Any other business

Saturday

Martin Vander Weyer

Bob Diamond’s face is a lot less unacceptable than Gordon Brown’s

Martin Vander Weyer's Any Other Business Bob Diamond, the generously remunerated American president of Barclays, has been put through his paces so often in this column that we really ought to give him his own treadmill in the Any Other Business penthouse gym. But I make no apology for mentioning him again — and this time, instead of making him my comedy stooge, I’m going to stand up for him. He came under attack last week from both George Osborne (‘It really beggars belief that two years after we all bailed them out, we get the Barclays bank chief paying himself £63 million’) and Lord Mandelson (‘If you look at Bob Diamond, who took £63 million in pay — that to me is the unacceptable face of banking. He hasn’t earned that money...

Toby Young

The outcome of this election depends on which man can seem more middle-class

Curious choice of words Gordon Brown used to describe himself when firing the starting gun for the general election. ‘I come from an ordinary middle-class family,’ he said. Until recently, ‘ordinary’ was used by Labour politicians as a euphemism for ‘working class’ and was often a way of differentiating themselves from their Conservative opponents who were, by implication, upper class. That was the tribal divide in British politics — never an accurate reflection of where each party drew its support, obviously, but a convenient social stereotype nonetheless. But here was Gordon Brown appealing to this stereotype while, at the same time, muddying the waters by claiming to be ‘middle class’. What’s going on?

Saturday

Alexander Chancellor

After the Anna Nicole Smith opera, whose turn is it next? David Beckham’s?

So Anna Nicole Smith — the poor, talentless Texan girl who by virtue of the most enormous bosom became a stripper in a Houston clip joint and married one of its regular customers, a wheelchair-bound oil billionaire 63 years her senior — is to be the subject of a new opera that will receive its first performance at the Royal Opera House next year. The opera is an all-British effort, with music by Mark-Anthony Turnage and libretto by Richard Thomas, one of the creators of Jerry Springer: The Opera. Springer, widely attacked as blasphemous, was a sprightly satire on American trash culture, which ended with God and the Devil battling over the soul of the famous talk show host.

Martin Vander Weyer

A happy thought for Easter travellers: farewell Heathrow, hello Boris Island

Martin Vander Weyer's Any Other Business It’s never easy to know what the Mayor of London really thinks — as many of us at The Spectator can attest from weekly experience during his benignly idiosyncratic editorship. His opposition to a third runway at Heathrow, and his espousal of an apparently fantastical alternative scheme to move the entire airport to a pair of man-made islands in the Thames estuary, 60 miles from central London, might just be seat-of-the-pants Boris, blustering his way out of an awkward corner. You can see why he came out against the third runway: it’s Labour policy, and it could lose him votes under the flight path in 2012.

Saturday

Martin Vander Weyer

Do the big brothers really want to topple Brown? Or do they just hate each other?

Martin Vander Weyer's Any Other Business Who’s the Manchurian candidate? That’s what I want to know. Even Tony Woodley, the hatchet-chinned joint general secretary of the Unite union, who has pursued a decade-long mission to cripple the competitiveness of the British airline industry, must realise that the timing of the BA cabin-crew strike is catastrophic for Labour’s election prospects. And if dear old Bob Crow, the railwaymen’s leader and the last Leninist in British public life, wades in to bring the trains to a halt for Easter — the week before the election is likely to be called — it will be game over for Gordon before he’s even had time to pin a Unite-funded rosette to his lapel.

Saturday

Martin Vander Weyer

The ultimate financial disappearing trick: Lehman Bros wasn’t a real business at all

Martin Vander Weyer's Any Other Business No sooner do I confess (6 March) to having dabbled in the dark art of off-balance-sheet finance, than along comes an official report into the 2008 collapse of Lehman Brothers, the Wall Street firm led by the monstrous Dick Fuld, that reveals the mother of all financial disappearing tricks. This was a series of transactions codenamed ‘Repo 105’, under the advice of the eminent City law firm Linklaters and without demur from Lehman’s auditors Ernst & Young, designed to exploit a disparity between US and UK law that allowed $50 billion of Lehman liabilities to pretend they weren’t there.

Saturday

Martin Vander Weyer

Our man in the car park contemplates the grotesqueries of ‘the beautiful game’

Martin Vander Weyer's Any Other Business A dark hour imprisoned in a gridlocked multi-storey car park close to Old Trafford on a home-match evening gave me an opportunity to ponder what was once called ‘the beautiful game’. I was a Chelsea fan in my youth — the heroic era of Cooke, Wilkins and Droy — but I’m irritated by the modern fashion for corporate chiefs to declare their club allegiances in the interest of looking blokeish.

Jonathan Davis

Is now the time to buy back into China?

One tried and tested rule in investment is that the bigger and more widely shared the worry, the less likely it is to be realised. Remember Y2K and the Sars epidemic? Both produced warnings of global disaster. Neither turned out to be anything like the threat that doomsters had predicted. Contrast that with the subprime mortgage crisis, whose dimensions only became widely apparent some time after the crisis had already broken. In the years when investors should have been worrying about uncontrolled bank lending, most were too busy loading up on anything they could buy with cheap credit to notice the impending disaster that their own insouciance was helping to bring about. On this measure, if nothing else, investors looking at China today should not have much to worry about.

Jasmine Birtles

Cult collectibles from Barbie to Gaga

Barbie and Dr Who are perhaps not the first names that come to mind if you’re looking for things to collect for profit. Barbie and Dr Who are perhaps not the first names that come to mind if you’re looking for things to collect for profit. They’re hardly van Gogh, but they have been commanding headline-grabbing prices at auction for long enough now to be interesting to serious investors. The new collectibles say little about art — although they belong very much to the world of design. They are all about icons, dreams, personalities, popular culture and the fixations of youth. Toys, comics and gadgets from as recently as the 1980s and 1990s are changing hands for staggering amounts on eBay and speciality websites and, in some cases, in traditional auction houses.

Dominic Midgley

Poor prospects in the sell-us-your-gold rush

The permatanned television ‘entertainer’ Dale Winton is hosting an unintentionally hilarious series of commercials on daytime television these days. Using the same format as The Antiques Roadshow, the ads for something called CashMyGold show members of the public sitting round a table with Winton and an ‘expert’ who values their gold trinkets. They beam in delight when the jeweller informs them what he thinks the bling is worth. One of them even says: ‘That’s a lot more than I thought.’ On the face of it, these ads are very convincing. After all, the gold price at the moment is indeed higher than it has been for years. At the beginning of this month, gold reached new record highs of more than £750 an ounce.

Ian Cowie

Blue-chip opportunities despite euro turmoil

Ian Cowie says some of the Continent’s best companies are offering mouthwatering dividend yields these days Pity the poor estate agents. Now there’s a phrase you don’t see very often. Barely had they begun to market Spanish villas and French gîtes as bargains because of the weak euro, than the pound began its precipitous decline. Sterling-denominated investors may be tempted to keep their cash close to home until exchange-rate fluctuations become much less exciting. In the case of continental real estate, that would seem wise — especially when the Economist calculates that house prices in Spain remain 60 per cent higher than they should be relative to long-term average rental yields.

Saturday

Martin Vander Weyer

Trust in a market where it pays to deceive?

Martin Vander Weyer's Any Other Business I can’t claim to have invented the off-balance-sheet sleight-of-hand used by the Greek government, under the guidance of Goldman Sachs, to beggar itself so spectacularly. But I was certainly a pioneer in the field. Long ago, at Barclays, I devised a scheme to help a famous brewery (now, needless to say, a ‘hotel and leisure group’ operating under a different name) to deceive investors and analysts into believing its debts were smaller than they really were.

Saturday

Martin Vander Weyer

A VAT rise may be no laughing matter, but it’s better than the alternatives

Martin Vander Weyer's Any Other Business And so to VAT — an opening that I realise sounds about as enticing as a job ad for a shorthand typist in the Prime Minister’s office. Frankly, I doubt even Bob Monkhouse had a decent gag about VAT in his repertoire. But like many things that are not funny — Jonathan Ross hosting the Bafta awards, for example — tax on consumption is an inescapable fact of modern life. So, having ducked the topic last week in favour of high-class name- dropping, I’ll do my best this week, prompted by a Conservative statement that ‘We have absolutely no plans to increase VAT’. That means you may be pretty sure they have: in modern politics, ‘absolutely no plans...

Saturday

Martin Vander Weyer

If you don’t want to be treated as crooks, stop mugging your high-street customers here please

Martin Vander Weyer's Any Other Business ‘I don’t want to be treated like a criminal,’ a senior Barclays trader told me recently, in a slightly menacing European accent. That gives you a clue that he was not Bob Diamond, the bank’s American president, or John Varley, its very English chief executive, who have both foregone cash bonuses for 2009 despite record profits of £11.6 billion. No, my acquaintance will certainly have shared in the Barclays Capital bonus-pot, so he should be feeling more like a Euro-lottery winner than a prisoner in the stocks.

Saturday

Richard Northedge

‘Read this and weep’: lessons not learned from Slater Walker

Richard Northedge has unearthed confidential papers that reveal the Bank of England and the Treasury at loggerheads over a banking collapse 35 years ago  In the permanently uneasy truce between Threadneedle Street and Whitehall, Bank of England governor Mervyn King has never been shy of publicly criticising the Treasury. But confidential files on a banking crisis of 35 years ago show that private comments between the two institutions can be even more caustic. A civil servant’s handwritten note on a letter from the Bank during the Slater Walker crisis in 1975 says, ‘Read this and weep.’ His boss scribbles back: ‘I have read — and spat blood at this unjustified complacency.

Dominic Prince

Mutual satisfaction

I don’t know about you, but I get infuriated by insurance. I don’t know about you, but I get infuriated by insurance. Motor insurance, household insurance, pet insurance. Some, like cover for your car, you have to have by law. Other stuff, like cover for your cat or the contents of your house, you don’t. A great deal of insurance is unnecessary and costly. Is it worth insuring an old banger comprehensively? No. Is it worth insuring paintings? Probably not: nicked pictures have little re-sale value and your average burglar wouldn’t know a Van Gogh from your great-aunt’s holiday daub anyway. Each year when the premiums are due, I shudder at the relentless upward march of renewal costs.

Dominic Midgley

Billions more mouths to feed

Food security is the new energy security. So says Susan Payne, chief executive of Emergent Asset Management, a Surrey-based company which claims to run the biggest agricultural fund in Africa following the launch of its first fund less than 18 months ago. Payne, a Canadian who cut her teeth as an emerging-markets expert first at JPMorgan and then at Goldman Sachs, attracts investors by conjuring up the Malthusian devil. The world’s population is set to grow by 2 billion to 9.1 billion over the next 40 years; feeding the children of tomorrow will require a 50 per cent increase in farm output by 2025 and a doubling by 2050. Meanwhile, the price of staple crops has risen by more than 80 per cent since 2005, pushing 100 million people into poverty, according to the World Bank.

Elliot Wilson

Gallantry is a finite resource

Few individuals better personify the eccentric, combative and rarefied world of medal collecting than Michael Ashcroft, the businessman and controversially deep-pocketed Tory party eminence grise. A self-made man whose fortune is estimated by the Sunday Times at £1.1 billion — more than the entire net worth of Belize, the tiny Central American state he calls home — Lord Ashcroft has also carved out a near-monopoly of a very finite resource: the Victoria Cross. Since being introduced in 1856 at the tail end of the Crimean War, just 1,356 VCs have been awarded. Most are in public collections, notably that of London’s Imperial War Museum. Those that are not are most likely to be in the hands of Lord Ashcroft.

Martin Vander Weyer

The euro may be heading for cataclysm, but that’s no reason to be rude about pigs

Martin Vander Weyer's Any Other Business I was sorry to hear Gillian Tett, the FT’s fragrant financial commentator, calling the eurozone’s southern members ‘pigs’ last week. In sunnier times, Portugal, Italy, Greece and Spain were referred to collectively as ‘Club Med’, but lately the acronym of their initial letters has come into common usage, with connotations obviously intended to be negative. It’s true that Greece and Portugal in particular are deep in the porker-manure, with the bond markets repricing their debt (Greek government bonds currently yield more than double those of Germany) in a way that suggests they may soon be unable to finance their spiralling deficits at all.

Saturday

Martin Vander Weyer

Smart management might have averted the banking crisis, not barbed-wire fences

Martin Vander Weyer's Any Other Business Will I join the ticker-tape parade to welcome back Senator Carter Glass of Virginia and Congressman Henry B. Steagall of Alabama? Well, I might lurk in the crowd, but I certainly won’t be cheering. These venerable legislators sponsored the US Banking Act of 1933 which built a wall between securities trading and deposit-taking that remained in place until 1999. To use the labels invented by the economist John Kay, it separated the ‘casino’ of Wall Street from the ‘utility’ of retail banking on Main Street.