Monday, July 26, 2010

Vince Cable is wrong and dangerous

A lot of people have gone from seeing Vince Cable as the messiah to seeing him as a charlatan that predicted 14 of the last 3 recessions. However, I think people see him as mostly harmless. This is wrong, he is a dangerous idiot who simply does not understand anything about finance or economics.

This latest piece of lunacy proves it.

To summarise what this madman believes:
1. Banks are not lending enough, or as he puts it, "acting in the national interest".
2. Banks must lend more.
3. In order for them to lend more, bonuses should be linked to lending levels.

Now, there is little doubt that one of the many reasons for the economic crisis we are in was utterly irresponsible lending by the banks. There were more egregious sins, mostly committed by the Government, but the banks got themselves into an awful hole by lending carelessly to people that could not pay it back. Much of this was also forced upon them by the Government, much like in the US.

As a direct result, banks are now being ordered to shore up their Tier 1 capital ratios, which has the knock-on effect of reducing the available pot for lending.

Yet Vince Cable wants banks to lend more, and to be paid according to how much money they pump into the system. This is the same Vince Cable that railed against bankers' bonuses - "I think the bonus culture which continues is unacceptable. The coalition agreement makes it very clear that unacceptable bonuses are continuing and that is something we want to try to stop and that reflects the lack of moral compass."

Can anyone see a wee contradiction here? Bankers' will lend to unsuitable people again, in order to boost their lending levels. This lending means they will get bigger bonuses. These loans will default, fucking up the banks' balance sheets and probably leading to more Government intervention, given the wobbly nature of these banks' finances anyway.

And which incompetent Lib Dem cretin will be the first to shout at the banks for paying bonuses for irresponsible lending? I wonder...

Tuesday, July 20, 2010

Fairtrade - The Problem

Yesterday, sweet-toothed trader Anthony Ward bought pretty much the entire European market in Cocoa beans, in the largest Cocoa trade for 14 years.

How boring, you may think. But there is a comment from a FairTrade representative at the end of the first article, which is I think sums up the problem inherent in the FairTrade concept. Here it is in full (emphasis mine).

Barbara Crowther, a spokesman at the Fairtrade Foundation, said that no farmers in West Africa would benefit from the higher prices. She said: "This speculation only serves to increase volatility and uncertainty. Part of the problems in rent years have been the lack of investment in improving cocoa farms. But the farmers have already been paid a set price – none of this money will filter down to them."

All that she says is true. However, in theory, the purchase of these cocoa beans should ultimately benefit these farmers. They wouldn't benefit this year of course, but next year they should be able to command a higher premium for their beans, or produce more, as evidently there is a mild supply shortage. This additional money would then provide the investment required.

The problem is, of course, the FairTrade intermediary will prevent any of this happening. Ironically, FairTrade has no real desire to help farmers invest and grow, as they have this romantic idea of subsistence farming that bears no relation to the reality of hours of back-breaking toil actually required.

Perhaps allowing a free market to set a fair price might allow these farmers to speak for themselves rather than being ripped off by an organisation answerable to no-one except themselves.

Tuesday, July 6, 2010

Employers in "Looking for 2:1 Degree" Shocker

So the BBC ran this little nugget this morning - it seems that "Three quarters of employers 'require 2:1 degree'".

My first thought was actually "what are the other employers looking for?", because frankly if you don't require a 2:1, then why ask for a degree at all? I got a 2:1, and it really is not that hard, I was incredibly lazy at uni, as were most of my peers. The ones that managed a first worked pretty hard, but everyone else just arsed about mainly.

Bear in mind as well that two-thirds of students get a 2:1 apparently, so employers are actually only ruling out 1 out of every 3 applicants, which is bugger-all really. Particularly since apparently 69 grads apply for each post on average, so that still leaves 46 applicants in the game.

Yet according to the Association of Graduate Recruiters, "While this approach does aid the sifting process it can rule out promising candidates with the right work skills unnecessarily". Well, evidently the right work skills do not include being able to work at all or indeed learn anything. This is the bottom third of a massive pool of people who did something (get a degree) that is for the most part very easy.

The BBC's spin is predictably entitled and leftist (emphasis mine) -
"so this means the remaining third, who will still have passed their exams and paid their tuition fees, will not even be considered by these employers."

So because someone wrote his name on some exam papers and handed over some cash, he should automatically be considered for a job. Otherwise it is unfair.

The unintended (if incredibly predictable) consequence of Labour's obsession with everyone going to university is a whole bunch of people with a worthless piece of paper no-one is interested in, who are worse off than if they had gone straight to work. They are also saddled with unrealistic expectations borne out of entitlement shown beautifully by the BBC above.

Hike tuition fees, slash the number of available places by 25%, and spend some of the savings making sure that bright poor kids can afford to pay these fees. It really isn't very complicated.

Friday, July 2, 2010

Friday Funny

Brilliant comment below this ridiculous story in the Daily Grail.

"So his bogus magic water was illegal because it wasn't really bogus magic water from Lourdes, as endorsed by a man in Rome wearing a frock?"