05 October 2011

Hello again

I'm toying with a total revamp of my blogging output. Once a couple of big projects are out of the/proper under way, I'll think about how that'll work. But in the meantime, a rambling rant...

It looks like big chunks of the globe have a once-in-a-lifetime opportunity to remove a lot of the clutter from their economies - allowing their finest minds to focus on long-term planning, innovation and genuine wealth creation.
They can nationalise the financial services system.
Here's the problem. Financial services has grown up rapidly thanks to people's innate greed - not just that of bankers and City traders looking to boost activity in order to skim off fees and carry. No, I'm talking about *most* people.
We're sold the idea that we should look for above-average returns on our savings and below average rates for our mortgages. We spend time and money delegating that obsession - because we're scared of being the "dumb ones" but too lazy to do anything about it ourselves - to the financial services industry. It then spends massive amounts of money and layers in huge complexity to try to deliver those returns. And it mostly fails.
Some people will get lucky in their choice of unit trusts or mortgage. Some companies will benefits from that high-falutin' hedging strategy, or get a few extra points on their cash holdings using complex investment approaches.
But for every winner, there are losers. The only consistent winners are the very, very smart people - Soros, Buffett - and the very lucky. Oh, and the bookies (as Billy Ray Valentine so memorably put it) of course. Goldman Sachs partners tend to be very, very rich.
The irony is that the essence of the financial services industry's offer to individuals and companies isn't very complicated at all. A big group of people club together and share the risk of investing across a range of projects. Basic risk management allows you to charge those projects more or less for those projects on the basis of their chances of success or ability to repay. The returns are shared out among the investors with a mild weighting for the amount of money they put in.
It's that simple.
(The fly in the ointment is forex and commodities hedging. We'll ignore than for now - although really all we're talking about is smoothing...)
The way to make it happen is to have one big bank. Every depositor gets a risk weighted return, every borrower pays a risk weighted interest rate. We're all in it together. Suddenly, we can forget about asset allocation. We can forget about "beating the market" or "underperforming". We all pay less in fees, so we get better value for money.
(The Tea Party likes to talk about the taxes government levies - what about the taxes Wall Street levies, hmm?)
So seize the opportunity. Make us all average. Encourage companies to manage risk better, plan for the long term - and allow us all to do so, too.

07 December 2010

FD culture strong at Tesco

Andrew Higginson, the star FD at Tesco who was groomed for the highest levels of general management and currently serves as retail CEO, might be the most media friendly finance chief in the UK. But group FD Laurie McIlwee's appearance on Radio 4's Today programme - a slot Higginson was no stranger to - shows the supermarket giant has a strong culture of openness, communication skills and broad based experience in its finance function. Fair play for consistency - and a great attitude to finance folk.

19 March 2010

Long time, no speak

Just a quick one (because deadlines are horrific today - that's a reason for posting, not a reason for being brief). David Books at the New York Times highlights Philip Blond in his column today. It's well worth a read, even if you know about Blond, ResPublica and Red Toryism.

But it got me thinking about tax. I think the fundamental question is not whether lower taxes should happen - who thinks they shouldn't? It's when. On the left, you have people who acknowledge the need to revitalise communities and reduce the power of big government and corporations - but see tax revenues of providing the support systems to help that happen. On the right, people who think by lowering taxes, you weaken central government and allow communities to flourish.

That's why I'm not buying this as a Tory philosophy. We may well have built the nanny state - and we probably ought to be weaned off it. But this is no time for tough love. It's time for creative and well-directed leadership aimed at a controlled shift in the way we run things. Thatcher thought she could slash government spending on science and technology in the 1980s and the private sector would flood in to take up the slack. It didn't. And in the 2010s, we also must be skeptical about how quickly the people or the private sector will take up the reins responsibly.

(Labour, for what it's worth, look equally incapable of genuine and needed leadership. This election's going to be annoying.)

31 August 2009

BBC attacks miss the point

James Murdoch's attack on the BBC was stunningly unoriginal. I'm not talking about the substance of his fusillade. The traditional right-wing accusations include a socialist agenda and manic political correctness (this, from the broadcaster that brings you Jeremy Clarkson...). His entirely capitalistic rant was something relatively new.

No, the unoriginality stems from the style of his tirade. By using over-the-top language to describe the BBC - including its "chilling" ambitions to, er, inform, educate and entertain through various media - he was aping the tactics used so frequently on that other arm of the Murdoch empire, Fox News. It's all about strategic use of hyperbole to whip up the audience into a frenzy without actually delivering any answers. Once the mob is unleashed, the smart money can choose the solutions it wants without worrying that the mob has an agenda behind its destructive fury.

Or, as the Yorkshire Ranter puts it, you "provide a focus for indignation; something to get worked up about, or in other words, a piece of politics-without-thinking."

The other advantage of wild hyperbole is that it makes the merely stupid or self-interested views of those on your side of the argument seem more credible by comparison. So we now have Dawn Airey wading in with calls for the BBC to charge for services outside its main two TV stations and five radio channels.

It's stupid for a whole bunch of reasons, but mainly because Dawn seems to think that the web is a bit like TV only on a computer. I guess her thinking is that if you force people to pay for the BBC web site they'll stop going there and visit... the web sites of commercial TV stations where they can be fed contextual advertising? Huh?

If you shut down the BBC web site tomorrow, my guess is that the biggest beneficiary would be Google (although its servers would probably barely register the rise), followed by the national newspapers and then a slew of bigger-name bloggers. My guess is that Five's web site wouldn't see one iota of change.

What about a pay wall? Well, lots of people wouldn't bother any more, of course (in which case, see above). But those who did pay extra - who could afford to pay extra - would probably get their money's worth more by spending more time there than they do presently. Assuming there are a finite number of pay web sites these users are willing to subscribe to, such a policy would also rob a "commercial" web site of potential paying subscriber. And the BBC would generate revenue to invest in... even better commercial services!

In fact that's the last thing Dawn and her commercial TV buddies need. So what really ails them?

It's not the BBC. Well, not only the BBC. Beeb ratings are a fraction of what they were 25 years ago - and more people and watching more telly these days. The answer, of course, is multichannel television.

I have about 40 channels on Freeview. Eight are BBC channels - so its share of the bandwidth is 20%, against 50% 25 years ago. For homes with a satellite dish, it's a fraction of a percent now. It seems stunningly obvious to me that the real reason commercial TV is in trouble is that it's spread itself far too thin.

Sure, in the early days, stealing share from the BBC was an easy way to fund new channels. But there came a point of diminishing returns. Cannibalising their commercial brethren was inevitable. Advertisers still had a limited budget (have you any idea how cheap it is to put on a commercial at the moment?).

And when Sky spoiled (as in child; also, as in ruined) football in order to steal even more viewing hours, surely that was the end for the other commercial stations. Viewing figures are low, viewers have other pursuits (and much as Dawn might hate this fact, millions more hours are spent on Facebook and porn sites than on the BBC - check out the Alexa rankings...) and both the talent and the advertising budgets are spread too thin.

In fact, why isn't Dawn attacking Murdoch for failing to jack up Sky's subscription prices more? Why isn't she complaining about kids today not spending enough time glued to the gogglebox instead of interacting with their online communities? Why isn't she lambasting Sky for pumping so much money into the English Premier League that other football (her own UEFA Cup coverage, for example) looks shit by comparison?

The BBC is not perfect, by any means. But it's just like the NHS: I'm thankful every day that it's there. James Murdoch's ad hominem attack on Auntie Beeb is a carbon copy of Fox News's campaign against our health service. They must both lose.

PS. Just to be clear, I do think the BBC does need to change. I'd ditch BBC Three (the best bits could migrate happily to One or Two or be taken by their indie production companies to the commercial stations). I'd cap BBC bidding for recommissioning popular shows, allowing commercial stations to buy them up. (Why does Top Gear need to be on the BBC? I imagine it's very expensive; ITV would leap at the chance to show it; and I can't see someone like Clarkson curbing his style to satisfy car advertisers, can you?) And I'd shut down local radio. There would still be local reporting - via the web sites and local TV news. But local commercial radio is on its death-bed. (Actually, that last prescription might be too late...)

Bottom line? The licence fee is there to guarantee that we receive services that the commercial sector cannot or will not provide. That means outstanding and independent news and current affairs; in-depth investigations; solid gold documentaries; high art; science and religious broadcasting; drama and comedy from new writers; special interest coverage - particularly, for example, in music; and "crown jewel" programming - which would include even high profile sports where the governing bodies aren't too stupid to take cash over profile.

It does not mean Hollywood movies, lame sitcoms, celebrity lifestyle, property shows, most reality TV, most game shows, most US imports - anything, in short, that you can find on free-to-air commercial stations. Will that satisfy you, Dawn?


UPDATE: I've just read what the ever-excellent Felix Salmon has to say. Read the post: it kind of explains why he gets paid more for blogging than I do, although I think we come to fundamentally the same conclusions.

18 June 2009

A quick one about iPhone 3.0

A lot of people have been underwhelmed by the new iPhone firmware. Which is a bit odd. It's doing all the things they told us it would be doing, and pretty well for the most part. But the best things are the tweaks they didn't make a song and dance about. More on those in a minute.

Some of the new features we were told about are situation specific - I'm looking forward to my iPhone automatically logging on to BT Openzone hotspots, for example, which was always a pain under the old firmware. When we get to use those kinds of features, I suspect the upgrade will feel a whole lot more significant. Push, in-app purchasing, Safari autofill and the iTunes refinements also fall into those categories. (Also, proper satnav, when tomtom pulls its finger out and I decide it's worth the vast money they're sure to charge.)

Other developments are relatively simple tweaks or features that probably should have been in the original iPhone, so don't appear that amazing - I'm thinking MMS. But that's well implemented (once you've texted 1010 with the message "MMS" and been activated, of course) and looks like being really fun to use.

Cut and paste works well. I love the new Spotlight search. The landscape keyboard is much faster, even with fat thumbs. The new stocks app is lovely - I might even start putting individual companies in there now, not just indices.

Here are the things I'm loving that weren't flagged up. First, it feels faster. Maybe that's just the reboot effect, and of course some of the upgraded apps like Safari are designed to be faster. But it's still a plus. Second, when I added a couple of new apps, they didn't appear on my first menu screen - they went to screen two. That's important: most people designate the first screen with their most-used apps, so new purchases appearing there makes no sense. Third, I listen to a lot of podcasts - so the new controls on the iPod app are brilliant. I haven't tried out the mail button yet, but the "rewind 30 seconds" will be a boon to anyone who loses the thread during a podcast or radio show; and "play 1x, 2x 0.5x" option is perfect for fast forwarding through boring sections. Fourth, the camera is faster - and is it my imagination, or are the pictures slightly crisper? I'd need to take some shots in the same lighting conditions as some grainier photos from the old firmware, but they seem just a bit sharper. Also like the thumbnail view on the camera.

Overall, then, I can't exactly disagree with the people who say they're a bit deflated - this is not a brand new phone, it's true. But I still really like the refinements, and I'm guessing I'm going to keep on discovering new things to like about iPhone 3.0 for a while yet. And hey - perhaps I'm not the fanboy - perhaps the people who are disappointed are the real cult members. They're the ones who somehow thought this new, free software was going to Santa them up a magic new communications device.

UPDATE: Already, another nice hidden feature, courtesy of MacOSXhints: in Mail, if you select text in an email, then reply, only the selected text is quoted. Nice.

01 April 2009

Apologies for the lack of updates

I guess this is as good a time as any (i.e. the optimum time to deploy it as an excuse) to announce the birth of Heidi Angela Beryl Young on March 13th at 15:41. Although fatherhood is taxing, it's a very natural experience (so far) and I've been surprised at how much work I've been able to do. A big reason for that is my supremely capable wife, of course. More blogging this year, I promise. Despite the sleep deprivation.

04 March 2009

All forecasts come right eventually

Well, although I had some doubts about my predictive abilities, it turns out I am some kind of sage after all. The FTSE 1000 has hit 3,500 (near as dammit) and I'd say it's starting to look like "fill your boots" time. Almost.

The problem? Well, it's not downside risk - the headline index is unlikely to slide below that low of 3,300 plumbed six years ago. And it's not opportunity cost - where else are you going to invest right now?

It's liquidity and upside risk. First, only the very rich (and I don't know any of them) don't need access to a chunk of cash in case of emergencies right now. If household income degrades (a euphamism for redundancy) the mortgage still has to be paid and Sir Terry Leahy will want his cut. Second, things might not stabilise and move decisively to an up trend until the autumn. (Remember the old Market saying "sell in May and go away"?) By September, the market will have got its head around the recession and calmed down a bit. Low returns elsewhere will be making equities look much better again. And you'll have six months less of the recession to worry about when you're looking at your cash savings.

(Blast. That's another prediction - and another opportunity to be wrong!)

24 February 2009

Want to see how we've all changed?

Gmail is down. Wow. Looking at Twitterfall, it's a global phenomenon. And because Gmail is a) so widely used; and b) so fundamental an application, the outpouring of feeling is palpable.

Several emotions are evident. Surprise is common. Denial - which is usually associated with the early stages of grief, of course. There's some amazement. A fair smattering of disappointment. Anger isn't too strong a word for some users. Quite a bit of fear. And annoyance, of course.

Interestingly, many of the "annoyed" posts are directed at in-house IT departments (for supposedly limiting access to non-work email), ISPs (coz the problem couldn't be Gmail's) and at themselves - for relying on cloud computing.

The "fear" posts also tap into that nervousness about the cloud (what will do for SaaS sentiment, I wonder... guess it depends how long the outage lasts). But there are also lots of wry people - they seem amused that such an incredible thing could happen.

You know what I imagine this would be like? If aliens invaded Earth. I'd imagine the same set of emotions (for IT depts and ISPs, substitute governments, for example) afflicting us all - equally global, equally stunning.

UPDATE (10.54GMT): Interestingly, it appears I can still access Gmail via my iPhone's Mail application. Good news: both the Gmail back-end and my iPhone are robust and reliable. Bad news: I'd still love to have the Gmail front-end back! Also, IMAP synch from my desktop Mail.app is only partially working. Very odd...

UPDATE (10.59GMT): Mail.app now merrily synching with IMAP, although iPhone now also occasionally can't find the server. I wonder whether Gmail users all over the world are firing up and synching local mail applications, placing a heavy burden on the servers and bandwidth?

UPDATE (middayish): All good. And to all the Gmail haters out there, how fast did your tech support/ISP guys take to fix the last organisation-wide email failure at your domain? Longer than 90 mins, I'll wager...

19 February 2009

Pop quiz: when did I write this editorial?

A week before we went to press, National Express fired its finance director. As I’ve said before, it seems that a lot of FDs have left their jobs recently in “unfortunate” circumstances, seldom of their own doing.

In this case, FD William Rollason had been filling in as chief exec while CEO Phil White was on protracted sick leave. When White came back, Rollason left. “We need a more operational, hands-on, finance director rather than somebody who has a particular strength in the corporate finance area,” said the CEO.

Am I missing something? An FD who’s been with the company three years steps up to the top job. He sheds the old “bean-counter” image. And he does very well, thank-you very much, as chief executive for months. Then he’s dropped because he’s too versatile?!

I’ve really had it with defensive executives who can’t handle the modern financial manager. Don’t they get it? Once more, with feeling: the FD is one of the few people who can tell you hard facts about what is happening across every facet of the business. A good one, with strategic vision as well as the ability to report on the business and control costs, is worth their weight in gold. And they’re worth a lot more than White’s throwaway quip about his long-term illness: “The doctor said it was an aversion to finance directors.” Ha. Ha.

I’ll concede one point to White. We mustn’t forget to be prudent this year. That’s something the British population at large seems to have forgotten in [LAST YEAR]. Despite all the warnings, last year we borrowed £40bn against our homes and spent it on widescreen TVs and other luxury goods.

I’ve nothing against borrowing against your assets per se. Most FDs, even in this downturn, will be able to find projects that deliver returns above the cost of capital, especially with interest rates so low.

But how many of you would borrow to the extent that you were increasing profits to the tune of six per cent per year, then blow the dough on non-earning assets? That’s how much the national income increased last year thanks to home equity withdrawal, and much of it has gone to fuel the consumer boom.

While you and your fellow directors have been exhorted to apply the highest standards of corporate governance and look at the social and environmental aspects of your financial decisions, the masses are out their doing an Enron (well, almost). Even if house prices stabilise, the consumer boom is definitely over in [THIS YEAR]. There’s precious little equity left to borrow against; the credit cards are maxed out. It’s going to be a challenging year. So companies will need FDs with the *full* range of skills if they’re to exploit to the expected upturn in the last quarter.

"Twitter ye not"

Just a maintenance post, and a chance to get something off my chest about twitter.

People seem to be using it all wrong.

OK, I know that's hardly fair: there's no "right" way to use something like a messaging service. And I'm following some very inventive feeds using it in clever, non-obvious ways. But it's medium that leads people to become egomaniacal and arrogant (especially as their follower numbers mount - which I think causes a form of Messiah Complex). Let me give an example.

A well-known specialist journalist of my acquaintance is a heavy twitter user. He likes it so much, he's said in the past that it might replace, for him, email and RSS feeds as a means of staying in touch with his interest groups. But subscribing to his twitter feed has been a painful experience. (He's not the only culprit - I've unfollowed lots of people for the same reasons I've ditched his twitter feed.)

There are three huge problems. First, as a twitter fan, he uses an awful lot of twitter shorthand. For those of us not au fait with the jargon, that makes them impenetrable. (New tweet conventions seem to spring up every day - some obvious, others positively runic.) I think that's unforgivable for a journalist. As professional communicators, what we write should be clear, direct and concise. The 140 character limit on twitter rewards directness and conciseness - but it torpedoes clarity in many tweets.

SOLUTION: tweet a lot less. Blog more - where you can write to the right length, then perhaps use clear, plain english tweets to flag up new posts. (Note: this journalist blogs plenty and does tweet new blogs... in between screeds of unintelligible tweets that make my head hurt.)

Second, twitter is a broadcast medium. But it encourages person-to-person communication. The number and proportion of this journalist's tweets directed with the "@" sign to specific individuals is huge - and most of them are utterly uninteresting to me as a result. Because I'm only seeing part of the conversation - and have no interest in following everyone my colleague follows - the signal-to-noise ratio gets even worse.

SOLUTION: tweet a lot less. If the conversation is one-to-one, for god's sake email. If it's a relatively narrow interest group, why not go to a group or chat-room - try using this for hot topics: http://www.tinychat.com/. If you tweet, you tweet to all your followers, and it seems rude not to address them all in that case.

Third, twitter is an over-public medium. Think of the internet cloud as a giant pub. If I want to talk to someone I know quietly in the corner over a beer, I use email or IM. If a small group want to chat about football or politics, hugger-mugger in a booth, it's a chat-room or perhaps a comment thread. If I have something I want people to read, I might leave a flyer on the tables or in the loo - put up blog post or a web page. Twitter, however, is the equivalent of the bloke in the pub who won't leave you alone. He has to tell everyone he's ever met there exactly what he's been up to - IN A RATHER LOUD VOICE. And he'll often bore you with stories about conversations he's had with other people (often people he barely knows). He's slightly shouty and a bit of a boor and he thinks everyone really likes him. (Let's just be clear: I'm not saying my journalist friend is like that - just that heavy twitterers can come across that way.)

SOLUTION: tweet a lot less. Why not do it only when you have a very open question that anyone in the pub might be able to answer? Perhaps use it as an online equivalent of shouting "there's a fight in the street!" - a public service to those in the pub: clear, unambiguous, concise and useful. Then if someone rushes out with you to take a look, you can discuss the brawl one-to-one without annoying anyone else.

In short... tweet a lot less. I'd like to follow more people - I like people, lots of people have interesting things to share - but there's a limit to how many tweets I can plough through in a day. If that limit is, say 200, and everyone puts up 5 tweets, that's 40 people I can keep track of. If two people stink up Tweetdeck with 50 a day each, then my twitter population halves.

I still follow my journalist's blog entries via RSS. He's interesting, well-connected and informed. Articulate, even. But his twitter feed is dead to me. My favourite US political journo, now a White House correspondent, is next... unless she calms the frick down. (Sadly, her blog is less frequently updated.) An expert in global accounting also need to re-learn the value of email, IM and texting (especially when she's being flirtatious) or she's on the block. (Her RSS feed is good, thankfully).

As the late great Frankie Howerd might have said: "Twitter ye not!"

15 September 2008

Dead cat bounces

While I'm far from being an expert, all this investment banking panic seems to present an market opportunity. I still think the FTSE100 will bottom out at 4,500 (give or take 10% - see, I told you I'm no expert...), but this Lehman nonsense will cause an overselling today and maybe tomorrow. That generally provokes a bounce. If I wasn't neck deep in National Savings, I'd be buying the FTSE at 5,000 and looking for 5,500 as a sell-out point before the bear run continues...

14 September 2008

And so, a return

Been a long time, but even now it's not business, management and finance I'm keen to commit to posterity. It's politics, and in particular the art of winning elections. This more than anything seems to be at the heart of the malaise that afflicts us - leaving us with lacklustre politicians and an intellectually crippled electorate.

Once politicians - actually, the political ecosystem - embraces "electoral strategy", it loses any need to deliver innovation or leadership. Skilled politicking becomes the chief decider of any election. It's easy to blame the media, and in particular press barons who fancy they wield true power by deciding who to back. In reality, I suspect politicians are only too ready to resort to crude electioneering as a substitute for winning over an electorate. The media are simply their means of expressing this baseness.

Was it ever so? I'm too poorly read in political history to judge. I'm sure Churchill was something of an expert in electioneering. But he had the fortune to practice politics at a time of polarisation - not least, of course, during the war. Radical polar opposites require politicians to take a line and stand by it, even if they sell their expertise with spin and polish.

Now, however, the famed "end of history" has left us with nothing but the spin. We're all agreed on liberal democracy, regulated capitalism and social equality. And politicians have seemingly stopped making judgments about genuine right and wrong; and/or they have decided that conventional wisdom is much more important than enquiry. Why bother investigating the drugs problem from the bottom up, say, when the top-down conventional wisdom is so well entrenched that nothing is likely to shift a majority from their ill-informed positions? After all, even if you accepted that a reformed drugs policy might deliver social, financial and personal improvements, such a policy would (at best) require a huge effort of leadership - and at worst, render the proposer electorally unviable for some time.

So we end up at the logical end-game: politics for its own sake. Professional campaigners defining not just the election itinerary or the billboards or the PPB - or even the manifesto (gahhhd - last time politics defined a mainstream manifesto, it sunk the party, Labour 1983). They define... everything. At all times.

We get David Cameron and George Osborne. (We should salute Tony at this point, a true pioneer being the first pure "electoral strategy" PM.) We get Sarah Palin. We get no idea of what we're voting for, because the electoral strategists know that standing for anything really definitive gives the opposition something to target. When politics is all about mud-slinging, why give the other side something to aim at?

Some people - Danny over at Times Comment Central sadly falls into this category - worship electoral strategy. They see it as the high art of politics, the definition of "clever". Purpose, vision, direction - they seem lost, or at least painfully naive in the face of clever politicking. And the solution? There is none. Oh, the Lib Dems can shout into the wilderness, but they exhibit plenty of the wrong attributes, too. And why wouldn't they? There's only so long you can fight the good fight before low blows and steroid abuse wear you down and you think the only way you can beat them is to join them.

I loathe it. And perhaps that's the only hope. If enough of us loathe it enough... perhaps things can change. But I fear catastrophic failure of our system and exposure of the pathetic games-players in the high offices of political parties will get us even close.

22 May 2008

Blimey

Has it really been six months? Well, if you're hungry for some Richard action, I'm back blogging at EquityFC.com (see link, right) and I'm also blogging for the ICAEW at their new online network ION - visit http://www.ion.icaew.com/itcounts/blog/ for more details.

You'll be able to tell that I'm on my uppers when I have the time to update this blog more frequently!

01 November 2007

BPO - it's OK really

I've been sceptical about finance function outsourcing (actually, BPO in general) since a FTSE 100 FD told me he'd love to bring his dull, process-driven teams back in house and re-locate that "feeling" about the business, its suppliers and customers he got from having on-floor feedback from the "drones". But I had breakfast this morning with a BPO expert who assured me that many of the biggest issues - contracts, service level agreements and pricing plans - are being addressed by great minds in the BPO and consulting arenas.

Hmm. Still sceptical. But one thing she said did ring true: the biggest BPO problem is clients. I agree 100% - if the client doesn't know what they want, how they want it to happen and where the trip-wires are, who can blame the BPO provider for locking them into an expensive screw-up? Which is why I always think that unless you've done two BPO deals before - and seen how they go wrong - you shouldn't try it (at least not for a company you love). Catch 22? Well, pick a couple of companies you don't like and do it there first...