted in too ample a money supply, and that made people reckless in their borrowing. This type of casino investing and banking has led to excessively liberal capitalism, which resulted in a bust like no other since the war. In other words there was not enough government intervention for a very long time and now there is going to be too much of the same thing.

Wholesale liquidation is what happened in the 1930’s and it was very painful and we are on the precipice again. For a market forces system to survive and prosper there must be trust in the system and therefore we all need, in fact demand an honest and transparent system from here on in.

In the UK exports are about 30% of output whereas in the States this figure is about 12% and as a consequence the UK, with sterling at a lower value will pull through quicker than most other countries.

It wasn’t long ago that I, amongst many others in this country felt that even if our pensions were becoming less and less valuable or workable, we did, at least, have financial security via our properties. Now that has been shot through by the sub prime market collapse, which is going to result in millions of properties going into negative equity.

The one thing we can all agree on is the urgent need for calm heads and steady hands at the tiller of our financial world. We could do a lot worse than look at history and realize that we simply cannot afford to make the same mistakes again.

MuckingAboutOnTheRiver

There are some times that stick in the memory. This weekend was one such time. I have to admit that I was never much of a boy scout, in fact I think I lasted just one or two weeks. I fancied myself in the uniform as a little boy but when I joined up I only lasted for two weeks as the trousers itched terribly around my delicate thighs. Of course I left the group immediately.

Decades later I was invited by my in-laws to help out on the weekend with a scout troop that they were taking on a boat down the river. It was a big narrow boat that looked pretty wide and was 65 feet long. We met on the River Stour near Harlow, a town near the border of two fairly local counties, Hertfordshire and Essex.

We were lucky as it was a day of mild temperature and no rain. We arrived at around 9 o’clock and mucked in as the scout leaders carefully prepared the boat. A short time later we were joined by 7 scouts on the capacious well fitted out boat originally put together by Red Watch fire crew.

I want to make a few points about our time on the rivers Stour and Lee. There are magical places in England that gently seduce you on this stretch of water, with images that Constable would have enjoyed to paint and which are engraved behind my eyes. It could not be more beautiful or succulent, this England of ours on days such as these.

I have never steered a boat like this before but was soon being instructed how to do so, although I admit to wanting someone with the requisite skills to be in charge when the boat traveled into locks with just inches to spare on either side.

It was great fun also learning to operate those locks and sling the ropes to the rest of the team to secure us as necessary. It was great watching the world passing us by in super slow motion, forcing us to relax and appreciate our surroundings.

It’s wonderful to greet your fellow travelers on the side of the river and to wave to the children walking along the towpath. The scout leaders were terrific with their young teenage charges, nurturing, leading but not bullying.

But above all, and most impressive were the seven young teenagers. They were polite, willing to learn, quick to listen to instruction, charming and intelligent. They disprove the generally held theory that our youngsters are a lost cause; they restored my faith in the future possibilities of our country.

ToMyFriendDick

I have an American friend called Dick. I shan’t write his surname because it wouldn’t be wise as he has so many interesting stories in his life that can get him in trouble with bad people who might have long memories.

I was once commissioned to write a screenplay based on a series of incidents in Dick's life in which he was intimately involved with trying to halt a very questionable regime gaining access to nuclear weapons. When I was approached to do the job I told them I had to check out his story for myself prior to writing anything. I gained access to Special Forces and various intelligence agencies that gave me the confirmation I needed.

Dick and I became firm friends over a long period of time over which Dick’s history became known to me. He had given a great deal for his country, and now due to that service this is his medical condition. He is numb from the pulverizing! It would take something as large as the Dead Sea scrolls to write it all down, but here it is in brief.

Dick has no ankle joint to speak of left to him after surgery, there’s nothing really there; two bulged discs impinge on his main nerve running along his spine, which is fused at the bottom, so he finds turning an agony. That, when taken together with his diabetes, together make a lethal, miserable one two punch! By the end of the day he can’t see straight and is totally wrung out because the energy it takes for him to fight the pain is man killing!

So how do you suppose this man spends his time? Dick crawls out of his bed each day to look after his son who suffers from his own lifelong ailment.

That clearly was not enough so Dick also set up a new business to develop and market an amazing new technology to help his country and allies fight their enemies. This takes the form of a wrist worn computer and display that can receive and send real time information in a battle environment. It can do this under water, on the ground, in extreme heat and cold. It will save many allied lives currently lost in ambush and a range of other situations.

Dick has developed this amazing, world leading technology with a tiny team of people on a limited budget against huge odds. In direct competition in live test conditions his equipment has surpassed every last piece of competition and is now almost ready.

This article is my small testament to an exceptional man; whether or not he triumphs over all the odds I think Dick is a great advertisement for America and for the sheer gritty staying power of the human spirit.

Justice

Lately there have been some extraordinary decisions in the English justice system. Amongst the most absurd was the finding of the Maidstone Crown Court, which this week decided that some ecological activists had not broken the law when they had intentionally shut down the Kingsworth power station during their protest.

Apparently, so the argument went during the trial, if the supposed greater evil being stopped is bad enough, then it is within the law to break the law and stop the perfectly legal generation of power.

The “evil” of the power station is that places like it are supposedly going to destroy our planet, and therefore it is to the greater good to put a stop to it.

In other words, it doesn’t matter if you act illegally to stop something that the politically correct consider bad or evil, because even when you’re caught breaking the law you will be let off by the justice system. This can only lead down a very slippery slope in which there will be no law.

We cannot allow passing fads, fashionable thinking or transient convenience to overcome common sense or the law.

IslamicVictims

In the last week the trial was concluded of a group of Islamic men, born in the UK, who were accused of plotting to blow up a large number of trans Atlantic jets. Three of the defendants were found guilty of lesser charges, and one man was acquitted. It is mooted that the Director of Public Prosecution will soon announce that the rest of the men charged are to be re-tried after the jury were unable to reach a decision about them.

This is despite the fact that these men had made individual suicide videos for release after their ultimately unsuccessful suicide attacks. The ingredients of the explosive devices were also found, as were details of the targeted aircraft. In addition to this these men had also been trained to carry out such missions in Pakistan. What did the jury want, an engraved invitation to mass murder?

Who can care whatever warped motivation such maniacs claim when their aim was to massacre thousands of men, women and children of every race, color and creed in an act designed to horrify on an even greater scale than the jets crashing into the Twin Towers.

I am not a lawyer, nor an expert on this case, but there is something very wrong when hugely well-prepared cases such as this one are not able to obtain the serious convictions the evidence appears to justify. We hope that someone very high in the English justice system is investigating how this jury deliberated, and what was its composition. There are grave misgivings being voiced by many people when such questionable decisions are reached without explanation. Is this another case of misguided political correctness gone mad, this time in the jury room?

At the same time, and unconnected in almost every way, across London, there are four of the most senior Islamic officers in the Metropolitan Police Force at various stages of claims against that organization for racial bias against them. All of these complaints single out for special condemnation the Metropolitan Police Commissioner, Sir Ian Blair. Normally I am at the forefront of those condemning this silly and super PC man, but surely not for his racism. He genuflects to the false gods of PC’ness and exposes his posterior whilst he grovels on the floor. How could anyone be less racist than this man? In fact, under his leadership it is much harder to get into the police force and gain promotion if you are white and English than if you are from a minority.

How wonderfully ironic that Ian Blair should be hoist on his own ample petard in this instance, and how stupid. The four officers concerned are professional chance takers, who it appears might well just be seeking to get rich quick by making silly and unsubstantiated claims for racial discrimination in order that they might gain financially.

To add to this ghastly parody of racial prejudice, it is now reported that the lawyer acting for these officers is himself a person with a more than questionable past. Are we all shocked, I don’t think any of us can be. We inhabit an Orwellian world in which everything is distorted and warped by falsehood and greedy inadequate people who care nothing about loyalty, integrity or society.

What makes it worse in both these stories is that most of the people concerned are Asians of the Muslim faith and were born or were raised in the UK. They have taken everything this country has had to offer and in return abuse us and seek to harm or gain from us. They are despicable human beings, not because they are Muslim, but because they are human garbage that deserves nothing but our contempt. In this society that has embraced a victim culture it has become hard for some to remember that the real victims are the people who actually suffer, and not the people who are able to complain the loudest.

TheWorkaholic

My name is Tony and I am a workaholic. There you go, the first step is the big one, the admission that there is something wrong with me. Now I’ve gone that far I guess I should explain myself.

A couple of days back I made the declaration that I was not going to post a blog until the middle of the week and all would be explained at that time. This is now the time to take that next step.

I consider myself a person of moderation in most things, except for some strongly held opinions which you have had the misfortune or otherwise to share with me in this column. I noticed that not everyone works like me, and thought that entirely natural, after all each of is built differently. In fact I think I’m lazy, and never doing enough to justify any kind of hard working description.

My grandfather Gershon worked hard, “like a donkey” my father used to say of his father. Sometimes 18 to 20 hours a day, every day for years too numerous to bear, almost dancing up and down the hard floor of his little room as a tailor’s presser in Soho’s D’arblay Street he strived to look after his family for year after year of unrelenting effort. I remember watching him as a young boy as he worked himself into his early grave. Despite his almost superhuman East European strength eventually the never-ending work took its toll on this pocket dynamo.

That was hard work, but it was my late father, Michael, who really worked hard. I never saw anyone start earlier or work later than him, and although he worked with his brain and not his brawn it was no less hard. Of course they also had something else in common, these two wonderful men who were so different in many ways; they both died too early.

So when my wife, kids, friends and even strangers started to tell me I was working too hard I, being the son of my father, at first took no notice. To me writing a book or a blog or working on a film script is pleasure, not pain. It just doesn’t seem like work. A phone call about a deal is like a stroll in the park, and doing a bit of research on the net or handling my e-mails is mostly fun and a pleasure. I’m happy working on my laptop during the evening. I am keen to be in contact on my BlackBerry most of the time.

Then it dawned on my, I have become a workaholic, I never stop working, or thinking about work, or writing, or doing deals. This became obvious to me when I intentionally cut back on my workload and felt withdrawal symptoms that were almost physical.

As a result I decided to see if I could turn off all my machinery before and after office hours and to intentionally not post these columns for a couple of days.

The world didn’t come to an end, it still revolves, and apart from a few kind souls worrying if I was OK because they had come to anticipate my columns every day, everyone and everything survived.

This has taught me to attempt the previously impossible, to try and do a little less working and a little more living. I trust you will all agree that this is the right way for a now admitted workaholic to go.

I suspect that I am not alone as a workaholic; I think that there are people reading this column who could learn from some of my mistakes and who would benefit from a spot of rest and recreation. Spoil yourselves; you’re only on this planet a very brief time.