Dragons Den

This is an interesting one.

 

Chinese Property Developer, Greenland, is to invest £600 million to build 600 new homes as well as shops / bars / cafés by redeveloping a 7.75 acre site in Wandsworth, London.

 

No big deal I hear you cry……foreign property and land investment occurs all the time. Here are the twists……

 

Firstly, Greenland is one of the biggest property developers in the world but this is its first acquisition in the UK……it now sees opportunities in a stable and growing UK economy.

 

Secondly, Greenland is owned by the Chinese Government and this is a significant signal that China wants to back the UK.

 

China is the second biggest economy in the world and the fastest growing over the past 10 years. It will overtake the US as the biggest, more powerful and most significant economy in the world over the next 15 years (or so). China backing the UK is significant……very significant. This will be a reoccurring theme over the next two decades.

 

Whoever is elected Prime Minister next year better know their Chinese culture inside out……our prosperity depends upon on it.

 

只是一個想法

Not INTERESTed?

Big news today on Unemployment……falling at it’s quickest rate for 17 years to 7.1%.

 

Good news right? WRONG!

 

In short, if unemployment reduces any further it will reach a level that will trigger the Bank of England raising interest rates. They told us that it wouldn’t happen until 2016……it’s taken just 5 months.

 

75% of all homeowners have a variable rate mortgage. That’s 75% of homeowners that will have to pay more for their mortgage, have less to spend and the economic recovery will stall.

 

I don’t want to say I told you so but……

 

http://stevesmithlive.blogspot.co.uk/2013/08/interesting-times.html

 

If you decide to link interest rates to a measurement that isn’t correlated (unemployment), you get a problem. We now have a problem.

 

The only surprising thing is that it has happened a little sooner than we thought.

 

 

Know Your Voters

One of the standards by which any society measures its decency is its generosity towards the elderly.

 

The Prime Minister, David Cameron, is harping on this theme at the moment repeatedly, announcing that pensions would rise by at least 2.5 per cent a year over the next parliament if he were re-elected in 2015. The key point being……if he were re-elected.

 

Let me enlighten you further……

 

- The General Election is next year.

 

- 1 in 6 of the voters next year will be over 65.

 

- In the 2010 election, 76 per cent of over-65’s voted and this is expected to rise next year.

 

You get where I am going with this…..the importance of pensioners as a voting block is huge.

 

So the next time David Cameron comes out with “In a civilised society, knowing you’re going to have a decent state pension is a really powerful thing,” consider what the real message is. 

 

Quite a whiff of political calculation pushing the moral compass concerning the need to grant people “dignity and security in their old age” me thinks.

 

With the General Election fast approaching expect all sense of dignity, morality and basic common sense to go out of the window.

 

Has it ever been otherwise?

New Year’s Dishonour List

Many were honoured and many were thoroughly deserved for a life of dedication to their craft in the New Year’s Honours List.

 

But a couple caught my eye for a little closer scrutiny……

 

#1 Alan Parker

 

An award went to one of Britain's most powerful spin doctors – Alan Parker. It just so happened that he holidayed with Cameron……oh and he is a businessman whose company donated to George Osborne's local party……and he is now the Conservatives' new business ambassador.

 

 

#2 Raffaele Claudio Carbosiero

 

He has styled the hair of the rich and famous for decades and is known for cutting the prime minister's hair with a left, rather than right-hand, parting since 2010. Two points: firstly, would it have been awarded if he didn’t cut the prime minister’s hair? Since when is "services to hairdressing" even a category for an award?

 

 

Two great examples of devaluing the honours when it appears the main criteria is who you know in Westminster rather than a life of sacrifice, giving and excellence for a greater good.

 

Shameful really.  

Accounting Magic

I would forgive you for thinking that the Government never seems to get value for money from privatisations or the sale of investments it holds. You need only look at the runaway share price of Royal Mail to understand that someone’s miscalculation of the launch price cost us……significantly.

 

Which leaves me intrigued on our 6% stake in Lloyds Banking Group that the Government sold on our behalf…..and for dramatic effect…… ‘our stake’ that was sold on ‘our behalf’.

 

At face value, the £3.2 billion raised from the sale represents a £61 million profit since 2008. And in case you were wondering, that is a 1.9% return. Now I appreciate that is not a great return over 5 years but it is a near miracle we didn’t lose money.

 

Or did we?

 

Wipe the make-up off that ‘face value’ and the real figures are exposed……the National Audit Office (they regulate all Government income / expenditure) have stated that there was a loss on the sale of £230 million (7%). This is all due to the interest costs for the Treasury of borrowing money to buy the stake in the first place.

 

Those costs are real, very real.

 

The next time your MP has an open surgery you might want to ask why the £230,000,000 loss has to be made up by us through higher taxes and / or a reduction in public services.

 

Or we could just simply let it continue to happen.

 

Just a thought.