They Lost Their Chips, But We’re Paying

Last week’s news from the US that the US Government with it’s Neo-Conservative and Christain Right bias had managed to squeeze the prohibition of US banks and credit card companies from being involved in online gambling transactions caused me some severe angst, being an armchair economist with one eye on my own future it does that to me! Within forty-eight hours something like three billion pounds had been wiped off the share value of the likes of 888.com and Party Gaming. That’s real money people, your pension fund is likely to be smarting as a consequence. It’s also no good thinking that this can be recovered by pound cost averaging, whereby the fund managers buy back even more of the (now) cheaper shares expecting them to recover - the net result being an improvement over the original position. Because these shares are unlikely to grow in value for the forseeable future. The online gaming companies were making big bucks out of the US punters and their raison d’etre was to be based here and service gambling over there.

What has made me angry is the ambivalence of the fund managers post-legislation. Yet again these over paid and over here city fund and investment managers have made a duff choice at our expense. There have been few if any apologies and nobody has lost their job that I’ve heard of. When, I ask, will these people not be collecting record bonuses – the same record bonuses that drive up the prices of homes in London that we therefore cannot afford – the effect of which has spread as far as these parts I can assure you. The signs were there for all to see, company directors locked out of bonuses that became available to them just days before the debate in the House of Representatives. Directors of these companies were also entitled to bonuses once they had floated these companies on the London Stock Exchange, their net worth making them immediate entrants to the FTSE 100 and therefore an immediate investment in which certain pension funds are obliged to invest.

Basically the balloon should have gone up long before our money was lost. Highly paid analysts who earn in a year what we earn in ten or more simply missed this. The Government also allowed these shakily founded companies to be admitted to the Stock exchange despite the threat of a significant income stream being wiped out at any time. Party Gaming even flagged this up in their flotation prospectus.

£3.3 Billion is also about what was estimated we lost as a nation on Black Wednesday in 1992, when we were forced to withdraw from the European Exchange Rate Mechanism. Allegedly Chancellor Norman Lamont sang in the bath… Seems nobody in the financial services sector is particularly bothered nowadays either. It’s always easy come easy go in the square mile.

You can find out about all this stuff here

Trust me, I am a car dealer..

In a rare early evening moment I tuned into this programme yesterday, BBC2’s Trust Me I Am An Economist hosted by Tim Harford who also writes for the Financial Times. The upshot of this programme was how we react to insurance and how institutions are geared up to extract large amounts of cash from us based upon our fear of the future. The unsurprising fact was that highly paid experts on financial matters actually have no more idea as to what will happen in the future than you or I. From memory about 86000 decisions made by 300 of them were analysed to prove the point. At the other end of the scale I know a few people who have done pretty well from the house price boom of the last fifteen years, who would never have put any effort at all into the buying decision – they just bought the right place at the right time.

Read the article to ensure you’re not over-insured on the little things in life and if you really want to protect the future, start a fairy innocuous savings plan with a regular affordable amount.

The truism that you can never join a queue that will be quicker than the one you are already in also brought home to me something about my own business, but if I let on what that was the competition would jump aboard too! Only a regular reader might spot the difference in the business in a few months time. Of course, now I am behaving like I believe I am an expert, when it’s been proved that luck and not judgement seems to be the key. The Lee Trevino quote now springs to mind…”The more I practice, the luckier I get”

From 21 to 65

In an era when newspaper articles generally put a negative spin on the younger generation I was reassuring to sell a car this week to a twenty-one yer old, full time employed chef who had saved for a couple of years at least for his new car (and probably a further year for the insurance!). I should have asked what his original goal was as this car wasn't produced when he started saving. Not only was he focused enough to see this task through, in conversation he explained that he had also had to give up his hobby of motor cycle trials riding as it clashed with his working hours. Now he has the car I got the impression that a house was next on the agenda. That industry obviously throws up some very hard working and motivated individuals – I've met one who could be snapping at the heels of Gordon Ramsay in the next few years.

At the other end of the (current) working age scale, I read today that General Sir Mike Jackson, Chief of the General Staff and head of the armed forces in the UK is soon to retire. In the article he was explaining how our contribution to the training of new Iraqi army officers was creating about 750 new young leaders a year and generally painted a far brighter picture for the future and security of that country than we usually see. A fact confirmed by a journalist friend who visited the South of Iraq a few weeks ago. To me he has an air of integrity missing from many of our politicians and it's a shame that someone of his calibre hasn't got another few years in the role to influence the situation.

Genius?

Isn’t mowing the lawn therapeutic. Having found that much of the afternoon had passed me by while I updated my website and caught up with some admin, I decided to cut the grass, to complement the great work Mrs C had been doing during the afternoon. With nothing else to think about for a few minutes I pondered England’s chances at this year’s World Cup in Germany, or rather what chance now that our star talent Wayne Rooney has been struck by England’s nemesis the broken metatarsal.

Without going off on a tangent, something I am second to none at, it turns out that this recent flurry of broken feet, something that seems to be fairly unique to English football? is all to do with the nil protection afforded to footballer’s feet from the super thin leather upper of a modern day tech-football boot. It’s no accident that the likes of Beckham, Owen and Rooney are so deft with their feet nowadays. Pele would have killed to have the control afforded by kicking the ball with virtually the surface of your instep and not have a thick lump of leather spoil the pinpoint transference of energy from foot to ball and hopefully goal. Of course the downside is that if you have the likes of Paolo Ferreira  bearing down on you and they (happen) to tread on your foot, you’re for want of a better expression, up the creek without a paddle. Stud to metatarsal equals the entire football following part of a nation’s heart sinking. 

So, back to chances. To win these games you need ‘World Class’ players. These people if there was one, we assume would play for the World Eleven against aliens or extraterrestrials who would field an equally impressive team of defenders, midfield and strikers. World Class players make the difference between a good team and an excellent team. Even International teams only often field one World Class player. Once you have been elevated in a commentator’s opinion to World Class, you may make it to the Grand Master of descriptions ‘Genius’. I’m not even sure Beckham has been described as genius. Well, he might have been, when as a teenager he scored that cheeky goal from the halfway line, of single-handedly beat (Greece?) to ensure our qualification to the last World Cup – thereafter breaking his metatarsal and causing The Sun to distribute prayer mats with its six million copies. No, genius is reserved to the likes of Pele, Cruff, Maradonna (flawed) Best (flawed) there’s a trend here, and Rooney.

As someone who would classify even an average surgeon as a genius, the phrase is a little over-used nowadays, but even I have found myself defending the term against Mrs C’s rant that “How on earth a footballer could be called a genius is beyond me?” Which then often segues into my mother’s catchphrase “Ask them to get the washing in, or put the rubbish out” (add any chore to this), or “Could they perform open heart surgery?” Of course they couldn’t. But ask them to take control of a game where another twenty one people are also participating, odds-on when the going gets tough, they will get going e.g. Steven Gerrard in the second half of last year’s Champions League Final.

Our chances in this year’s finals. Pretty slim. Unless of course we adopt the tactics of one Mr Sam Allardyce, Bolton FC manager and England Football Manager candidate who I quote “If we can’t play them off the field, we get in their faces.” Arsene Wenger hates that”. He hasn’t got the job. But if his tactics were to beat Brazil three nil in a World Cup Final he’s be a genius too!

P.S I am not prepared to discuss the phrase 'Top, top drawer.'