Open Road

Tuesday Oct 28th 2008

Surviving a Barack Obama rally: A Guide

With Americans due to go to the polls in seven days, one of Open Road’s resident Obama groupies offers a guide on how to survive his election rallies …

Thursday Oct 16th 2008

Banking – Back to the future

So here is a quick manifesto for the future of banking.  Apologies if this seems terribly old fashioned:

• Lenders should take a little bit of interest in whether borrowers are able to pay back the loans (radical that I know)
• Boards should understand what products their companies are selling.  This is a longstanding problem – remember Nick Leeson and Barings?
• All liabilities should be on balance sheet and not hidden from public view.  The Structured Investment Vehicles (like Northern Rock’s Granite) that hid multi-billion liabilities off balance sheet must never be allowed to return
• Areas outside regulation that pose a systemic risk, such as Credit Default Swaps – need to be regulated
• Credit rating agencies should be able to give credible ratings that have some resemblance to real risk
• Innovation should be kept to a brand new idea – that being careful with people’s money and not lending out twenty times more than the capital you have available are good banking practice.

Suggesting any of these things would have been regarded as laughable and ridiculous only a year ago.  How time flies eh?

That reshuffle – what really lay behind it

Now the dust has settled after the extraordinary reshuffle that brought back Peter Mandelson, it has become a little clearer what really lay behind it.

Brown really was desperate and depressed about his and Labour’s political future back in the Summer – and rightly so.

So desperate, that he was willing to do what nobody thought he would ever do.

He was willing to put aside old grudges, old rivalries and his ‘time for a change’ philosophy to invite back in to his inner circle the co-creators of new Labour to help him in his hour of need.

So back comes Peter Mandelson, whom Brown has hated for fourteen years.  Back comes Alistair Campbell as an adviser.  Brown even talked to Alan Milburn about getting him back in the Cabinet – but there the differences of opinion were too gargantuan.

Economic and political recovery or dead cat bounce?

Brown hailed as the saviour of the world’s financial system?  Tory lead in the polls cut from 20 back to 10 per cent?

Now nobody saw that coming a few weeks ago.

Brown, Darling, Mervyn King, Adair Turner, Treasury officials and to an extent the new City minister Paul Myners all do deserve credit for the UK banking rescue.

For the first time in the financial crisis, the UK authorities have been decisive, bold and at last ahead of the game rather than lamely reacting to it.  They have also attacked with some big guns the underlying causes of the crisis – namely capitalisation, lending guarantees and liquidity.  The US bail out plan could not initially tackle all three problems because Republican ideology at that time could not countenance the Federal government nationalising banks unless they were about to go under.

Monday Oct 13th 2008

Radio silence?

What a disappointment that Channel 4 is abandoning its efforts to enter the commercial radio market.  This blogger was personally looking forward to an even greater variety of radio stations able to offer intelligent chat and basically offer an alternative to John Humphrys of a morning – presuming that was the intention of E4 Radio.  Although some may have been allergic to ad breaks in between ministerial splutterings and protestations a bit of competition for the beeb would have been no bad thing in my view.

It also seems that other media operators are considering following suit and abandoning their plans to enter into the radio market.