St Albans, twinned with Aberystwyth (and Detroit)

The pleasant Welsh university town of Aberystwyth is ending a disastrous year-long experiment. In their wisdom, the town elders decided last year to fire all the traffic wardens, believing that decency and common sense would cause the citizenry to park responsibly and safely even without the threat of a ticket.  Bad call! With the wardens off the streets, the locals all turned into John Terry, parking wherever they liked and turning the town into a chaotic hell-hole. Now the wardens are coming back, to the relief of all concerned.

Here in equally pleasant St Albans, we could have saved them the trouble. A number of years ago, our parking wardens staged a long strike.  With the regulations unenforced, the result was mayhem, and there was great rejoicing (maybe I'm overstating the case a bit) when the tubby guys in blue were back on the prowl.

Not that the return of the wardens has put an end to all parking grievances in our fair city.  The big issue: people don't want to have to pay for the privilege of stashing a ton of metal by the side of the road.  Parking for free seems to be some kind of human right, which the local council messes with at its extreme peril.  One gent from a nearby village wrote indignantly to the local paper last month that the twice-weekly St Albans market was no longer on his must-do list, thanks to the parking charges.  The opportunity to take part in something that has been a tradition in the city for more than a thousand years, and to support local farmers and businessmen, is as naught compared to the outrageous imposition of having to pay a pound to park his precious steed.

Elsewhere in town, there is outrage at the local council's attempts to stop visitors to the ruins of Roman Verulamium and the (unruined) Abbey from parking on the grass verges in order to avoid parking charges.  One local councillor warned that the City could not afford to be seen as unfriendly to visitors, though it's not clear why we want to be friends with the kind of people who won't pay for parking:  those cheapskates probably bring their own sandwiches too.

It's not just in parking that St Albans leads the way.  Recently the once-great city of Detroit announced that it would be dousing a lot of its streetlights to save money.    Hey, Motown, get with the program!  Here in St A, the local council started doing that some time ago, and very well it's gone too.  The sensors initially installed on the lights -- all 40,000 of them across the county -- were faulty, and had to be replaced, and there were stories from all over the area of lights turning off mid-evening, and not at midnight as they were supposed to.   However, Detroit may avoid that fate, as it's going down a cheaper route -- almost half of the city's streetlights have failed anyway, and they're simply not being replaced.   Let's hope St Albans council doesn't get wind of that.    

Save the Euro, or the house gets it!

Remarkable headline of the day:  "Euro breakup could wipe 50% off London house prices".   The story is not in the Daily Mail, the usual home of obsessive house price paranoia; it's in the normally more level-headed Daily Telegraph.  The dire prognostication is based on a report by a research company that suggests the foreign buying of high-end London homes that has driven prices to dizzy heights in recent years may become the market's worst enemy in the event that the Euro breaks up.

The report's authors believe that the initial impact of a Eurozone collapse would be to push prices even higher.  However, they argue that once the bad news was absorbed, the incentive for the world's rich to seek a safe haven in London property would evaporate. Once that money began to leave, the top end of the London housing market would sink very quickly.*

In principle this is plausible -- "buy the rumour, sell the fact" is a well-established market axiom.  However, if the Eurozone really did fall apart, the dire consequences would be likely to last for some considerable time, giving London property continuing support.  It hardly seems likely that Russian and Middle Eastern billionaires would be rushing to buy homes in Paris or Madrid if the region was still in turmoil.

The really interesting thing, however, is how the Daily Mail parses this story for its readers.  They love ever-rising house prices, and they love to hate the Euro.  The idea that the hated Euro's survival could be a pre-requisite for more house price gains must be just too awful to contemplate.  

* This is not the thesis I expected to find when I started reading the article.  I assumed that the argument would be that problems in the European banking system would drive up banks' funding costs and force up mortgage rates, sending prices into reverse.  This still seems to me to be a likely scenario, but the researchers here were looking at the class of buyers that doesn't need mortgages.    

Our once and future King (in his dreams)

Such a pleasure to see the Great Dissimulator, Tony Blair, back on our TV screens yesterday.  Phoney Tony magnanimously took time out from his multitude of day jobs (among them, bringing peace to the Middle East and advising the senior management of JPMorgan;  anyone have any  updates on how those are going?) to appear before the long-running Leveson Inquiry into phone hacking.  A bit greyer,  and sporting a tasteful tan that he probably didn't lay down in Bognor Regis,  he seemed otherwise to be little changed:  still managing to appear self-assured and slightly unhinged at the same time.

There's a fascinating summary of the media coverage of Blair's testimony (and even more about his appearance and his mien) here, but it's worth taking a more detailed look at some of the things he actually said. Here's his explanation for why he decided to try to "manage" the relationship with the media (i.e. the Murdoch empire):

“The truth is that I felt that if I had taken on this issue, I would have been engaged in a titanic battle with immensely powerful media interests who would not have hesitated to go after me and my Government with everything at their disposal. It would have, to a large degree, dominated the agenda of the Government.” 

That's pretty much a textbook definition of leadership, isn't it?  Getting your capitulation in first.   But at least he was doing it in the best interests of the country:

“Our priority had to be around the economy, schools, health, crime, security and foreign policy.” 

Too bad, then, that those aren't the things the Blair years are likely to be remembered for, at least not in a good way.  But never fear, it all turned out well in the end:

“I know Rupert Murdoch and his family far better today than I did when I was Prime Minister. I would never have become godfather to their child on the basis of my relationship in Government.”  

Or, in the words of an old Irish ditty, "your reward you've won/for a job well done".  

In recent weeks Blair has let it be known that he's interested in making a return to the UK political scene.  Surely the only job he thinks suited to his exalted profile -- the one where you get to live in the big white palace at the end of The Mall -- is already spoken for, far into the future?  But who knows?  This being Blair, he may have put together some sort of deal with Prince William to squeeze the heir-apparent to one side.  Which, come to think of it, might go down quite well with the voters. 

Taking the pizza

Is there any food that's been more thoroughly traduced than the humble pizza?  The giant gloopy messes now sold as pizzas around the world bear about as much resemblance to the simple Italian original as I do to George Clooney.

And amazingly, people keep coming up with new abominations.  You'd think it would be difficult to do much worse than the list of toppings available at just about every takeout pizzeria in the UK.  Pineapple! Sweetcorn!! Tandoori chicken!!! But you'd be wrong.  On our recent visit to Warsaw we ate at one place, otherwise quite decent and restrained,  that set a new benchmark for bad taste with a pizza topped with....banana!

That benchmark lasted less than a week. In among the mail on the doormat when we got home was a flyer from Pizza Hut, bragging about their latest gourmet innovation.  If the cheese-stuffed crust didn't quite do it for you, they were now offering a pizza with a crust stuffed with hot dogs (and just a soupcon of cheese sauce).

The flyer warned that this foodstuff of mass destruction would be available "for a limited time only",  the limit  presumably determined by how long it took for all of the customers to suffer massive coronaries.  Mi dispiace!    

Face value

The legal wrangling over Facebook's initial public offering (IPO) -- or rather,  over the abysmal performance of the stock since the flotation took place -- promises to provide hours of enjoyment for the neutral spectator in the weeks and months ahead.  There are suggestions that the lead underwriter, Morgan Stanley, may not have told smaller investors that its analyst had downgraded his earnings estimates for the company after the flotation was announced.  Even if that isn't the case -- and Morgan Stanley has been prompt and firm in denying it -- there will certainly be questions asked about whether the underwriters (and Facebook itself) got carried away by the pre-market hype, resulting in an offering that was too large and too expensive for the market to absorb.  

I was never on the equity side of the securities business -- too much flim-flam for my taste -- but one thing I did understand was that when entrepreneurs undertake initial public offerings (IPOs), they're not doing it to make new  investors rich.  They're doing it either to raise new capital to invest in the business, or to enrich  the investors who've financed the company up to the moment of the IPO.  No company wants to see its shiny new stock sinking like a stone, of course, but the alternative is almost worse, at least from the viewpoint of the initial investors (i.e., in the case of Facebook, Mark Zuckerberg and his partners).  If the stock goes up like a rocket as soon as it hits the market, you've left a whole lot of money on the table -- not a good feeling.

It may be that Morgan Stanley failed to control the hype, but it would be wrong to suggest that they created it.  The business media, with CNBC maybe the worst culprits, were drooling with anticipation for weeks.  Assuming all this comes to court, it will be interesting to see whether the ancient principle of caveat emptor wins out,  which it certainly seems to me that it should: nobody twisted anybody's arm to make them buy this stuff.  Then again, I didn't buy any of the stock, so I can afford to say that.

There's one other unusual aspect to this flotation: the movie "The Social Network".  It's a fictionalised version of events, of course, but most viewers would surely have had the slightly queasy sensation that I had, as I found myself sympathising with the unlovely Winklevoss twins.  Anyone who saw that movie and still thought the Facebook IPO would be a bargain really needs to give their head a shake.

The needy and the greedy

Defying mounting criticism from almost all sides, David Cameron has made it clear again in the last few days that fiscal austerity still overrides all other goals in his mind.   The Treasury has asked spending ministries to identify possible targets for a further round of spending cuts in order to keep the deficit reduction programme on track.  

Inevitably, the axe will fall heavily on social programmes -- unemployment benefits, welfare, pensions and the like.  That's partly because those programmes account for such a large proportion of government spending, but it's also because Tories instinctively feel that a large proportion of spending on such things is wasted.  But where are the cuts likely to fall?  Despite the fiasco over the so-called "Granny Tax" in the recent budget, the pampered elderly (including yours truly) are likely to be largely exempt, mainly because we turn up at the polling stations in awkwardly large numbers at election time.  So I, along with such impoverished souls as Sir Richard Branson,  Sir Mick Jagger and Dame Helen Mirren, will continue to enjoy free bus travel, free prescription meds and the ludicrous "winter fuel allowance",  without any attempt being made to check whether we actually need the money.    

This morning on BBC Radio 5 Live,  a call-in show offered a reminder of just how pervasive the sense of entitlement is.  The subject du jour was a new think-tank report calling for more affordable child care.  One of the callers was a gent who felt he wasn't getting nearly enough public help (read: money) to look after his three kids.  It emerged that both he and his wife are top rate taxpayers, which implies that the family is comfortably in the top 10% of UK households in terms of income.  The host, Victoria Derbyshire,  who has kids of her own, and may also be a top-rate taxpayer, asked him "Why do you think you deserve more help?"  To this he replied, "Well, I'm doing a lot for my children", prompting Victoria Derbyshire to blurt out "You're supposed to do that, you're their Dad!".  You'd hope she spoke on behalf of a lot of the audience there, but to be honest,  you wouldn't be sure of it.

So it goes.  The elderly are largely untouchable, and the aggrieved middle classes are quick to take to the airwaves to demand more for themselves.  That leaves the poor and disadvantaged to bear the brunt of the cuts, which is how we find ourselves with a newspaper story of the London borough of Newham, home of the Olympics, looking to ship its social housing tenants to Stoke-on-Trent because it can't afford to house them, side-by-side with a story that private landlords in the same borough are evicting long-standing tenants with a view to charging Olympics visitors up to £10,000 a week for accommodation during the Games.                

Irresponsibility

John Maynard Keynes famously batted away questions about the long term outlook by noting that "In the long run, we are all dead".  Now Robert Chote,  head of the OBR*, the UK Government's rather pointless "independent" forecasting agency, has concocted a variant, on the lines of "in the really long run, we're all up the creek".


According to Chote,  the impact on the UK of a messy collapse of the Euro could be not just long term, but permanent: 


“If you have a permanent impact on the productive potential of the economy, then it will have a permanent impact on the ability to raise tax revenue and a permanent impact on public finances,” he told the Daily Telegraph. (Full story here). 


Oh, please.  Over the past century, the UK has endured two world wars with shocking loss of life (and mass destruction of productive capacity and infrastructure in WW2); the Great Depression; loss of the Empire; and Sterling's demise as a global medium of exchange.  And yet, living standards have risen sharply (if not steadily), and reached their highest level ever just before the financial crisis hit in 2008.  Is Robert Chote really suggesting that recovery from a Euro collapse will not just take longer than recovery from all of those shattering events, but may in fact NEVER happen? Because that's what "permanent" means.  It's a ridiculous assertion, and one that someone in Mr Chote's position should have known better than to make.   


 * Office for Budget Responsibility