Mike Vickers' Blog

October 30, 2016

The Big Bang 30 years ago: The unintended consequences of deregulation and its role on broken Capitalism

Filed under: Corporates, economics, Politics — derryvickers @ 10:38 pm

A Seminar  at the David Hume Institute on 27 October 2016
Given by Philip Auger and support from Hamish Buchan and Sir Tim Nobel with Owen Kelly in the Chair.

Some of the points that Philip Auger made that got to me were:

  1. The Labour Government of 1974-5 saw the Stock Exchange as a closed shop but it remained until 1983 – 86 Tory Government to do much about it and on 27th October 1986 they kick off the Big Bang
  2. The trading floor disappeared along with Jobbers and Brokers and their tasks were largely replaced by on-line technology. And with them a network of trust and confidentiality. TN later illustrated this when a large Organisation indicated a desire to sell its shares but before they had a chance to do so the market was forewarned and the share price had already fallen.
  3. During the next ten years UK indigenous firms failed and were quickly swallowed up by big US Firms who moved in and brought in the US ways of doing business.
  4. The City flourished and during the Blair years the City could do no wrong.
    1. The City’s advantages were: The Greenwich Time Zone, the UK Legal System and the UK speaks English.
  5. But what suffered during these years was the fact that the Stock Exchange was no longer small, there had been trust and shares were for life and as stated above dealings were confidential. The Stock Exchange had been a ‘cottage industry – now no more.   Technology allowed share trading to become transactional – the personal touch just disappeared.
  6. A major consequence was that trading became just for profit and the more trading the better the profit. The Stock Exchange became a ‘casino’ with the Devil take the hindmost. Greed set in
  7. And Greed spread to the Companies whose shares were traded: not just the CEOs but Greed permeated downwards.
  8. And as the South East is permeated by the Finance Business so Greed has spread to all. PA considered the same is true in Edinburgh. A couple of speakers mentioned John Kay’s book ‘Other People’s Money’.
  9. The Finance industry has grown to such an extent that there is now more Sales Men than Clients!
  10. To Questions the Panel answered
    1. PA believes the City will get a special deal on passporting following UK leaving the EU
    2. But Finance will inevitably move towards Europe – it has already started to happen.
    3. Edinburgh is already getting smaller with the loss of two major banks
    4. Nevertheless PA considered that the City will carve out a new role for itself; but it is essential that there is no race to the bottom
    5. PA had worked with David Davis and he believed the Davis would be a shrewd negotiator for the UK; he was also sympathetic towards Theresa May.
    6. Have the Banks learned anything from the Crash? Well not much. Some form of bonus mechanism is essential in a Capitalist World but this should be based on Customer Satisfaction rather than forced selling at the counter. The key will be ‘The Reputation of the House’.
    7. PA considered that Banks must get back to service and living with modest profits between 5 – 8%.
    8. HB related to the Stewart Ivory scheme for providing education on Finance to sixth forms but this can only go so far as it is not yet an examinable subject and the scheme can only provide 100 mins per school.
    9. As to the Stock Exchange – its role as an all embracing centre for trading is declining; large business can trade amongst themselves; but TM considered that medium sized start-ups do need a source of capital and the Exchange can provide the mechanism. The Stock Exchange also provides an index of market value.
    10. PA wondered whether the merge between the London Stock Exchange and Deutsch Bank will still go ahead?
    11. More generally Companies should consider broadening their raison d’etre and be willing to expand their boards to include staff and customers and I would add union reps as Germany. The 2006 Companies Act goes some way but he expects a Green Paper soon. But he noted that the CBI is not in favour of expanding Board membership in this way.
  11. PA summed up as ‘the Big Bang led to ‘greed, growth and gambling’

It was a good evening but I came away without a clear understanding as to ‘Broken Capitalism’ and what is the future. Capitalism can’t just be broken because of ‘Greed’ and, as is oft repeated, Capitalism is much better than Communism.

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February 11, 2015

Bank Scandals breeding New Politics

Filed under: Corporates, Politics — derryvickers @ 4:08 pm

Strong language in yesterday’s Scotsman by Peter Jones

‘If Green did not know what it was doing, he is culpable. If he did not inquire, he is negligent. A chairman’s legal duty, certainly on behalf of shareholders but sadly not on behalf of honest customers it seems, is to make sure that the full-time executives are generating profits, but doing so legally and decently so there is no future retribution that could damage shareholdings.

I’m sick of this stuff. I’m sick of hearing about rich people avoiding and evading tax. I’m sick of rich companies paying next to no tax and bleating that they are doing nothing illegal. And I’m sick of hearing about powerful people presiding over these malpractices and swanning ever onwards and upwards to yet more power and riches.

It damages society because every pound of tax that these people don’t pay is a pound more that has to be extracted from you and me. Most of them have benefited from an education system and a health service, from roads and a justice system, from defence forces and a democracy, all of which has to be paid for by the taxpayer.

What miserable, warped, corrupt, mentality assures them they should be free of this tax burden that weighs down folk like you and me? If they won’t pay their due tax, why should we?

To read the lot go to

http://www.scotsman.com/news/peter-jones-bank-scandals-breeding-new-politics-1-3685020

It may ever have been thus, but By Gum its coming out now

February 6, 2015

Whatever happened to Politics of Hope – Patrick Harvie at the David Hume Institute

Filed under: Corporates, DHI SPIF, economics, Politics, Scotland — derryvickers @ 9:49 am

The third Lecture by Scottish Political Leaders

Harvie provided more of barn-stormer than a lecture; he was better and easier in discussion.

The points he concentrated on were:

  1. The people and organisations that were prospering before the Crash have been the ones that have continued to profit since – it’s the rest of us who haven’t.
  2. The Crash has allowed employers to renege on conditions in the work place.   Wages in real terms have deteriorated – workers must pay to seek retribution at industrial tribunals. What is required is bringing back democracy into the work place – Union rights (a la Germany)
  3. Oil is a bubble – it is grossly overvalued – it must stay in the ground rather than its exploration and extraction receiving tax breaks
  4. Energy creation should be distributed to the local authorities and to the communities themselves (I remembered the smell of the Local Gas Works I used to pass every day going to school as a child!)
  5. The Greek election is a beacon of hope in politics rather than of despair. A break from the cry of ’Business as Usual’ so dominant since the Crash
  6. The Referendum was a lost opportunity
  7. People now looking at life as a ‘Hotel’; you take the room, pay for the service and move on. There needs to be a real revival in the community – Eigg as a community
  8. But he confessed he has no answers to his points
  9. Harvie is for proportional representation
  10. Politicians should work together across parties. In this respect Westminster works a lot better than Holyrood. The Bedroom tax legislation would have been resolved in Scotland if the SNP and Labour hadn’t spent so much time in bitter dispute even though both agreed on the way forward
  11. He is against outsourcing government business to consultants who could gain from the advice they gave
  12. The differential between the highest and lowest in any company that was 20/30 is now 200/400 and has to come down to 10/20.

I agree with much of what Patrick Harvie said in his talk and in the following discussion. There is no doubt that there is a disconnect between politicians and the public, those with wealth continue to prosper, and a change of heart back to a more connected community environment is essential.

But I would need a lot of convincing that the Green Way would automatically deliver the Political Hope that Harvie hopes for.

Mike Vickers

January 31, 2015

The May Elections and The Break-Up of the UK

Filed under: Corporates, Ireland, Politics, Scottish Independence — derryvickers @ 2:06 pm

From Jonathan Freedland – today’s Guardian

http://www.theguardian.com/commentisfree/2015/jan/30/pre-election-jokeying-threatening-united-kingdom

‘It’s a dispiriting sight. While the big forces that threaten Britain stretch far beyond these shores – an ailing global economy, climate change, violent jihadism – the nations of these small islands are turning against, not towards, each other.’

 And

‘It’s loud, it’s nasty, and it needs to be handled with care – but it’s better we see it than have it fester underground. And it’s important we get it right. Otherwise we may not stay together at all.’

Well we didn’t all stay together – already Erie has broken away.

And what about the other big forces threatening Britain – the major corporations eg Shell (although Shell in my view is one of the more responsible ones)

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