Martin Vander Weyer

There’s always another disaster waiting to happen – so keep your eye on ETFs If we learned anything from the recent financial crisis, it is that when a thing looks too good to be true, it is. If a sector is attracting frenzied investor attention and pundits say spectacular growth must continue, it is surely heading for trouble — not next week, perhaps, but soon enough to allow a minority of sceptics to say ‘I told you so’. In markets, good ideas pursued to extremes mutate into disasters and, at any given moment, someone somewhere is concocting the next one. And so I draw your attention to Exchange Traded Funds, or ETFs.

Another rail report chugs past like an empty freight train bound for the sidings Sir Roy McNulty’s report on the state of Britain’s railways chugged by last week like one of those unmarked freight trains that sometimes pass through stations. ‘Stand well back from the platform,’ says the announcer, making us wonder whether the wagons are full of explosives. But such is the inefficiency of our rail system that they’re more likely to be being shunted empty from one siding to another — which is what will happen to McNulty’s ‘Rail Value For Money Study’ if unions and other vested interests have their way.

Another tale of the Great Seducer and my tip for the woman to succeed him When I was young I knew a man whose opening gambit with any pretty girl was, ‘Hello, shall we go straight to bed?’ He reckoned one in 20 said yes, so if he asked the question 20 times a day, he would never be lonely. All accounts of Dominique Strauss-Kahn, the IMF chief and would-be French presidential candidate who has been charged with sexually assaulting a New York hotel chambermaid, suggest a similar approach. In the late 1990s — during the tenure of ‘DSK’ as France’s minister of finance and not long after his third marriage — an attractive female journalist of my acquaintance was sent to interview him at the French embassy in London.

The latest mis-selling scandal is one more symptom of a deeper problem The payment protection insurance (PPI) scandal is, by common consensus, the worst case of financial mis-selling until the next one. These policies were foisted by banks on personal borrowers, supposedly to cover repayments if they fell ill or lost their jobs or encountered some other misfortune. But in many cases borrowers were not aware they were being charged for the cover, or were told falsely that they were obliged to buy it. If they were self-employed or too old, they would never have been able to claim on it anyway.

Warren Buffett isn’t always right – but he’s a $47 billion advertisement for optimism The legendary investor Warren Buffett has taken more flak than seems necessary for his lapse of judgment over his former lieutenant David Sokol, who bought shares in a company called Lubrizol before recommending it to Buffett as an acquisition for the Berkshire Hathaway conglomerate. Having been tipped as a potential successor if 80-year-old Buffett ever retires from running Berkshire, Sokol resigned abruptly in March. Buffett’s comment at the time, ‘Neither Dave nor I feel his Lubrizol purchases were in any way unlawful’, was widely regarded as inadequate.

Glencore’s partners are not offering equityto you and me out of a sense of charity We’re all going to be investors in Glencore, whether we like it or not. If the flotation of this giant commodity and mining group goes ahead next month at the valuation currently indicated, it will leap straight into the upper reaches of the FTSE 100 — something that has not happened to any new share since the big privatisations of the 1980s. That means every major pension fund, and all those tracker funds and funds of funds that wealth managers love to stuff their clients into, will end up owning little bits of Glencore.

Vickers’s half-time score: not half as badas bankers feared or bashers hoped ‘Not half as bad as it might have been,’ was the reaction of the first banker I spoke to on Monday about the interim report of Sir John Vickers’s Independent Commission on Banking. ‘And forcing Lloyds to sell off a few more branches won’t do a damned thing to promote competition.’ ‘Not half as bad’ for bankers seems to imply not half as good as it might have been for customers. The increased and ring-fenced capital requirements for retail banking mean borrowers could be charged more for loans, and are unlikely to be offered greater choice.

Sunny spells, icy showers and an inflationary wind blowing from America Daffodils everywhere and the FTSE is back around 6,000. Builders are busy after the frozen winter, it’s ‘business as usual’ again in financial services, and although manufacturing lost momentum in March — exports remained strong, but nervous consumers depressed domestic demand — industry is generally perky. The British Chambers of Commerce expect first-quarter growth of 0.6 per cent or better, reversing the previous 0.5 per fall — and although recovery could be sluggish for the rest of the year, the trend will be in the right direction. So there’s room for optimism, of a cautious kind.

Farewell to a charismatic old bruiser who never threw in the towel George Walker, the former boxer, gangster’s minder and ‘leisure tycoon’ who died last week, was a persuader — both in the sense that he could be, as he once told me, ‘a bit rough with people’, and in the sense that if he decided to charm you, he was hard to resist. Fortunately, I fell into the second category. I got to know him during the period between his ousting as chief executive of Brent Walker, the conglomerate of pubs, betting shops, yacht marinas and other forms of amusement he built in the Eighties boom on a mountain of debt, and his trial on fraud charges in 1994.

Next, Osborne should tackle the plague of charity shops depressing our high streets The dramatic form of the modern, Brownian Budget speech requires a headline-grabber at the end to deflect commentators from analysis of the statistical soup and re-announced tax-tinkering that went before. But the politics of being ‘all in it together’ means that the rabbit in George Osborne’s hat was never going to be abolition of the 50 per cent top rate of income tax — and he made that pretty clear long before he got up to speak. So if you were planning to spend this weekend restocking your cellar with first-growth clarets (following Christopher Silvester’s excellent advice last week) on the strength of a sudden shrinking of your tax bill, you were misguided.

Stoical and fatalistic, the Japanesenational character will rise to the challenge When I was a banker in Tokyo in the mid 1980s, it was my occasional pleasant task to tour the provinces visiting local banks which kept sterling accounts in London. I had nothing to sell, but my colleagues and I carried bags full of golf balls to hand over as gifts at each stop, where after a ritually polite meeting with the bank’s president, we would be treated to an evening of karaoke and misowari (weak, icy whisky and water) by whichever of his underlings spoke the most English. I have fond memories of Fukuoka in the south, Kanazawa during cherry- blossom season and frozen Aomori in the north, where the karaoke songbooks were printed in Russian.

Has Mervyn lost touch with reality? No, but the City has lost its moral compass Mervyn King’s interview with Charles Moore in the Daily Telegraph, in which the governor of the Bank of England accused the financial sector of exploiting gullible customers, gambling with other people’s money, lacking a moral compass, paying themselves excessively and relying on taxpayer bailouts when it all goes wrong, elicited some strong reactions. One unnamed City figure said it was ‘not correct’ for the governor to make it quite so clear that ‘he doesn’t like bankers’; another called him ‘an embittered old man with no appreciation of reality’.

Freezing tyrants’ assets is easy, but how much will we send back to Tripoli? ‘Queen freezes Gaddafi family assets’ says a headline. That’ll teach the unhinged Libyan dictator to compare himself to our blessed monarch, as he did in one of his recent rants. But for all the spin about an emergency Privy Council meeting at Windsor Castle on Sunday (I’m imagining the Duke of Edinburgh popping in to say, ‘Do hurry up, dear, Top Gear’s started’), I’ll be interested to see just how much loot is eventually liberated from London accounts and returned to whoever forms a legitimate new government in Tripoli. Precedents are not encouraging. Our bankers remain more reluctant even than the Swiss to open suspect safe-deposit boxes.

More women in the boardroom? Never mind the equality, watch the performance Successful businesswomen may scoff at the proposal of quotas for women in boardrooms — and many men will dismiss it as Euro-correctness gone mad (see Matthew Lynn, page 17). But I suggest that anyone who hopes to collect a private pension should welcome the idea, for purely selfish reasons. A report by former trade minister Lord Davies of Abersoch this week was expected to call for ‘voluntary targets’ to bring the proportion of women directors of FTSE 350 companies up to one in four by 2015, compared to current ratios of one in eight for the top hundred companies and one in 13 for the next 250.

Another reason to cut bankers’ pay: the softer the product, the easier the job Is it harder to run a country or a global company? Variations of this dinner- party gambit cropped up wherever I went last week, offering a way of drawing together half a dozen business stories and political arguments. So here’s this week’s Any Other Business competition. Place the following in descending order of the difficulty of their jobs: David Cameron, George Osborne, Bob Dudley, Stephen Elop, Marius Kloppers, António Horta-Osório and Gerald Jones. Bob Dudley is the American who was recently promoted to chief executive of BP and is now dug in on the Russian front.

Which would you rather save – your local library or a County Hall paper-pusher? What a curious double life I lead. Half the week I’m your disembodied commentator from the world of high finance — my anonymity protected, as I truffle for City gossip, by a portrait drawing that (I’m told) doesn’t look like me at all. For the other half, I’m one of the north of England’s most hyperactive citizens, blundering like Flashman from one battlefield of the cuts debate to the next. Last week, for example, I was discussing library closures on Monday, police manpower reductions on Tuesday, the crunch in higher education on Wednesday, and doomsday scenarios for the arts on Thursday and Friday.

Privatising forests must be a sensible policy if so many celebs are against it The more passionate the outcry against the government’s plan to privatise its English forestry estate, the more I feel the urge to cash in my meagre investments and bid for one of the forests in question myself. For a start, any policy which attracts the opposition of Tracey Emin, Ken Livingstone and Dame Vivienne Westwood is likely, on close examination, to be entirely sensible. And a holding of woodland is, after all, the perfect answer to my twin concerns for the immediate future, expressed here last month, of inflation and social disorder.

Interim findings from my Really Independent Commission on banking reform The Warden of All Souls, Sir John Vickers, has revealed the outlines of what he thinks about banking reform, so perhaps the Warden of Any Other Business — that’s me — should do likewise. Vickers, a former Bank of England economist, is chairman of the Independent Commission on Banking, which will publish interim findings in April and conclusions in September. Its objective is to recommend ways to stabilise the banking system and make it more competitive, while reassuring savers that their money is safe without implicit or explicit government guarantee.

Rising petrol prices and the death of Nigel increase my sense of foreboding I returned from a New Year expedition to the Dordogne laden with wine, walnuts and a deep sense of foreboding — not provoked by the mood of rural France, which felt unchangingly placid, but by what I’ve been reading and hearing about Britain and the rest of the world. The fund manager Jonathan Ruffer convinced me some time ago that inflation would be the next big peril. With retail prices now rising three times faster than pay, petrol dearer by the day, and food and clothing following the upward spike of commodity markets, the monster is upon us.