It is Obvious

Chris Rick has got altogether too much to say

Archive for June, 2017

Oh Dear

Posted by chrisrick13 on June 23, 2017

It is obvious: in the Brexit negotiations the government has the pick of the country’s negotiators to use to get us a good deal


I’m not a good negotiator. Eventually I realised that I could learn about it and if I knew what was going on then I could improve. At the very least I can spot when the other side is playing a ‘trick’.


There are obvious ones like good-guy/bad-guy. Everyone knows that? But then there is time pressure and the nibble. Never volunteer information. Many others.

I have two favourites: the silent close and enumerating. I use both of these techniques a lot.

One of the big mistakes that novice negotiators make is to try to negotiate by giving. They think that by giving a gift the other side will reciprocate. This never works with an experienced negotiator. They just take the gift and ask for more.  Let me give an example from today:

Theresa May: We will give all the EU citizens a good deal staying in the UK.

Donal Tusk: that’s not good enough.

The obvious starting point is:

Theresa May: we might be interested in some benefits for EU residents – what can you offer in return.

If you set out your conditions then the only direction is away from them to a lesser position.  Ask for something ridiculous and you might be able to get to what you want but the other side is very likely to ask for something equally ridiculous back.


It is obvious: in the Brexit negotiations the government has the pick of the country’s negotiators to use to get us a good deal – pity we’re not using any of them.


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I’ve got a spec in my eye

Posted by chrisrick13 on June 20, 2017

It is obvious: you can’t rely on foreigners

Have you noticed? Japan has a debt at over 200% of its GDP. That’s OK because it owes the debt to the inveterate savers of the country. Is it that it easy to take the money away from your own population and nobody else will care?

Japan was a dominant force in the world economy 25 years ago. Now it is still a large economy but there are many problems. The demographics of the country are not good…at least until all the old people die off and then there is a virtuous circle. There are some large Japanese corporations that are all but bankrupt. I wonder how the average Japanese in the street thinks about the government decision to buy millions of Yen’s worth of Mitsubishi bonds?

Just a short distance away is China. It’s debt to GDP ratio is over 250%. Not much of that was lent by the Chinese people! Economics has moved away from the history books but when a country starts expansionism it is often to hide internal problems and we can all see what China is doing in the South China Sea. Another indicator is the large numbers of rich Chinese ‘getting out’.

I have also started frequently reading the comment ‘hard landing’ applied to China. When the world’s largest economy suddenly changes its path then there will be a lot of turmoil one way or another.

So the world’s two largest economies are in what can best be called unstable states. Third up, Japan, is in a third ‘lost decade’. Europe including the UK is also in a state that is at best unstable. One of the BRICs has already collapsed – Brazil. Russia is suffering with the low oil price and that is on a nice downward trend at the moment. Russia only has oil. It does not have a good industrial base or strong agriculture. Africa will grow to significance one day but not for a long time.

We have come a long way down the order of things to arrive at India. Will India save the world economy? I don’t think so.


I have just thought of a way for the UK to resolve its economic problems. There is plenty of precedent with Mr Carney running the UK economy. Eddie Jones running the English rugby team and Mr Gatland running the Welsh. We need a new man at the treasury.  A foreigner.  Mr Mugabe will soon be done with his current job. He did so well with the economy of his country…

It is obvious: you can’t rely on foreigners they’ve learnt from us how to screw things up

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…a lot of sheep and lemmings around as well

Posted by chrisrick13 on June 20, 2017

It is obvious: the Bank of England knows what it is doing

Mr Carney spoke yesterday.  There is plenty of analysis on the WWW.  He appointed a new external member of the MPC.  This is someone who has expressed views exactly in line with his – as difficult as they are to discern.

If I were Mr Carney I would do the same.  That is why I would expect that the choice of person would be out of his hands.

We have something that is at the heart of the economy of this country – the base rate.  The MPC sets the base rate and is now full of people who will do exactly what Mr Carney wants.  So we have handed the control of the economy to a Canadian chosen by a politician who is no longer around.

I have to go back to Tony Benn’s five rules of democracy

“What power have you got?”    Absolute.

“Where did you get it from?” Given by another individual…democracy?

“In whose interests do you use it?”    I don’t know but not the UK

“To whom are you accountable?”    Nobody.

“How do we get rid of you?”     Have to wait until your term is up or you decide to go.

It’s not as if he is any good at his job.  Look at his forward guidance and the forecasting record of the BoE.

What is happening is that there is a huge dislocation coming in the finance system of the world.  Those at the levers are merely delaying it instead of tackling the problem or preparing for the dislocation.  What they cannot do is ever to admit that there is a problem.  It is the emperor’s clothes in reverse.  Everyone can see it, just that those in charge have to deny it.

How and when it will happen I am unable to predict.  Greece might cause it.  Portuguese banks.  Italy.  The UK.  North Korea.  The result of the Lions test series.

What will happen in the UK is that there will be a run on the pound that is only defended by interest rate rises…which just cannot happen.  This would have millions kicked out of their houses.  I had a mortgage for many years when interest rates were in double figures.  For many who are ‘JAMs’ this will mean their mortgage payments will increase by a factor of 5.  Lots of barbed wire.  Back bedroom full of tins of baked beans.  Shotgun and lots of cartridges.

Don’t worry though – Mr Carney has it covered…until he cuts and runs.  Less than 2 years now.

It is obvious: the Bank of England knows what it is doing.  Exactly what Mr Carney wants it to for his best interest.

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Watch out! A plague of Turkeys and now Goldfish.

Posted by chrisrick13 on June 19, 2017

It is obvious: a week is a long time in politics

The EU negotiators are hounding the UK to start negotiations.  I find it odd that nobody mentions that the EU refused to start any negotiation until the French election was over.  They were also including the German election date but have rode back from that because of the ‘good’ French result.

I have heard that the EU have also refused to start negotiating until the UK agrees to pay £40bn compensation to the EU.  Someone not used to negotiating (most people) might not realise that it is itself the start of negotiations!  I wonder if we will soon be negotiating over seating positions at the table?  Something my generation knows about only too well.

Less than 2 months ago the Conservatives took hundreds of seats off the Labour party in local government elections.  Less than 2 weeks ago the Conservatives polled more votes than in the previous election.  This is not a party in disarray!  Mr Corbyn has been better advised than Mrs May but I wonder that he can keep it up?

It is obvious: a week is a long time in politics and a lot longer than the memory of most people.

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The slippery slope

Posted by chrisrick13 on June 13, 2017

It is obvious: I used to worry about how little oil there is left


Last week it I heard that more than 50% of the UK electricity consumption came from renewable sources. The list quote included nuclear. I think that stretches things a little. Though maybe a fast breeder power station does do it? Other than that Thorium and Uranium are not renewable.

If I climb out of the nuclear hole I have dug for myself then all energy comes from the sun. The primary source. Oil is just energy from the sun that stored away for a long time. Solar is much more recent energy. Wind, wave, tidal, hydro-electric are all taking energy from the stored kinetic energy of a spinning earth. I think that ultimately comes from the sun?  It is large enough that we’ll be pressed to slow the rotation by even a second over the next several thousand years.  Not renewable though.

Oil consumption has crept up. Can’t understand why there is more consumption at $50 barrel than there was at $120+. Price should have moved? If not why not?

Electricity production has moved away from oil of which there was not much. It is using gas and coal…and renewables.

A step down from burning oil in car engines is not far away. No energy-saving as such but it will come via renewable sources. More efficient use will soon be here with driverless cars and the move from owning to renting as needed.

The sailing ship phenomenon has exhibited itself with the improvements in oil extraction methods. (Interesting that after all this time Saudi Arabia is selling off its oil reserve. A good reason for that…?)

So I predict no big oil crunch for my lifetime (and I just predicted 352 seats for the Conservatives in the general election). I think an oil crisis could well be managed some long distance into the future. Do not forget that nuclear fusion is probably going to happen over the next 20 years.

When oil runs out in certain places interested parties queueing up to settle a few scores will be a bigger risk ever than oil running out.


It is obvious: I used to worry about how little oil there is left – I’ve got more important stuff to worry about now

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Put the oven on

Posted by chrisrick13 on June 9, 2017

It is obvious: Christmas is early this year


The country has had enough of austerity. For any number of reasons the young voted for Labour but one of them was wanting to be done with austerity.

Why is austerity even talked about let alone become a part of Conservative policy? The reason is that as a nation we have borrowed more than we produce each year. This money will have to be paid back…sometime. It is not an invention of the Conservatives it is a (poor) response by them to do something about it before it becomes a problem. That is saying it too nicely. Need to do something before an utter disaster strikes.

The finances of a country are like yours and mine but not the same. Beware. A country can borrow and be quite profligate. The lenders know that the peasants will be whipped into the fields to work to pay off the debt…look at Ireland and eventually Greece.

Some overspend is looked on as good governance, but too much… It is paid off in one of several ways. Decent inflation robs the lenders and mostly that is the population. Strong growth allows maintenance of the interest payments so the can is kicked. Problem is that at some point the exponential curve takes over. This is why debt to GDP ratio of 80% is recognised as a step too far. The government can squeeze taxes and cut spending. Over a long period were it maintained then the debt could be reduced.

If you don’t succeed with at least one of those then the country will default on its debts and the lenders suffer. There follow many years of extreme pain as the lenders take their revenge and then the country is rehabilitated.

The problem with any success at paying off debt is that a new government will come along and spend it again. So paying debt off never works.

What do all these scenarios have in common? The money is spent now for the benefit of the older generation and the next generation (or the one after) has to pay the bill and/or suffer the pain.

This next generation is the one that has just supported Labour in large numbers. This is the Labour party that will continue to run up national debt and proposes to set up a bank to borrow a further £250bn and spend it…for that generation to pay off.

Do I care? At 66, no I do not.


It is obvious: Christmas is early this year – the turkeys have been out in force voting.

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Oh dear

Posted by chrisrick13 on June 9, 2017

It is obvious: the British people have spoken

I got that wrong.Why am I not happy.  We got a ‘none of the above’ result.

I hoped for a big Conservative win so that we would have a strong hand in negotiations with the EU.  I was wrong.  We don’t need it.  We still have a strong hand.  Instead of negotiating with a dogmatic approach from a strong position we now have negotiators who will say to the EU that if they don’t get what they want they will call another election.  Whatever that result it will be very disruptive and bring time pressure into the negotiation. A failed negotiation looks very possible unless the EU gives a lot away. If they don’t the bloody-minded English (I do mean English) will tell the EU to get lost.

There was some small delight in the results.  The SNP had a bad time of it and independence will disappear as an issue.  Add to that, Alex Salmond lost his seat to complete a Scottish upheaval.  Maybe I’ll see less of Ms Sturgeon on tv now.

I think I care little about the goings on in parliament.  The lives of the people of the UK will be little affected by the great drama coming in that building…or just down the road as they try to stop it falling down.  Probably another election before the end of EU negotiations but this time forced by a vote of no confidence.  Alas, there will be no attempt to balance the UK budget or to try to cut national debt.  At least Mr Corbyn did not get in and immediately borrow £250bn.  Our children will still be getting a big bill in a few years.

If I do look at parliament I would note that we have a two-party system that does not lend itself well to coalition governments.  We need at least 4 parties each with 20% or so of the seats.  Then decent negotiations to create a coalition government using policies from all the 3+ parties in that coalition will happen.  Wishy-washy stuff though.  We’ll be back to two parties soon enough.

Not for one moment did I think that this election could be a trigger event.  Who cares about the UK?  How can it affect anything?  The UK could be the brick in the spin drier though.  Keep filling your back bedroom with baked bean tins.


It is obvious: the British people have spoken – we should know better by now


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Election special

Posted by chrisrick13 on June 8, 2017

It is obvious: the Conservatives will win

I want to say 358 seats but I’ll curb my optimism and say 352. That is a working majority and big enough not to emasculate Mrs May…if that is possible!

That will put Labour on 250 ish. How they must hate the SNP.

The Liberals will be back to where they always were when I was young.

I looked on my ballot paper for the “none of the above” box but there was not one. I looked for the Monster Raving Loony party but there was no such candidate in my constituency. The Greens were there but they are Trotskyists with a thin veneer of ecology. UKIP have done their job – I wonder where Mr Farage will pop-up next. He is one to watch. The Christian Alliance have no place in politics. An independent guy who I don’t know so I wouldn’t vote for him. The Liberals seem to be plotting a course that navigates between Conservatives and Labour. Driven by others not themselves.

Then there were two. That nice Mr Corbyn is only going to spend about £60bn more than he gets in…if his numbers are right. He will tax businesses away from this country. He is not going to do any pip-squeaking but there are plenty will get out from under. But what he will do is borrow £250bn and spend it. Borrowing to spend kills people. It kills them in the future and puts the burden on our children. I’ll shoulder my pack today thank you.

What does that leave? Oh dear.

It is obvious: the Conservatives will win, but will the UK?

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