bozo's return

Anti the highly paid?

Stuart Fraser, the dude at the Corporation of London responsible for arse-smooching the rich and  famous in the money industry has said today (in my new favourite paper ~ City AM - IT'S A SCREAM) that we, as a society are in danger of being anti the highly paid.

So, I asked myself if Bozo was one of those he was talking to ...

Well I don't think I am anti- them at all (although its hard to actually like them...). Let's face it Bozo worked for years as one of them (but made the error of never being quite good enough at it to actually be highly paid!).

Then again if we just dig deeper into the aritcle we read: "These are young men with short careers"

I wouldnt want to accuse the City of being sexist - but those are his words not mine.

The front page of City AM mentions the £53 billion paid by the City in taxes... They mention it would pay for 265,000 nurses.

Well it would have or could have but for the next 16 years its just going to be spent recovering the cost of the £850 billion bail out of that very same City! (I take the figures form the BBC here)

Yesterday Bozo said markets arent a bad thing, believing they are never wrong is a bad thing.

The City isn't a bad thing, believeing it is never wrong is a bad thing.

We can argue for years about how much the bailout did cost, has cost or will cost in the long term and so on and yawn. But the reality is that the City did need to be bailed out. It is a fact that if the City had been left to its own devices in 2008-09 that the financial system as we know it would not exist, after a number of high street institutions would have closed their doors forever thanks to City traders selling their equity.

The tax payer spent hundreds and hundreds of billions stopping that happen, and much of those billions ended up in the pockets of the people that caused the problem.

Mr Fraser needs to understand that the public at large are not anti- the City nor anti- big bonuses. We are anti- those bonuses being paid for failure. The City at large failed. And yet the public sees the City at large getting paid big bucks.in PR terms the City would decry that in any public business. In fact it did... let;s give you an example:

City analysts decided that poor Tony Hayward was a PR disaster for BP after the Gulf oil spill... he was derided for handling it very badly. The City sold BP stock because of the way Hayward handled himself publicly. What Hayward did eventually was resign.

What he didnt do was pay himself billions in bonuses.

Unlike Hayward and the oil spill, the City actually caused the crash. And, at best, paying themesleves billions for doing so was a PR disaster. That PR disaster is at the heart of the public's feelings about the city and highly paid and Mr fraser needs to acknowledge that. At worst - well let;s not go there...

Don't trumpet about your £53 billion in taxes when your failures take 16 years to pay off!!!!!

You aren't paying for any nurses until about 2025, until then the nurses paltry taxes are paying for YOU and your bonuses!

Allister Heath manages to get through a whole lead article without butchering the English language (a feat worthy of a City bonus in my view) - but he finishes by saying that "Capitalism requires that all bad firms be allowed to go bust, wiping out shareholders". So capitalism says you can make £53 billion a year in profits, but, if you takle big enough risks you will go down. This why HSBC wants to stay "too big too fail" obviously! But the thing is Allister, Capitalism also requires that all bad countries be allowed to go bust too.There's no point being all gleeful about the City's value in taxes to our country when another cock up in the city will kill the country off completely! Especially if it happens before we have finished paying off the last one.

The City is busy making snide comments about the public finances of every country in Europe... all of whom's finances are screwed because of bailing out banks...

Go figure...

 

 

Let's try again with the market is (never) wrong.

So. According to the national audit Office the government's bail out of the banks is heading for break even!

If the banks ridiculous performance in the FTSE is anything to go by. Maybe better than break even.

So. A few short years ago all those people buying bank shares were sellers. There was in fact no buyer to be found.

Doesn't that make the market wrong? And. Potentially. Catastrophically wrong?

You may try to claim that but for government intervention all the banks would have ceased to exist so the market would have been right without intervention.
Well that argument is circular. The same sellers are now buyers. And they see a good future for the banks (presumably!)

So surely at best they were right then in the short term only. But being allowed to be right would have prevented there being a long term at all.

The market is not a bad thing. Its a better way of setting prices thank asking Josef Stalin to do it.

But it is not perfect. It is deeply flawed because of the deeply imperfect people who inhabit it.

The mistake isn't to have a market.

The mistake is to think its always right.

Sent from my BlackBerry® wireless device

The market is never wrong - in theory

I was very tempted to discuss Jeremiah chapter 5 today. It was written about 2500 years ago. But seems to describe the modern world pretty accurately.

A world that has forsaken God and worships Gods that are not gods (money, fame, celebrity, science). Well fed and lusty people lusting after other men's wives.

My personal faves are verses 27-28. They have become rich and powerful. They have grown fat and sleek. They do not seek justice. They do not promote the cause of the fatherless. They do not defend the just cause of the poor.

When I was reading it I got a strong image of all those Tea Party activists (majority claiming christian status) carrying signs saying: "you have no right to what I have earned"
A statement true in 2010 USA. But one it seems the prophets in the bible (not to mention Jesus) would disagree with.

Let's hope what happened after they ignored Jeremiah won't happen here. It will be like the first act of independence day!

Oh. It seems I have discussed jeremiah chapter five after all.

Enjoy Christmas and spare a thought for the poor.
Sent from my BlackBerry® wireless device

Houston we have a problem (we just don't know what it is)...

As a consultant you get used to the fact that when you tell someone what you do (unless you precede it with "neurosurgical") you get a sneer.
Not as bad as estate agents or investment bankers. But a sneer. Recently this was accompanied with the tired old gag:
"Oh right. One of those blokes who borrows your watch and then charges a fortune to tell you the time!"

Well I decided to explore this to its logical end:
Me: "so why did you hire someone to tell you the time if you already knew it?"
Loser: "I didn't hire them my boss did"
Me: "so your boss didn't know the time?
Loser: "presumably not"
Me: "so why didn't your boss just ask you the time?"
Loser: "well you will have to ask my boss that!"
Me: "ah! Now I see your problem. Your boss hired a consultant to find out the time but what he should have done was hire a consultant to sort out your internal communications problems!"
Loser: "we don't have communications issues its just management don't have a grasp of what goes on in the front line"
Me: "so can I ask. Why don't you tell them?"
Loser: "more than my jobs worth to approach management like that,"
Me: "ah! Now I see your problem. Your boss hired a consultant to find out the time but what he should have done was hire a consultant to sort out your cultural problems!"
Loser: "we don't have cultural problems! Its just the boss won't listen to anybody!"
Me: "ah! Now I see your problem. Your boss hired a consultant to find out the time but what the company should have done was hire a recruitment consultant to recruit a new chief exec!"

Of course the recruitment consultant was needed much lower down the hierarchy but I refrained from telling the loser because it wouldn't have been much fun sitting next to him for the rest of the journey!

Enjoy!

Sent from my BlackBerry® wireless device

Gutter journalism

Well

Its a wonderfully alluring headline.

But actually I just want to bemoan the writing standards of freebie tabloid City AM (again).

In his leader Allister Heath calls the EUs dictum on derivatives trading a (quote) "self inflicted goal"

Not an own goal
Nor yet a self-inflicted wound.

A finer piece of metaphor murdering will not be seen this decade.

The supporters of the Cityboys have all their erudition and class it seems.

In spades. Or is that in shovels?
Sent from my BlackBerry® wireless device

Reward Strategy and Management, the Sports Allegory goes on and on and on...

I turn my attention today to Manchester City.

The Sunday Times carried a front of the Sports section piece about there being a clear out of talent (??) from the City wage bill in the transfer window.

The names mentioned will sound familiar... Wayne Bridge, Sean Wright-Phillips - among others.

Players that have played for England (if not as regular starters) but cannot maintain a regular place in the City side... more on that later.

City have spent, let's face it - GAZILLIONS!

And so far what has it got them?

Well the good news is they appear to be fourth in the Premiership... only 3 points adrift of the leaders.

The bad news is they are only three points ahead of Spurs, 6 ahead of Bolton and Sunderland and only 7/8 ahead of West Brom and Stoke!  I think its fair to say that Stoke and West brom have spent a fair bit less than Man City.

The point isnt so much that they seem to have got very little in return for spending all that extra cash (although that is part of the point too), the point is that all of the transfer fees and all of the wages spent on a significant percentage of their playing assets are now going to be written off.

In your business that would be called failure.

I am not having a go at Mancini - I think he is quite a talented bloke. I am not even having a go at mark hughes, i think he is quite a Welsh bloke.

What i am having a go at is the concept that your reward strategy can involve throwing money at talent for no return.

Because while the retrun of 4th place - with a remaining fighting chance of winning a title might seem to be good - it wasnt achieved by virtue of all the talent being paid for.

 

At the end of the day wayne Bridge and Sean Wright-Phillips are journeyman who have never held down a starting place in a premiership team since they started playing for big clubs! Not at Chelsea and not at Man City. They still sign for big clubs - because the teams where they could play 90 minutes every saturday won't pay them what they are "worth", at least in their own eyes.

The warning sign should be they prefer to get paid big bucks to sit on the bench than smaller bucks to play actual football.

The thing is that there are a lot of mediocre people in the commercial world who are also benefitting from poor reward strategies that allow them to get paid and don;t manage their performance.

Creating a successful business, like creating a successful football team is about more than wages. If all your employees want is wages, you have got the wrong employees. 

And before Bozo's Antagonist writes in - i am not saying wanting wages is wrong - I a saying wanting ONLY wages is wrong... and if thats all you can offer your employees, all you will get is 4th  place and a load of people you wish you could get rid of in the january transfer window

 

Enjoy