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Archive for November 5th, 2009

Bonjour Willkommen bienvenue… as we say down on the River Medway….. but in fact… we say Hiya!  You alright?… which I quite like… and have found myself saying as I greet the taxi driver who whisks me from the Staterooms-on-Sea to Chatham Railway station.

It is wonderfully ironic that the Tories, who have some very strange bedfellows in European politics, are being pilloried for their ‘pathetic’ policies on Europe and today Pravda appears to agree with them with an article written by one Hans Vogel entitled Twenty Years after the Fall of the Berlin Wall, the EU is a Reincarnation of the Former Soviet Union”

The irony was just too much for me – the former soviet Russia agreeing with the Tories….. who appear to be running their political marketing propaganda with the ineptitude and efficiency of an old soviet commune farm –  bit of an Eton Mess… as the saying goes…..that I just had to go an cook something particularly British (although I did use a good robust French red)… Steak Pie with puff pastry…. and it was good!

Politics.co.uk thinks Miliband is headed off to Europe as Great High Executioner on Foreign Policy… and that Lord Mandelbrot will soon be de-lorded to allow him to stand for parliament, look after things for one term and then hand back the reins of power to Miliband when he tires of being the Foreign Policy Shah of the new European super state. Curiously Miliband says he doesn’t want the job… which can only mean one thing, some say… that he is hyperventilating at the prospect.  After all who wants to be ‘Shadow’ Foreign Secretary…. ?

Losing our right to reject goods?  A right that has been with us since…. Time Immemorial?

The trouble with Europe…. is the Europeans….  who think so very differently than we do; who are used to centralised state control, who seem to prefer a strong state and over regulation – which they then promptly appear to ignore.

An example of European thinking is the Euro plan to abolish the right to reject goods under ss13,14 Sale of Goods Act 1979 (and, presumably at common law in Contract) in favour of a requirement to accept a replacement or repair.  Bugger that…. our Contract Law works, it is absolutist in nature, unfairly fair at times – but at least business people know where they stand – and the European laws on Contract are a bit… well…. European and wishy washy..

The Times takes up the story…

The right of consumers to reject faulty goods must be retained in the UK despite European plans to abolish it, legal watchdogs said yesterday. The Law Commissions of England and Wales, and Scotland, have thrown their weight behind retaining the right which consumers have exercised for more than 200 years. There is overwhelming support among both the public and businesses for keeping the right to reject faulty goods – currently the subject of 10 million complaints a year. But the European Commission has proposed a new directive on consumer rights which, if adopted, would force the UK to abolish the right to reject in favour of a right to a repair or replacement.

I am, of course, a Contract lawyer, albeit academic… but I am a militant one…. and our Law Commission is right to throw weight behind the issue and kick this latest eEuro fuck up into the river.

Good grief… I like Europe… but the Frenchies and others may just have crossed my line in the sand with this proposal.  Vive La Revolution…. Liberté, Egalité, Fraternité… as we say down on the Medway.

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Eric Turkewitz writes a ‘mean’ Blawg Review… and I mean that in the Cowboy Western ‘mean an ornery’ sense…of the word I heard as a child when I was transfixed by Rawhide, Gunsmoke et al.  From a Marathon themed Blawg Review, written by him some time back and which was superb, to the dark depths of the ghouls…. of Halloween – a US festival and calendar import we Brits are taking to our hearts… perhaps even more than Guy Fawkes night.

As ever, Eric Turkewitz manages to cover a wide range of blogs in a highly readable way…. as I am always pleased to say to friends…. every day is Halloween for me…. believe me… I don’t need the make up.

Go and read Eric’s excellent Blawg Review # 236. It has been a strange old week and I am a bit behind on the reading….

 

PS… while we are on the subject of US blogs… I see that the US prof who was suing Above The Law has decided against ….

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ARRIVEDERCI LONDRA!

ARRIVEDERCI LONDRA!
by Tonto Papadopoulos

A grave and present threat looms on the horizon: one that could wilt the economic life of The City, London, the entire UK – maybe the World.

You’ve heard it again and again, and you’ve been warned, “If banks don’t hand out billions in bonuses, talent will migrate!”… leaving tumbleweeds blowing down Moorgate, and the rest of Britain.

Ladies and gentlemen, this is what’s known as ‘talking your own book’. Do groups like Goldman Sachs gee the market with purple commentary to try to make themselves and their product seem more attractive, and more valuable? Do they talk their own book?

You bet they do – and so what.

Talking your own book has been part of human behaviour since the first enterprising caveman collected an inventory of rocks. The financial markets are a poker game not a tea dance. If other speculators, fund managers, government, the media, etc. are dumb enough to believe slick table talk from Goldman et alia, tough beans on them.

Banking “talent” threatening to leave London sounds more like the hollow demands of a not-very-attractive gold-digging spouse, “You wanna keep getting some of this, Frank?… You know what to do.”  As long as the rewards are consented to and  mutual who am I to argue with arrangements between two adults, but in the case of the banks one has to wonder exactly what value shareholders are receiving in exchange for the huge sums lavished on human resources.

We’ll have a look at what all of this “talent” we might lose constitutes in a second article, right now the obvious question is, if they left London, where would all these financial rainmakers go?

Let’s imagine a worst case scenario. Let’s suppose for a mad cow second that The City and Wall Street suddenly became the bastions of prudence and responsibility they’re meant to be. What if bankers didn’t hand themselves thousands of multi-million bonuses this year. Or next? Or ever again? What then?  I know that nowadays this sounds like a crazy nightmare or some whacked out LSD trip, but  please bear with me.

If bonuses were pared back in London and New York there are several choices open to the bank employee looking for the supra-valuation of his own merit to which he’s become so accustomed. Let’s not forget these are mostly the same clever individuals who weren’t clever enough to see the well-telegraphed crunch in 2008, the very same people who helped to create the financial crisis. Well, any one of these brainiacs could go to Tokyo, Singapore, Shanghai, or Hong Kong; or closer to home, Paris, Frankfurt, and Milan beckon; or staying in the Anglosphere let’s not forget Dublin, or knocking on doors for surreal and over-the-top lucre in Sydney or Johannesburg. Assuming there’s the money and the will. That’s a big assumption.

Most of all London should be scared of Milan. Milan could easily lure tomorrow’s grabby financial cat, for the following good reasons (besides the fabulous shopping on Via Montenapoleone, one of the few temples of conspicuous spending that can actually compete with London financial districts): For one thing, in Italy you have a very supportive government. No one knows how to sweep Blunders & Corruption of Historic Proportion under the rug with flair, style, and perseverance – no one knows how to “take a lickin’ and keep on tickin’!” –  quite like the Berlusconi administration does.

Second, Italians’ appetite for flamboyant excess is legendary.

Third, if by any chance said legendary flamboyant excess were begrudged, in Italy banks can always fall back on a solid organised crime infrastructure staffed by individuals who fully appreciate the buccaneering self-interest displayed by opportunists and careerists. I mean this in the best possible way.

Come to think of it what stops the entire City from uprooting itself to an offshore oil platform  like a Bond movie villain might do? Most of the big banks have already extirpated themselves from The City to Canary Wharf. Decamping a few more miles away, or 6,000 miles away, is therefore not inconceivable.

But please, let’s THINK.

For all the whooping and hollering the fact is that regardless of big bonuses there is no substitute for London as the major international financial centre. There are many reasons, but the most obvious one (doh!) is the Time Zone between Tokyo and New York. The main reason London is a global hub today – just as it’s been since Roman times – is geographic.

The other lock London has on its role is that the language of the markets, just like the language of, say, international air traffic control – is English.

Oops, I forgot: having a large concentration of English-speakers means maybe also we see threats to London’s pre-eminence from canny Bangalore, East Timor, the wily Kingdom of Bhutan, and many parts of Sri Lanka? Maybe even Newcastle-upon-Tyne?

No. It takes more than just speaking English to create a financial centre. Apart from the geographic high ground that London has, it takes money, and it requires relationships.

Where is money concentrated in this world? The biggest user and abuser of capital is the US, a nation that requires at least $2 billion of inflows per day just to sustain the American Dream (and a couple of long distance wars). And with whom does the US have its closest relationship?

Britain serves as America’s aircraft carrier. This is a role that evolved during WWI, developed during WWII, flowered after Big Bang and the Thatcher/Reagan lovefest, and came into full, heartsick bloom with Tony Blair, “cementing our special relationship”.

Yes, the Continent is also between Tokyo and New York, but London’s time zone puts it one hour closer to US time, and there is no price on 60 minutes in modern financial markets. Paris and Frankfurt don’t ignore these facts about London’s hold as a global focus point for capital transactions, which is why they don’t bother playing the bonus game to the extent we do in the UK. They could offer the sky and the moon. Dubai has, and what has it achieved? Dubai… who?

Try as they may, no one can change geography, and altering the bonds of history can take centuries.  Bonuses or not, no prima donna will be saying arrivederi, Londra in a hurry. Anyway, based on the appalling failures that came to a head in 2008 we should all be wishing they would leave!

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