Friday, October 31, 2008
London Underground has not distinguished itself this week. Every day there has been some disruption to my normally uneventful journey from beautiful Ruislip to London's glittering South Bank. Faulty trains at Amersham, signal failures at Ruislip, Finchley Road, Neasden, fire alerts at Lambeth and Baker Street - it's been a long and dismal litany. Earlier in the week I had to take the Piccadilly (adding 15 minutes to the journey) because the Met was suspended south of Wembley Park. Yesterday morning they tried to stop people going down the stairs from the Met platforms at Baker Street because of overcrowding caused by delays on the Jubilee. Last night our northbound Bakerloo stopped at Piccadilly Circus because of a "situation" at Paddington. I have no idea what the train driver meant by this. Then just before we left Oxford Street we were told that Baker Street was closed and I had to scramble to get out of a crowded train before the doors closed, because getting out at Regents Park, or being taken on to Marylebone would leave me stranded in no-mans-land. I chose to avoid Baker Street altogether and came home via the Central Line, a fall back that works but adds at least 20 minutes to the journey time.
All this, a dusting of snow on Tuesday morning and the leaves have yet to drop.
Meanwhile in other news the massive redevelopment of the White City site, building works that seem to have been going on for decades, is complete and London has another huge shopping mall. Oh bliss. I read that 80% of the shops there are fashion outlets. Oh double bliss. Still if it keeps the young people off the streets. I suppose it fulfils some sort of purpose. But what awesome timing, as consumer spending falls for the first time in many years.
Wednesday, October 29, 2008
Enjoyment taken from the misfortunes of others. What a beautiful word is Schadenfreude. Typically Germanic with its combination of two roots, schaden meaning damage and freude meaning joy, both derived from Middle High German (thanks to Wikipedia for this). And how appropriate on this morning to learn that hedge funds (legitimate criminals gambling on the misfortunes of others) have made huge losses short selling shares in VW only to be outflanked by Porsche's huge stake as the luxury car maker seeks to take over Germany's mass producer.
If I had the power I would make any dealings in shares unenforceable at law unless the seller owned the shares and had done so for at least a month, and the buyer would be required to pay cash then and there. This would end the stupid speculation that pushes prices wildly up and down because people are gambling on the outcome. Investment should mean what it ought to mean - medium to to long term financial backing in an enterprise, providing capital for new or growing businesses and a market for existing securities so that existing investors can realise their assets when they need to. Let the speculators go down the dog tracks and lose their shirts if they want to, but not at the expense of destabilising the markets on which the prosperity of most of the world hinges.
My usual Metropolitan train did not arrive this morning at Ruislip Manor. Nor did the next one. When a Piccadilly came in sight, I knew I had time to go back down the steps to the ticket office and ask what was going on. No point in watching the electronic information board on the platform - it displays no useful information. No point in pressing the "information" button on the "help" console on the platform - invariably there is a recorded message saying the operator is busy.
The man in the ticket office was not too happy about being disturbed and I found it hard to hear him through the thick glass screen but eventually we established that a Met was due. He gave me no explanation. I went back up the steps where a train was indeed incoming. The public address system provided no enlightenment. Nor did the driver of the packed train, nor any other station announcer. At Harrow a train stood alongside on the fast platform, looking suspiciously empty and people on my train hesitated to take it until eventually a grudging announcer told us to stay put. But not why. We continued on our way, with the empty train moving in step until it was taken out of service at Wembley Park.
Arriving at my destination, Waterloo, I discovered that apparently the Met had delays on the Amersham branch.
I don't see why any problem out at Amersham can affect services from Watford or Uxbridge, but if it does, is it so hard to tell the passengers?
Thursday, October 16, 2008
We are living through a financial crisis reminiscent of the crash of 1929. Then, as now, a long rally on the stock market ended with a sudden collapse of prices. There were days when it seemed that the plunge in prices was over but always the market resumed with further falls, on and on until reaching the low point during the mid 1930s. By that time a full blown slump with mass unemployment had set in.
I have been trying analyse why the huge fluctuations on the markets cause me such uneasy feelings, and put this in the context of working and travelling to work normally. The falls in the markets will probably hit me a lot in terms of reducing the value of pensions, yet it may be some years before I do retire and things could have recovered by then. The huge uncertainties in the mortgage and banking markets don't really affect me at all. But if we do move into a real slump then my complacent idea about working as usual may be destroyed. I think this is the most worrying aspect - once people start talking about "belt-tightening" and companies begin cutting investment then the level of economic activity will fall and a spiral of increasing unemployment and reducing spending may set in.
I studied all this many years ago during my economics degree. Clearly world governments have learned lessons from the 1930s and by propping up banks and maintaining credit, have taken essential steps to preventing the drift into slump. Other steps remain, notably cutting interest rates and perhaps "public works" - efforts to keep expenditure going so as to stop the deflationary spiral.
Keynes wrote about the "animal spirits" of investors, meaning the gut feelings that underlie the decisions to invest. Those spirits must be pretty low right now. They must not been permitted to fall further. In the end a slump can be avoided if people believe in the economic future. Some of this is generated by positive leadership. Most must be based on evidence that things will indeed improve. I guess that the lack of this evidence is one of the big things that is worrying me.
Future historians may care to note that there is really no sense of all this on the daily commute into London. Nobody is begging on the tubes or even in the streets by the stations. There are no fire-sales. The ragged men with trays of matches slung round their neck, so beloved of cartoonists like Bill Tidy and Larry, are biding their time. One straw in the wind is that the volume of junk mail for credit cards and loans has dried up, as has the advertising for such products.
No pithy conclusion to today's piece. The ponderings will continue.
Tuesday, October 14, 2008
Keir Hardie, Nye Bevan, Clem Attlee - what would you give to be living now in the era when much of the banking system in the UK is nationalised? The speed and depth of the international financial crisis has been astonishing and the response of the Government - and others round the world - equally amazing and unprecedented. In the 1930s they wrung their hands and did nothing, except for vain attempts to devalue currencies and to cut expenditure, which made matters worse. Today they seem to have absorbed some of the elementary stuff I learned in my days as an economics student, and realised that confidence is the essence of successful capitalism.
And in a way I feel strangely vindicated. During the late 1970s I wrote an article in an accountancy magazine criticising a fellow writer who argued that the Bank of England should be independent and how awful and ghastly was any hint of state control. I said that in the end the key questions of financial policy must be made by responsible governments not by faceless officials. When Gordon Brown made the Bank independent in 1997 my adversary must have been well pleased. Now I hope he is choking on his humble pie. When it really mattered, and though the Bank was keen to keep interest rates up, political pressure forced a cut. At a stroke the heart of British banking has been regulated. Furthermore the coordinated action round the world shows the meaninglessness behind the idea that central banks can act independently.
With any luck the lesson will be extended to the ghastly public-private finance arrangements forced on the Tube by, yes, that man again, Gordon Brown. Can we have another about face please?