Tag Archives: John Longworth

The German domino

The Guardian is giving us another view of what seems to be blunt misdirection, in this case misdirection from the German industrials. The title ‘German industry warns UK not to expect help in Brexit talks‘ (at https://www.theguardian.com/politics/2017/jul/08/german-industry-warns-uk-over-brexit) might seem true, might sound true and by their own admittance be hopeful and true, yet in all this, we know that the statement is one that they cannot hold on to. You see, with every step that the UK gets into a slightly better stand, with every step where the UK economy gets a little better slowly yet certainly, it is in that phase that we need to recognise that the Germans are all merely facilitators to their own boards of directors (in multi plural ways). So, when we consider an EU population of 508 million and 13.5% of that population is British, do you actually think that they are willing to throw overboard a 13.5% consumer base? Who are you kidding? So as we see the words from certain players who apparently are trying to remain anonymous the quote “Two of Germany’s biggest industry groups have told the Observer that their main concern during the Brexit process is protecting the single market for the remaining 27 members, even if this harms trade with Britain“, which is a lot of bogus. The other 27 members can openly be single market as much as they like! The issue is that certain players are not part of THAT discussion. You see, do you think that Bayer, the large pharmaceutical wants a situation where they lose a large chunk of 68 million people who are aging? Do you think that they want to offer that multi million unit customer base to Indian generic pharmaceuticals or to American pharmaceuticals? The US loves that prospect, let me tell you that. In addition, once the US and India get a chunk of that base, they will have the foundation to grow stronger into the Netherlands, Belgium and Scandinavia. So suddenly 13.5% becomes 31% and that 31% is actually spending a fair amount compared the the lower 15 on that same EU list. Places like Solingen for metal ware and a few other German players are in that same neck of the woods. In addition there is the car industry; I reckon that Volkswagen is truly looking forward to losing that part to Saab, Volvo or its French equivalent. The UK will happily take decent trade deals with many of them.

So when we consider all this, the amount of bluff we see in the article could be costing the German economy a 2% drop, would that not push THEM into recession? So as I read about Dieter Kempf, president of the BDI, the federation of German industries, I actually wonder how he got his math done. When we see: “The UK will remain a very important partner for us, but we need a fair deal for both sides respecting this principle. The cohesion of the remaining 27 EU member states has highest priority.” This might be true, yet when you consider that the lower 15 are not much of any consumer and that your growth does not exist there, how soon until you weasel your way back into the shadows relying on the quote “I was merely voicing the issues our members were“, which is very likely to be true. Yet when we ask names, how many will you be allowed to phrase? How many members will step forward as the train wreck you yourself created is showing the levels of damage it incurred? At that point they will all hide in the shadows, and we will find their statements to be part of the loom of those weaving their personal private needs, not the ones of any of the industries you claim to represent.

In this the quote “While we will be leaving the single market and the EU customs union, we want to achieve a comprehensive free trade agreement that allows for the most frictionless possible trade. The government has been clear that we want to ensure a smooth implementation of our new partnership with the European Union that is in the interests of businesses in the UK and across the EU.” that part makes perfect sense, yet that comes from the UK side and there is the ball a little smoother. There is a difference between wanting an actual trade deal and others trying to force you into some trade deal that benefits certain people the most. Wanting trade versus bullies and opportunists is never a trade deal. In all this Markus Beyrer, director general of the Business Europe group gives us an interesting side, or better stated, he phrases it almost identical. He states “We want a good deal for business, which means an orderly Brexit and an orderly transition to the future relationship, while fully protecting the integrity of the single market“, this actually sounds good, yet in all this the issue is more and more becoming about the validity of the ‘single market‘. You see if this single market is so awesome the fact that the UK is staying in it is not a problem, in that this same ‘single market‘ would shrug their shoulders, making some ‘their loss‘ statement and move on. Yet did this happen, no it did not! We have seen all levels of bulling, statements of near blackmail and a level of almost feudalistic statements in the air of ‘remain or else’. You see, it is almost like the old communism, ‘be a member of the party or else‘, did you not notice that? So what is it that they do not want the UK and others to learn and find out? Did you not once consider that part? It started when the initial UK economy was going up a little, now it is about 27 members trying to oppose the UK at every turn. It is almost like watching a physician making the patient sick so that he can sell medication.

When was the single market ever about that?

John Longworth, the former director-general of the British Chambers of Commerce who campaigned for Brexit, is on my side. When we look at his quote “The European project is so important to the Germans politically and economically, that the German political establishment are prepared to sacrifice even their own car industry for that outcome“, I wonder if that is true. You see, when the car industry (read: Volkswagen) gets the first dips in their results and when those boards will miss out on several millions of Euros in bonuses, they will call other people and someone will get axed really soon thereafter. You only need to take the revenue from a pimp once for that person to take a less optimistic view of life and the health of his opponents the moment it happens. We have plenty of long term evidence in that regard. In all, the only thing the German industry would do is alienate the British who don’t like to be told by any German, any day of the week, so there is that to consider.

In all this the EU made one colossal error. Even as we have all been ignoring it, the opportunity offered which was quoted in the Economic Times: “India is one of the fastest-growing large economies and is expected to surpass Germany and Japan to become the third-largest economy by 2025. India has become the land of possibilities, and when you consider that the country offers a growing market of 1.25 billion consumers you can see why“, so as this market grows import, it will be on the edge of a razor to grow its export, preferably larger that their import, so as the EU markets are playing hard sale, India is ready to come in and offer all kinds of deals with the UK. With a growing Indian population, the UK (Australia in second place), are the two markets where India has options and opportunity to grow. Once the Germans learn the hard way that they gave away a chunk of their market, how long until the other EU nations come running for some kind of a trade deal?

You see, in all this the UK always had options and as the Europeans are posturing themselves into the UK alienating from them, we will see growing amounts of evidence that these posturing parties were only hurting their own cause.

The most interesting quote comes from Albrecht Ritschl, an economic history professor at the London School of Economics. He states “One thing German industry is clearly worried about is the potential disruption on the way to a free trade agreement because it cannot be negotiated within the two-year timeframe“, which is interesting because why not start to negotiate today with the UK with the start date of that trade deal to be the day after Brexit is complete. Anyone stating that this is not an option is lying to you. The entire industrial industry from 1918 onwards has been set on the smoking cadavers of those who ruined what was before. We see this in the Marshall plan. Even as we see that the plan was in operation for four years beginning on April 8, 1948. There is clear evidence that the preparations started as early as April 5th 1946, these were not the first players, but their reference to the meeting on the ‘preceding Monday’ gives light that actions had been planned for much longer. The Marshall plan, a plan that involved the two players Mr Cohen and Mr C.P. Kindleberger, the appointed member of the US Treasury.

In all this Germany could have been starting their own industrial conversations with the leading UK industrials. It is really weird that they have not actively done so from day one. If this was to gain the UK banking votes that they went about it the wrong way, if it was to continue the old track that is was more than merely stupid, it only shows that the ‘one market’ path is flawed for many players and it seems that too many players want to keep that side of the story between the sheets, yet for what reason I cannot say. I can speculate that this was merely about greed, but that would be too simple and the greed that holds in contempt other players tends to see the light of day quicker than we realise, so I honestly cannot say what we are prevented to see. What I can say is that the entire German boast of them sitting on their hands was not too bright and in the long term they are very likely to hurt themselves a lot more than others.

 

 

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Is the truth out there?

That is the question that sprung to mind, when the article ‘Brexit could cost £100bn and nearly 1m jobs, CBI warns‘ (at http://www.theguardian.com/politics/2016/mar/21/brexit-could-cost-100bn-and-nearly-1m-jobs-cbi-warns) crossed my screen an hour ago. Of course it then continues with the subtitle ‘Report conducted by PricewaterhouseCoopers for the CBI‘, perhaps you remember that firm named PwC? The people behind the books kept for Tesco. The firm the press avoids like the plague (especially when digging into Tesco issues). A report for the CBI no less. When we look at wiki we get ‘Confederation of British Industry is a UK business organisation, which in total speaks for 190,000 businesses’, so basically, because businesses are afraid to export their articles, we get this level of scaremongering. And let’s be honest, when Lehman Brothers is not available, PwC is all that remains. The Wiki reference will be explained shortly.

The first paragraph states “Leaving the European Union would cause a serious shock to the UK economy that could lead to 950,000 job losses and leave the average household £3,700 worse off by 2020, a report commissioned by the CBI business lobby group has warned“, I personally consider this to be a blatant lie!

There is NO WAY that there is any clear data on this event. The reason is simple. This situation has never happened before so there are questions, that is a given, yet what they predict is that 2 times 100% of exports that the UK ships to the USA becomes lost revenue. This is just ludicrous. Leave it to the place that embellished 110 million in revenue for Tesco will be able to lose 1000 times that amount in goods and services for the CBI. I am merely speculating here. I wish I could give you more, but the press is very engaged into not confronting PricewaterhouseCoopers on their actions.

The second paragraph “an analysis conducted by accountancy firm PricewaterhouseCoopers for the CBI said that Brexit could cost the UK economy £100bn – the equivalent of 5% of GDP – by 2020 and would cause long-lasting economic damage from which it would never recover“, let take a look at the parts PwC (as I see it) hides behind ‘could cost‘ meaning that it might, it is not a given. the second part ‘would cause‘, means that if they lose 100 billion then it would impact the economy, which we can all agree with, but that level of loss is NOT a given. Lastly there is ‘long-lasting economic damage from which it would never recover’, ‘would never’ is also not a given, consider that thanks to British Labour, who caused a massive part of the fourteen hundred billion in debt, on that part 100 billion will have an impact, the economy will recover, yet in all fairness, at what speed? We all agree that this massive extra level of debt is not a good thing, but it all began with ‘could cost‘ so it is not a given! The CBI, like frightened little sissies are trying to sway voters through fear. You see, if these businesses have an actual product to share, people will buy it.

They then continue to push more fear that people would lose between £175 and £300 a month. I would be shocked, we all would be shocked. Yet again there is ‘could be lower‘, meaning it is not a given. When I read “Carolyn Fairbairn, the CBI’s director general, said: “This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth“, my response would be ‘Carolyn Fairbairn, we know you are high and mighty with previous position at the  Competition and Markets Authority, Lloyds Banking Group and the UK Statistics Authority, so if you truly stand behind these analyses you will give us all (in open data) the raw data, the analyses and the conclusions with data connections‘.

I feel certain that we will see all kinds of weighting, forecasting and predictive modelling. As I see them, they will be utterly useless, for the mere reason I gave at the start of my blog “This situation has never happened before“, there will be turmoil, there will be a time of flux, but this forecast of utter blackness on non-given facts and shady forecasts is just completely out of bounds.

You see, I went to Wiki for a reason, when we go to their website we get a few issues (and initially their website was unreachable for about 15 minutes). The first one is from 15th of March (at http://news.cbi.org.uk/news/cbi-to-make-economic-case-to-remain-in-eu-after-reaffirming-strong-member-mandate/), here we get the quote “80% of CBI members think being in EU is best for their business – ComRes survey“, now, consider the following two elements, first is the ‘given’ fact on their site “CBI’s relationship with 190,000 businesses of all sizes across the UK“, now consider that survey where 80% wants to stay within had the following quote: “The survey had 773 responses among small, medium and large firms across the whole of the UK. It reveals 80% of CBI members, when weighted to reflect its membership – including 71% of small and mid-sized business members – believe that the UK remaining a member of the EU would be best for their business. Overall, 5% say it is in their firms’ best interests for the UK to leave the EU, with 15% unsure“, So out of 773 responses, 116 were not sure, so only 658 were certain one way or another, so the 80% comes from that group?

In addition, the fact that I, in 24 years have never seen ANY survey been answered for 100%, so how many answered it, how were the numbers given and how can any of the numbers have ANY level of reliability? That is even before we start looking into the questionnaires some people tend to make, which is often enough not that neutral to begin with.

All these thoughts took 45 seconds to form, after which I needed 30 minutes to look into some of the known givens whilst Graham Norton was playing in the background. The biggest fun I had was considering the part where the CBI is basically stating between the lines that “UK products are so shaite, that it can only be sold under EU membership“, is that not so Mrs Fairbairn? I believe that UK produce is high, high enough that there will always be a demand and high enough that people will go out of their way to get it. The gaming column last week that had a go at Brexit earlier was eager to ignore the fact that some of the better games developers are British, there is British Beef, British Lamb, the UK foundation in vegetables and fruits. The United Kingdom has always had a good stock and a proud tradition. I think that these traditional times can return the UK to better times.

That is also a speculation on my side. You see, this is the one time that the Telegraph has a fair point (yes, this rare occurrence happened on February 23rd 2016), There is the quote “The only appalling part is that we import so much poor quality foreign food at the expense of our own farmers“, I believe that there is a deeper truth. Obesity comes from junk food and from bad quality food. Yes, produce might rise a little in price, yet when you get the same quality ingredients from eating only 50% of the amount of junk goods you used to eat because it was cheaper, I believe that the overall health of the British population would also go up (read: lowering obesity). Mrs Fairbairn could have given that information too, you see the CBI site claimed to be connected to 190,000 businesses, so how many of them are farms?

This is no longer the age of Tesco (thanks to PwC to some extent), in addition, it stops being the place for Aldi and Lidl, it will slowly return to being the place of the neighbourhood grocery and butcher. I have nothing against Aldi and Lidl, yet their models do not run on the small local farms, their margins (low margins mind you) comes from bulk retail from big portion purchasers to deliver to all stores. It is a fair model, yet after Brexit there will be a change, their margins will fall, that is a reality, but if this opts for small business owners to rise from the ashes, the Brits in general will all win, we would see a need for jobs, not a loss of jobs. Again, this is speculative on my side, yet I do not go about scaring you readers like the CBI is doing through PricewaterhouseCoopers.

So, how about my own statement: “I personally consider this to be a blatant lie“?

As I see it, this report has issues, possibly a whole lot of them and if that is not the case, Carolyn Fairbairn would (read: should) have all the data ready for us all. When we see this level of incomplete information, giving rise to the possibility of misinformation the reference to ‘blatant lie’ is a fair given one, as I see it of course.

Now, mind you, the CBI page has the full report ready (at http://news.cbi.org.uk/news/leaving-eu-would-cause-a-serious-shock-to-uk-economy-new-pwc-analysis/leaving-the-eu-implications-for-the-uk-economy/), a 79 page document, so what does that give us and why was that not in the Guardian (as far as I could tell)?

We see the following under the key findings:

  • We have assessed the potential economic impacts of a UK exit from the EU under two possible scenarios
  • We estimate that total UK GDP in 2020 could be between around 3% and 5.5% lower under the FTA and WTO scenarios respectively than if the UK remains in the EU (interesting is how ‘we estimate that’ was not in bold)
  • The negative impact represents a reduction of around £55-100 billion in UK GDP, at 2015 values

And the final bullet point was “As with any economic modelling exercise, our estimates are subject to many uncertainties“, which is actually the core of it all, too many uncertainties, which gives additional weight to my statement.

Yet how were these numbers derived?

You see, when we see ‘Table 2.1: Exit scenario results – percentage difference in real UK GDP from levels in counterfactual scenario‘, we think we have something here, but on what core business is this founded? Is this on raw data sets? On aggregated data? You see, PwC have done all kinds of reports where they were overly optimistic, is the idea that they are intensely overly conservative on any of these numbers (by request of the CBI) and that the negative numbers are actually quite too negative? The fact that they are making predictions until 2030, whilst so far many firms resorting to analyses have been unable to make any decent prediction 3 years into the future, they ended to be overly optimistic again and again by more than one percent (try remembering Greece and Cyprus). Then there is: “A vote to leave the EU would create economic and political uncertainty that could last for several years while the UK Government negotiates the terms of its exit from the EU as well as new trade arrangements with non-EU countries“. Here is the kicker: the report did not once, I say again not once properly discuss the option of growing economies by promoting a growth interaction between Commonwealth nations. The UK stands not alone! Her siblings Australia, Canada, New Zealand, India et al, still need goods too. Whilst we see the ‘BS’ (Belonius Substance) from America regarding how the UK must stay within the EU, the UK can decide to collaborate with India on Generic medication. Now suddenly we get some individual in a white condo going on how friends should remain friends (that individual tends to be addressed as President of the United States), so here is one side of commerce that would ‘suddenly’ open doors for all kinds of trade.

The bibliography has a fair amount of theory references, and even though their existence, or their academic value is not in question, what is in question is the PDF we are looking at, especially when we see ‘Figure D.5: Working age population projections under the WTO and FTA scenarios and counterfactual‘, we see these numbers and graphs, but from what dataset? Where do we see any reference to the data population used, especially when we see a collection of graphs from various sources but with no clear reference to the numbers that these predictions are based on? In one example starting on page 47, we see ‘C.1 Economic context and key issues‘, with a reference to three graphs from two different suppliers. This gives me a few additional question marks (and it should leave you with even more questions). You see, if 80% wants to stay in Europe as stated by the CBI, whilst they had less than 800 responses, how does that hold any weight to the fact that they, on their own site state “the CBI’s relationship with 190,000 businesses of all sizes across the UK gives us a unique insight into what the result will mean for UK prosperity“, which means that 80% of the 0.4% of the businesses that decided to answer the call of the survey. I think I have raised enough questions for you the reader to be a lot less worried in this case!

Now, I am not stating that there will not be any issues, because the UK will face issues, but in equal measure the UK will stop making massive donations to a system that does not hold some of its members properly to account. It is like carrying buckets of water to the sea, an empty gesture that is a clear waste of time and money.

By the way, that report has a very interesting by-line which is shown at the very end (page 79): “This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice“, so if that is the moment of non-accountability than my final words are towards the writer of the article Julia Kollewe and especially her boss (or the boss of her boss, Katharine Viner): ‘How could you have been so stupid to go with this article. From my point of view, as a blogger tends to be a subjective one, it is a hack job, nothing more than mere anti Brexit material‘. As a newspaper you should have known a lot better! The fact that Julia writes “By taking a clear stance on Brexit, the CBI differs from the smaller business lobby group the British Chambers of Commerce, which is trying to be impartial. It recently suspended its director general, John Longworth, from his post after he suggested that Britain would be better off outside the EU“, yes, they might have done this, and they did it in what I regard a shady and shoddy way!

The article in the Guardian and the report leaves us with a few questions regarding Carolyn Fairbairn, the CBI as well as a few questions regarding the editorial of the Guardian. I hope that at the very least that part has been brought to the surface by me writing this article.

To all a lovely evening and whether you believe in Brexit or Bremain, make sure that you go towards the referendum properly informed!

 

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