The Sunday Times and Croissants, Weekly insights and updates for the 4th November

The search for a manufacturing recovery

There is something special about Sunday morning, the Sunday Times, hot croissants with honey and butter, excellent.

Headlines  – “Hero’s son to lead UK troops….”
Brigadier Rupert Jones 42, will arrive in Helmand province in April, to take charge of Number 1 Mechanized Brigade. Brigadier Jones is the son of Colonel “H” Jones, the Falklands war hero posthumously awarded the Victoria Cross for outstanding bravery. Why pick this out? Well, you know you are getting older when policemen look younger but there are no guidelines when sons of people you know become Brigadiers fighting distant wars in far off places. We wish the Brigadier and all our warriors well and safe return.

Maurice Saatchi on page 11, reveals the grief of losing his wife to cancer. It has been so painful that he visits her tomb each morning, to share breakfast, when at the family home. It is a moving story. Poetry played a great part in the life of his wife, Josephine Hart. The article quotes from Auden’s Musee Des Beaux Arts dealing, as it does with the solitude of grief. As W H Auden relates, The tragedy of Icarus falling into the sea was lost on “The expensive, delicate ship that must have seen, had somewhere to get to, and sailed calmly on”.

One suspects the same reaction awaits Michael Heseltine and The No Stone Unturned Report listing 89 things that could be done to save the nation. The Front Cover shows a cartoon depicting Tarzan’s search for the remnants of British Manufacturing. Using a torch pointed in the direction of the Home Counties, it is a clear parody of an imminent energy crisis and the need to rebalance the economy. Auden also wrote “if I could Tell You – Time will say nothing but I told you so.” Michael Heseltine has been in parliament for almost fifty years.

Which leads nicely to Economics News this week, What is going on at the Bank of England? Charlie Bean Deputy Governor was in Hull this week delivering the JSG lecture at the University. The Bank has just realized that low interest rates of themselves do not lead to a surge in investment, depreciation of sterling does not lead to an improvement in net trade and QE may not be delivering the benefits to output and growth envisaged at the onset. All this from a £65 million economics budget and a £3.5 million upgrade to the model. I could have told you so, for free, check out The Saturday Economist for more.

Iain Dey, Deputy Business Editor of The Sunday Times asks the Governor to “Come clean on your goal for the banks”. Are the banks to lend more at discount rates or are they to boost capital provisions? Are they to exercise compassionate lending or call in loans to ailing companies? The Governor expresses concerns about “moral hazard” but the Bank is becoming a hazard of morals.

Andrew Haldane in a speech at Friend’s House this week, suggested the “Occupy movement is right”, not clear if camping outside St Pauls is condoned but .. banks should determine to change, eschewing a sales culture and returning to Quaker roots. “To seek and discern the will of God as to the matter before us” presumably.

Last week, Haldane, delivered a speech on “Being the Right Size” a reference to the “Too big to fail” criticism of the banking sector. Drawing on Haldane’s Square Cubed Law [1928] Haldane [2012] explains why a flea, even were it to be the size of a man, would not be capable of jumping to the moon. It also explains, though I have never thought to ask, why a hippopotamus cannot turn somersaults. Also King Kong and Godzilla, I had not realized but find it slightly reassuring, are physiological impossibilities, the weight transfer associated with a single step would shatter their thigh bones. So much for Darwinian progression, one small step for man – a giant leap for King King and Godzilla. Clearly a step to far.

So do the banks have to downsize? The answer is yes, as Haldane explains in his closing remarks, “Drop a mouse down a mineshaft, it walks away but a rat is killed, a man is broken and a horse splashes”.  The regulator’s ambition is clear,  More Mice not Men in the Banking Sector.

Back to the Day Job … no diary this week but

Saturday, working in the morning, the day starts as usual with tea, the FT, and the Economist app. The Economist leads with “Which one” America goes to the polls next week. America could do better but Romney does not fit the bill.

In the afternoon, Tennis it is a 3- 6 setback, well it happens now and then,president.

Hope all is well, more news next week,

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