Wednesday, 28 July 2010

Forgemasters

I see a lot of political fuss about the cancellation, by the Government, of an £80 Million loan to a company called Forgemasters. The logic behind the loan, in the lead up to the last General Election, was that Forgemasters would use the money to invest in machinery and plant to forge parts for the nuclear power industry.

One thing has puzzled me about this whole affair. If the investment in machinery was such a good commercial idea, why can't Forgemasters obtain a commercial loan or issue bonds to obtain the necessary funds? If it was not a commercially sound idea, what was the motive of the previous Labour Government in proposing the loan facility? The unelected Business Secretary of the previous government seems to be quite vocal in protesting the cancellation of the loan he granted.

Why should the current government borrow money to give Forgemasters a loan?

Tuesday, 27 July 2010

London Forex $1.7 Trillion/day

A report in the Independent newspaper highlights the London based Forex market is running at the level of $1.7 Trillion per day. That is a massive amount of money. It is roughly equivalent to $250 per day for every single living person on this planet!

Once again it is unproductive speculation rather than physical trade/services activity. How pays for this wasteful churn of money? It is Joe Soap on the High Street who pays through the nose in high bills for food, goods, energy and services.

In my old moneybroking days the daily commission on that amount of turnover would have been around $6 Million a day allowing for fee discounts.

Saturday, 24 July 2010

Demon Internet Usage Cap

Demon Internet have decided to impose a usage cap on their unlimited business ADSL service. Our usage is only 1/20th of their cap, so it won't be any kind of problem to us. However it does raise a question in my mind about how serious Demon are in providing a real business service. Their price is already at a premium above an equivalent consumer service. Their customer service is outsourced to the the inevitable India and is quite ineffective. I work on the basis of 24 hours to fix problems in their service and have an alternative business ADSL route. One begins to wonder just what is their unique selling point?

A bad move Demon.

Thursday, 22 July 2010

High Frequency Trading

I've just been reading a blog comment on High Frequency Trading and the need for circuit breakers. The underlying problem is that HFT is not investment, it is at best gambling. There is no way that the underlying value of a company can change by a few percent in a few milliseconds.
Such speculative gambling extracts money from the investment value of companies. It serves no useful social purpose other than enrich a few people with access to the machinery of HFT. It is in effect a parasite living from the lifeblood of industry.
There is a simple solution, it is called a Return to Investment, where buying decisions are based on longer term business prospects. Governments should agree internationally that no stock/equity or derivative instrument can be re-traded within 32 days of its previous trading. This will return equality to the trading market and give people the opportunity to make considered decisions before deciding to buy/sell. It will also force them to take greater interest in the longer term development of the organisation represented by the financial instruments.
Charles

Monday, 19 July 2010

More BT crookery

I just received a letter from BT Customer Services (!) proudly telling me they are increasing their call charges by 10%. The minimum price for a call will now be 17.3 pence. Last year they imposed a similar 9% increase. Also press announcements.

Ah but wait, as always with BT the demon is in the detail: we have a BT line that we use only for incoming calls. Out going calls go over a mixture of BT lines and other Internet providers. BT will now fine us an additional £18 a year on that incoming line unless we make at least two outgoing calls a month on that line.

Guess what BT you can stuff the line rental on that incoming line, it is only there as a standby anyway. Take it away and we won't trouble you with our business any more! If you are mistakenly trying to impose your own private version of the Broadband tax let me assure you that you have got it wrong - we use an LLU service from another provider - not a BT line. It is just yet another example of unfair BT pricing trying to lock out other vendors. Time to complain to the regulator.