How you pay for the greed of others

Some years ago I wrote about the true life of slippery Syd Gottfried, who was a master con man. I tried not to glamorise Syd’s escapades in my book; there is nothing glamorous about cheating people. I did find the process interesting and revealing, and from time to time entertaining as well.

I did learn, from talking to Syd extensively two things. First, there is a fine but very blurred line between what is legitimate in business and what is illegal. Secondly, it is not so much the trusting people who are liable to be conned, but the greedy people. The chief device of all con men is to prey on greed, which exists in many people as the force that drives them and in likewise in many companies. It therefore comes as no surprise that some of the world’s largest banks and hedge funds have been apparently conned out of $50 million. Continue reading

Windfall taxes on energy companies

Should the government impose windfall taxes in the energy companies?

The Business Secretary, John Hutton, will not answer the question save as to say that the government is looking at all the options. That is a hint that the windfall tax may be a possibility. The idea that is being strung up the flagpole to see if anyone will salute it, is that the energy companies – the electricity and gas suppliers and the oil companies should be relieved of some of their record profits by the taxman, who would, Robin Hood like, pay them over to people who cannot afford soaring energy bills. Continue reading

Why Zero Carbon Homes will cause serious environmental damage

On 9th January 2007 Yvette Cooper, made a speech to the House Builders Federation. She talked about higher standards for new homes and mentioned the need for better insulation. She then announced that all new homes within ten years must be zero carbon, and thus it seems that the concept of zero carbon homes was brought into being.

Like motherhood and apple pie it sounds all very splendid and praiseworthy but unlike motherhood and apple pie it suffers no one knowing what Ms Cooper actually meant by this concept and I am sure that she herself did not know what she meant because here we all are, nearly a year and a half later, when government civil servants are still trying to “discover” what the definition of a zero carbon home comprises. Continue reading

Investment turmoil and solar systems – the true return on capital

The financial markets are in turmoil. Some banks are going through difficult times, as recent happenings at the Northern Rock and Bear Sterns demonstrate. Some analysts fear that the worse is yet to come as US dollar rates fall and interest rates throughout the world are turning down, producing lower returns on investment.

If you have money on the stock exchange you will find that although most stocks are still producing income, the capital value of them is declining as markets fear that the financial turmoil will hit equities. Property values are falling. Turmoil in the world financial markets causes turmoil in the economies of individuals. Your savings, with which you hoped to provide for your old age, are growing less valuable, your house is getting less valuable, and your income from your savings is declining and in some cases moving into negative areas.  It can be hard to figure out what you should do.  Continue reading

Green Taxes, reports gathering dust, and polluters that should pay

I decided in October last year to “blog” about the environment and have posted articles almost every day since then. I called this “Ideas for the Environment” because ideas about improving life sometimes turn into real improvements and without the ideas there will be no improvements.  Continue reading

Northern Rock and Iraq – using the same argument to deflect examination

Alistair Darling has got us in a big mess. Somehow, we all have invested over £2,000 each in the Northern Rock Bank, without knowing it. Mr Darling together with Gordon Brown decided to bail out the failed bank with a defective business plan. It was such a shame that the government appointed regulators operating under a government designed structure never noticed the business plan of the Northern Rock was so defective until it was too late.  

Now Mr Darling wants us to concentrate on how he can get the best value for our investment in the Northern Rock, rather than carp on about how we got into the mess in the first place. That argument is identical to Tony Blair’s argument about invading Iraq when he found out for certain that there were no weapons of mass destruction in Iraq. Never mind the cock up in the past, let us make the best for the future.

That argument doesn’t wash, either about Iraq or about the Northern Rock.  Of course we should make the best of a very bad job – no question about that. However, making the best of a bad job does not prevent us examining why we made such a mess up in the first place. What did Mr Darling and Mr Brown do wrong? Some say they dithered at crucial times; others say they failed to plan for this contingency; others say the bail out should not have extended to investors, shareholders and employees, but be limited to deposit holders.

Perhaps the decision makers never quite had the intellectual capacity to understand the solution. The truth probably lies as a complex combination of all four things. 

Does Mr Darling have the brains to get us out of the mess?  None of the very large banks has shown any sign of wanting to get involved. The people who are now circling the corpse of the Northern Rock – chaps like Richard Branson – are not doing so in order to bail out the taxpayer or the government but in the hope of making a fat profit unwritten by the taxpayer.

For them it would be a one way bet with no downside. In these circumstances I would prefer for the bank to be nationalised, so that the taxpayer had a chance of making some money on the £60 billion it has risked in this venture. 

It is interesting how Alistair Darling can find that the country can afford £60 billion to save a bank with a failed business plan after a weekend’s thought, but cannot after lengthy reports and enquiries find 10% of that sum to save the planet by investing in renewables. Or even 5%. Or even 1%.

Darling has bought for us what we did not want to buy, paid more than he should have paid and is now pretending that we only need to discuss how to palm off the purchase on someone else at a cut price. 

As I write Gordon Brown is in India with business leaders (including Richard Branson) to rustle up some orders for the United Kingdom’s economy. The Prime Minister is helping these business leaders get some good business. I am desperately trying it find out how I can get the Prime Minister to help rustle up some orders for my business. I know that there is one ex Prime Minister around who is up for hire, but Genersys cannot afford his fees.

Microgeneration and Northern Rock? Darling, it’s between a northern rock and a hard place

Gordon Brown has finally admitted it. He has not ruled out nationalising the Northern Rock. When you walk down a path putting one foot in front of another you should know where the path leads. When he and his chum Alistair Darling decided to rescue the bank, rather than the money of depositors of the bank, he started on the road that inevitably leads to nationalisation, whether he admits it or not. 

The bank is as good as nationalised now. Lots of people and institutions would like to get their hands on (sorry, buy) some of the bank’s good assets, especially if they are going for a song. No-one wants to underwrite the bank’s bad assets at any price, except Mr Darling and Mr Brown. We taxpayers have now pumped £57 billion into the bank, (£57,000,000,000) by way of guarantees and real cash and the only benefit has been to help confidence in the banking system, (although that is debatable), save a few jobs in the North East, and protect Nortehrn Rock shareholders and speculators.  He could have done all of that spending a lot less money by simply underwriting the ordinary depositors’ money and letting the rest take their chances.

If Mr Darling has a spare £57 billion pounds it would come in mighty handy in restructuring our country’s energy system so that we used less fossil fuel and had a great deal more microgeneration. We could have also cleaned up the coal burning power stations with smoke washing facilities, sequestrated carbon, insulated every home to high standards, and still had plenty of change. 

We could have also taken a few million and restructured the Low Carbon Building Programme. Under it today no one is bothering to apply for the £400 grant that you can get towards thermal solar panels because the grant is pitched too low and there is a rather tortuous set of conditions you have to adhere to before you get the money; none of these conditions relate in any way to solar water heating.

You can only get the grant if your home is “holistic” whatever that means. 

The money assigned for helping householders with all microgeneration technologies for the three years ended June 2008 was only £18.7 million – less than one third of one percent of the money used to bail out the Northern Rock. Expressed as a figure it is less than 0.33% of £57,000,000,000.  It is interesting to remember that the grants for microgeneration were conceived by Mr Darling when he was at the Department of Trade and Industry under a scheme called the Low Carbon Buildings Programme. All the failings of this scheme became well known before Mr Darling was promoted to Chancellor of the Exchequer, but despite my efforts and those of many others in the microgeneration industry, Mr Darling would not change the defects, denying, through his junior Minister, Lord Truscott (who?) that any defects existed. 

Mr Darling clearly has a talent for this kind of mess, as he showed with the Low Carbon Building Programme and now that he has been promoted he has made another mess on a much grander scale. 

While all the money used for the Northern Rock is being committed and more will no doubt have to be spent, so far less than a third of the microgeneration grants have been spent – a paltry £5.3 million. If the present rate of take up continues when the scheme ends in seven months time the government will have about £12 million spare unspent microgeneration money, which they could inject into the Northern Rock. That should be of immense comfort to the Bank’s shareholders and commercial depositors, but cold comfort to the planet.