Sir Alexander Belloc-Brayne reflects on his new green diet, reviews the state of the British economy and contemplates strategic changes to the Model Portfolio.
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January 2007
Happy New Year – bah, humbug! I’m afraid that I am not in the best of moods after a New Year’s Day lunch of steamed rice, beets, carrots and spinach washed down with half a cup of cranberry juice. Another wholesome diet dreamed up by Nurse, no doubt. Can’t say that I’m short of medical advice these days, what with constant solicitation by the local NHS practitioner whose persistence and appoint-making skills would do credit to a Prodigal Life salesman. No hour is too inconvenient to attend me, save for evenings and weekends of course. Nurse detects the influence of a payment-by-performance GP contract and suggests that I tell the good physician to “heal” himself as she puts it.
Strictly entre nous, I suspect that that my new diet has less to do with my constitution than with Lady Belloc-Brayne’s determination to build upon the Department of the Environment, Food and Rural Affairs pet project in Kalasin, Thailand. The terms of this win-win deal are that the British taxpayer forks out £250,000 and the Siam Products food factory buries its methane-rich waste and offsets our Government’s dainty 600m mile annual global carbon footprint. “Methane is more harmful to the planet than carbon,” saith Her Ladyship. “It behoves us all to minimise personal emissions and every little bit helps!” Sic transit my “morning thunder”, one of life’s few complimentary pleasures.
You may gather that the green agenda is rampant chez Belloc-Brayne. Her Ladyship has twinned herself with Richmond-Upon-Thames where residential on-street parking permits are now priced by volume of vehicle emissions. Adieu to the hated (and coveted) 4X4 – driven to extinction by an ingenious green tax applied when the behemoth is at rest and not fouling our pristine English air. Her Ladyship has since submitted a proposal to the London Mayoral Office to foil what she calls “off-street tax evasion” by combining the Council Tax and the Congestion Charge. I sense an election winner. Why didn’t I think of that?
Turning to matters of political economy, I do declare that I am astounded by the profligacy of our Armed Forces when the public finances are labouring under the unintended consequences of payment-by-results and other hidden costs. Word is that demands for the delivery of more military hardware to the War-on-Terror front line have been rebuffed by the Ministry of Defence – and quite right too! Night vision and thermal imaging equipment? Put more carrots in the ration packs, say I. Cheaper and methane-neutral.
And call me an old fussbudget if you will, but I find it distinctly odd that the Olympics project is running 25% over the original cost estimates some five years in advance of the fun and Games. Mind you, who could possibly have foreseen a £250m premium on construction costs? Can’t blame the Culture Ministry, Games Committee or London Mayor for overlooking such an obscure tax as VAT in mid-sales pitch.
Some inevitable national angst over the latest 3% p.a. inflation number. Can’t see what the fuss is all about. All informed opinion from the PM to the Economic Secretary is in agreement that the roots of our present difficulties lie in the energy markets rather than with the Bank of England which has held private debt to 140% of disposable income and squeezed money supply growth to a 13% p.a. trickle by virtue of the occasional boot up the base rate. Nurse has given thanks for the vigilance of the Monetary Policy Committee by ordering her third consecutive zero-interest credit card. That’s the Weimar spirit!
Word from the Continent is that Slovenia is already reaping the benefits of its New Year’s Day euro entry, if the reported subsequent 28% rise in the price of a cup of coffee in downtown Ljubljana is any guide. No lack of bounce in the Eastern European tiger economies! Rather alarmed, though, by German moves to raise the European Constitution from the dead. All strength to Lords Pearson of Rannoch and Willoughby de Broke for rallying to the United Kingdom Independence Party in defence of our sovereignty. Her Ladyship tells me that the Willoughby de Broke title was created for one Robert Willoughby (de jure 9th Baron Latimer) of Broke, County Wiltshire in 1491. The way I see it, the de Broke suffix more likely alludes to the cost of taking the barony out of abeyance. Must ask His Lordship when next we meet.
Needless to say, we are still smarting over the Christmas Honours setback. Lady Belloc-Brayne prefers to speak of an oversight rather than a snub and suggests that we lodge ourselves in the official awareness by putting down a deposit on the Principality of Sealand before the Queen’s birthday or the Prime Minister’s farewell whichever comes earlier. Lord Belloc-Brayne of Sealand does have a fine ring to it, but at £65m Lord Belloc-Brayne de Bust might be more apposite.
There may be trouble ahead for the Model Portfolio now that the American Justice Department has set its gaze upon the British Aerospace plc/Al Yamamah cash-for-contracts arms deal. Word is that £1.1m of the £40bn at stake was invested in subsistence for Saudi negotiators in New York, Washington, Beverly Hills and Las Vegas, bringing the matter within the scope of the Foreign and Corrupt Practices Act. Now there’s a stroke of luck! The way I see it, we hand over the investigation to the Yanks and leave the five-year statute of limitations to do the rest. That should restore the special relationships out east and west. Good thinking, Belloc-Brayne you old fox! An ambassadorship to the UN should be your reward.
Between ourselves, the Model Portfolio has been under strain of late following a rash of symbolic nationalisations in Latin America where the race is on to succeed Fidel Castro as the region’s prinicipal gadfly. A plague on the emerging markets! On the other hand, Moscow, Vilnius, Riga, Tallinn, Warsaw and Ljubljana head the stock market performance tables in US dollar terms measured from the turn of the Millennium. Why, even the inscrutable Shanghai Composite rang up a 150% gain in 2006. The way I see it, the Reds must have penetrated every bourse in the free world during the Cold War. I sense that the time has come to reconsider the Model Portfolio’s exposure to Establishment markets like the LSE, NYSE, Nasdaq and Tokyo Stock Exchange. Lady Belloc-Brayne favours a “contrarian” investment strategy that harnesses the hidden potential of the world’s most lacklustre markets. By my reckoning, that embraces the LSE, NYSE, Nasdaq and Tokyo Stock Exchange. Plus ça change… Form is fleeting, class eternal.
I see that the famous Gutshot Club has been charged with breaching the 1968 Gaming Act by running poker games without a licence. Predictably, the defence is arguing that poker is a trial of skill and the Crown that it is a game of chance. Ho hum and stalemate! I have written to the judge with a proposal for unravelling this Gordian Knot. The way I see it, the randomists should take on the methodists in a statistically significant number of hands of Five-Card Stud or Texas Hold ‘Em (sponsored by a super-casino-in- waiting perhaps) with the result binding on the court. Spot on, Belloc- Brayne! With any justice, you will be Attorney General one day.
News on the regulatory front is that the Financial Services Authority is “concerned” that the Hearts of Oak Friendly Society has been technically bankrupt for the last eight years. No lack of urgency there! Never had much time for Friendly Societies myself since my run-in with the Sons of Temperance over the terms of membership.
I note that the Government has exempted its National Pension Savings Scheme from regulation by the FSA, which settles all the outstanding investor protection issues at a stroke. Who says that we have not learned the lessons of the Equitable Life affair? Writing in my professional capacity, I confess that I am not too uncomfortable with the principle of auto-enrolment in a default pension fund. The Prodigal will do its duty and manage its share of any Nothing-for-Something cash directed its way by compulsion – especially if de fault lies elsewhere when things go awry. Hush, Belloc-Brayne! If word gets out that there’s anything in it for the financial services industry, we’ll have another u-turn on our plates before breakfast.
Must rush. Nurse will be along soon with my half-beaker of methane-taming lime sherbet. By the way, come February and we’re off on our annual “state visit” to South Africa where sixteen government departments spent R43m (some £3.2m) between ‘em on restaurants in 2006. G-d help the planet!
