Eldon-Online

Non-Compete Clause

Britain has enjoyed its most successful Olympics and Paralympics in years - testament you may think to a training regime that has been instituted in recent years to make up for mediocre past performances. Turning on its head the more usual cry of "Jolly good show; getting the bronze medal was an awfully good effort". Even the Aussies were surprised, but couldn't resist taking a swipe at the fact that many of the gold medals were won from a "sitting position". Now then, jealousy will get you nowhere.

There is no doubt in the minds of the British team at least, that quite a lot of the difference in their performance has been as a result of the availability of funding channeled from the lottery. Funds that have been put into the building of new facilities and have helped to defray the costs of some of the athletes who could not otherwise afford financially to take out the necessary time for training.

So, something is clearly going right. The facilities are better, there is time to train and so now all we need to ensure is that the competitive spirit remains. The will to win. The British tendency - and I am not critical of it, in fact absolutely the opposite - to be good sports, and by and large to prefer fair play has, sadly, provided us with a reputation for "choking" when it comes to the big events. For not having that desire to come out on top. No single-minded determination.

Given the recent results, then, we seem to have taken a dramatic step forward. And for the next step? Well, why not try and bring something of the competitive spirit back into the schoolyards. Surely, properly channeled this should be the foundation for future generations of athletes with a will to win. To compete with the rest of the world, who take their games seriously.

"Ah but", says a section of the governing bodies and teachers in schools, "if we lionise successful children on the sports fields, we are going to permanently scar those who are less talented". I guess this means we need to bring everything down to the lowest common denominator. Make sure nobody runs faster than the slowest person on the track so the slowcoach feels good! Well, I bet the slowcoach doesn't actually feel good, and knows exactly what is happening.

And now we have the professional sports bodies joining the fray. England's Football Association has now decreed from this season that the scores of matches played between teams of young people must not be published, that league tables cannot be kept and that prizes should not be awarded. The rationale? It is to allow young children to nurture their skills without facing the pressure to win.

Look, pressure is all around us today. The number of young adults who find the pressure of life generally to be too much for them saddens me. They are depressed; they seek solace in binge drinking. It's a modern phenomenon. Adults too face pressures, but I think that perhaps those of us who have reached a certain age are better equipped to deal with it, than the younger generation. 

I know I'm getting old and crotchety. Policemen are looking very young, a sure sign of old age, and I am much better at remembering what I did as a kid than what I had for lunch yesterday, but please - if this is where Britain is headed, then get used to being the perennial runners-up. Or, teach children properly, and at an early age, that an element of competition is healthy, and that while you may not be a good runner yourself, the good runner may not be good at other things. 

The best thing Britain can do, to honour the present breed of Olympian, is start to nurture their successors.

Obituary - Farewell to Common Sense

Some time ago a friend forwarded to me an obituary. Not his in anticipation nor, happily, mine. I filed it away because I knew it would come in useful one day - as it had clearly been useful before. An obituary, lamenting the passing away of common sense. I suggest you read it by clicking on the link before you read on.

If the structured finance crisis was not already enough to demonstrate the toxicity that a mixture of greed and insanity can bring, then surely we learnt the lesson that paying out millions of dollars in compensation to Chief Executives of institutions that had been brought to their knees was not morally acceptable; particularly to the people in those same companies who had lost their jobs. Didn't we?

Okay, so the amounts are now lower, but the headlines scream as loudly. Today's UK Daily Telegraph newspaper greeted its readers with the headline "Failed bank chief is £2m winner". This, of course, relating to the ousted head of HBOS, who has presided over the failure of a bank where, at the time of the forthcoming merger with Lloyds might see a loss of upto 40,000 jobs, according to some estimates (a little overdone, in my view). Oh - and he gets to keep a job in the new organisation!

In the meantime, across the pond, incredulity remains that a company like Lehman has gone, the folk at Bear Stearns who were rescued thank their lucky stars for achieving "first-loser" advantage, AIG were happy that they were too big to fail (insurers to the Government perhaps?), while toilet paper sellers are still doing a roaring trade around the offices of the likes of Morgan Stanley, Washington Mutual and Wachovia Bank. Everywhere across the globe, speculation is rife about the future - and now the US Government has acted to help shore up the world economies by chucking a couple of hundred billion US dollars at it!

Well, at least the markets have reacted positively today in response to this (rather late) gesture - but the British Government, in case they are uncharitably feeling a sense of schadenfreude,  can take the smile off their faces if they think they have acted expeditiously and smartly; think Northern Rock first of all, and then heed the words of an adviser to Hong Kong's Monetary Authority and to the Bank of England (now former adviser), Sir Charles Goodhart, whose view was that HBOS might have survived if the Government had acted more quickly. Back on the lap of poor old Gordon Brown - blamed again. It seems, they say, that if you meet him, make sure he doesn't wish you good luck!

But is all of this enough? Despite the market rally, have we now bottomed out in the west or is it just a temporary "happy blip" to make us feel better over the weekend? To be followed by the stark reality that on Monday morning we will still not have created any more jobs, an increasing number of people will realise they can no longer afford the rent on their swanky apartments, and the credit card repayments will continue to come under pressure.

No I do not think the world is coming to an end in financial terms, and we will muddle through eventually, but common sense not only suggests we should not live beyond our financial means. It also means that beyond finance, we should not condone (by turning a blind eye) the farce that appears to be Zimbabwe and other similar situations; that hiding behind religion - whichever one - is not an excuse for terrorism, and that many other of todays idiocies (see next blog;  "Non-Compete Clause") could be addressed appropriately by a strong dose of common sense.

Let's hope there is a cure for the apparently deceased.

Another Nice Mess You've Got Us Into....

It was bound to happen. The often touted, but spoken in whispers, demise of Lehman Brothers - and the realisation by the US Government that there is a limit to the amount of taxpayer money you can use to bail out wayward and, dare I suggest it, greedy investment bankers? 

As western nations continue to "prod" Asia and others to get their financial houses in order, we now have more questions to ask about the ability of the west to look after itself, let alone provide advice to the "developing" economies. 

Lehman has gone, strongly aided by the problems that existed in their commercial mortgage book (see my blog of 21 January 2008 - "What, Me Worry? - Yes, Me Worry"). Merrill Lynch has been saved, at a price.

Others look decidedly uncomfortable. AIG currently being the main case in point of course, and by the time you read this they may also be closer to the undertaker than the intensive care ward, but are we really so certain today about the likes of Wachovia and Washington Mutual? By the way, I am not casting doubts about their ability to survive, but they are prominent among the names I have heard over the last 24 hours at the SIBOS Conference being held in Vienna.

It has been an interesting conference, commencing as it did the day after "Black Sunday", but as I might have expected, I do get asked about the impact of all this "chaos" on Asia. In response, I think the best I can do is follow the succinct words of a friend whose biggest concern is the "psychological impact on the region". And I agree. (Ironic isn't it that psychological is made up of psycho and logical - a one worded oxymoron?) But I digress.

 Asian economies, by and large, are in reasonable shape. They continue to grow, albeit more slowly than before, but they grow nonetheless. Meantime, courtesy of events unfolding elsewhere, wealth throughout the region is being adversely affected by the copycat falls in the Asian markets that ape the falls in western markets. Falls in Asia that are not representative of the reality of economic performance. 

Sadly, there is more bad news to come out of all of this, but even now maybe we can learn some positive lessons from the west. For example, recognizing the fact that the future is never a linear extension of the past or the present. Understanding that markets are cyclical, which is a fact you ignore at your peril, as many seem to do. Also, in my experience it is rarely "different this time"; that is, problems often stem from similar roots, historically. And Governments as well as regulators need to recognize the value of understandable and enforceable rules and regulations, as well as the necessity for swift and decisive action. Or even determining, equally swiftly and making clear that they are going to take no action, leaving the market to find its own solutions Through no fault of it's own, Asia has been done a disservice by the "developed" world (well, the USA actually) - a real case worthy of Laurel and Hardy's famous catch phrase that I have used for the title.