Labour’s affair with bankers

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Gordon Brown sucking up to Richard S. Fuld, CEO of Lehman Bros, just after opening Lehman’s new London HQ. Photograph from tonight’s ‘Dispatches’ on Channel 4.

Terrific FT.com column by John Kay.

What would have happened if the Financial Services Authority or Bank of England had sought to block the competing bids from RBS and Barclays for ABN Amro – a contest which, we now know, would bankrupt the bank that won the race? The phones in Downing Street would have been ringing insistently and it is easy to imagine the government’s response.

Little has changed. The government continues to see financial services through the eyes of the financial services industry, for which the priority is to restore business as usual. For a time in 2008, it seemed possible to argue that a package of temporary support for the banking industry, combined with substantial recapitalisation of the weaker players, might stabilise the financial sector and prevent serious knock-on effects.

But the problems of banks are much deeper than were then acknowledged and the destabilisation of the real economy has happened anyway. Government now provides taxpayers’ money to financial services businesses in previously unimaginable quantities. But there is no control over the use of the money, no insistence on structural reform or management reorganisation, no safeguarding of the essential economic functions of the financial services industry and no accountability for the damage that has been done.

It is as though the teenage children and their friends were to wreck the house and then demand that the grown-ups clean up before the next party. Their parents are too intimidated to do anything more than ask Uncle Adair to keep an eye on them and excoriate the hapless Fred who made off with some of the silver.

M$ falters

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Well, well. This has been a long time coming.

On Thursday, Microsoft set the wrong kind of record, as it reported the first year-over-year quarterly revenue decline since it first sold stock to the public in 1986. In its third quarter, which ended March 31, Microsoft said its revenue fell 6 percent, to $13.65 billion, from $14.45 billion. It reported net income of $2.98 billion, or 33 cents a share — a 32 percent drop from the $4.39 billion, or 47 cents a share, reported in the period last year….

Of course it’s not really a reflection on anything M$ is doing. It’s just that it’s so tied to the business PC market that it’s bound to be badly affected by the downturn. Nobody’s upgrading at the moment. And I guess lots of companies (and customers) are waiting for Windows 7.

It’s an ill wind…

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Browsing in Borders this morning, I found lots of examples of ingenious capitalism at work, exploiting new market niches. For example:

Recession Bookshelf

On closer inspection, there’s a

Recession Game

And then there’s

Recession Cuisine

Health warning: Ballsheimer’s disease reaching epidemic proportions

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Jon Stewart has uncovered evidence of a new disease that is sweeping through the ranks of senior members of the Bush administration. It’s called Ballsheimer’s Disease. The symptoms are acute memory loss concerning unpalatable facts, and superhuman levels of effrontery. A prominent victim is former Vice-President Dick Cheney who last week was observed campaigning for freedom of information and the publication of classified documents. There is currently no known cure for the condition, though neuroscientists claim that some patients have been helped by lobotomy.

Former President George W. Bush is reported to be setting up a FaceBook group to campaign for better treatment for Ballsheimer’s sufferers. Interviewed at his ranch in Crawford, Texas, Mr Bush said that he would be setting up the group just as soon as he had located his Profile.

The iPhone and telephone-number profits

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This morning’s Observer column.

The significance of the iPhone – as regular readers know – lies in its operating system. It's really a powerful Unix computer that fits into the palm of your hand. That means it can run very sophisticated software – such as a browser that actually makes it feasible to read web pages and even books on a small screen. Add to this the fact that it is also permanently connected to the internet and you have what the rest of the industry is starting to recognise as a game changer.

Actually, the PC business is also beginning to wake up to the threat of the iPhone. How come? Well it turns out that iPhone users make less use of their laptops and desktop computers. The reason is obvious when you think about it: much of what we do on the net is pretty routine – checking email, accessing websites, Googling, accessing Facebook or Twitter. If you can do all that without booting up a computer, why bother?

The iPhone is also transforming the market for software…

Anti-social networking

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Well, well. Why am I not surprised by this?

A police officer has been given a written warning after he posted on his Facebook page that he was going to “bash” demonstrators at the G20 protests.

PC Rob Ward’s message was apparently published on the social networking website shortly after the death of newspaper seller Ian Tomlinson. His status, timed at 8.17pm on April 1, read: “Can’t wait to bash some long haired hippys (sic) up @ the G20.” Twenty minutes later a reply was posted saying: “LMAO (laughing my a*** off) dats bad but good in da same way lol (laugh out loud).”

The policeman’s page has now been taken off Facebook.

A Scotland Yard spokeswoman said: “A PC from Enfield was today given a written warning under public conduct regulations.” She confirmed the officer would face no further disciplinary action.

Coincidentally, I saw this news report shortly after reading this blog post by someone I follow on Twitter:

I know two policemen well. They are both good guys and in my age group, I’m 48. One’s a traffic copper and the other works in the drug squad. Both hate their jobs. They have two complaints. The first is the familiar one of red tape and stupid laws obstructing their ability to do their work properly. The other, I feel, is directly related to the type of stories that are making it into the news this week.

The force, they tell me, has been infiltrated by people who are not really interested in our society and its well being. Instead, they like the pay and conditions, not to mention the generous pension arrangements. More disturbingly, they like power and actually seem to enjoy violence. They show little regard or respect for any member of society regardless of race or social class. They have a deep set ‘us and them’ attitude that is, in my opinion, both wrong and probably rather dangerous.

Take a look at the films of the police problems at the protests. Now mentally remove the uniforms (for those that were actually wearing any) and dress the guys in a football shirts or even hoodies. Get the picture?

And, while we’re on the subject, here’s an interesting YouTube video which illustrates current police attitudes towards being photographed or filmed: