Upshares Downshares
is the name we've settled on for Nils' slot, as suggested by David Cartwright. Congratulations David. Your prize of nothing at all is not winging its way to you.
He was in the office just now, relating the tale of how he was listening on Friday to hear me announce that he was in Liechtenstein visiting his money. It seems that Mrs Nils expressed some surprise at his apparently secret stash of cash...and she is believed to be out with the joint credit card as I speak.
Sorry Nils.
Listen to PM
© MMIX~RS~q~RS~~RS~z~RS~56~RS~)
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So its a credit crunch chez nils now is it?
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Great name…. I think it might have worked in Comic Relief rather than Children in need week.
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Will we have the music too?
And please can he come on as soon after 17:30 as poss as my train comes along soon after that and I can't hear PM on my phone radio on the train. Please, please, please.
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I've just read on the News 24 site that Gordie is looking at all sorts of goodies in the form of tax cuts etc to make us happier and feel fluffy wuffy. But isn't he the pm and shouldn't he be leaving all this sort of thing to the chancellor. Oh silly me he is the chancellor - or is he the pm - I am confused by his constant hat changing.
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thenicecatlady (4) I don't mind who wears which hat as long as they're not talking through it. I hope the cap fits, or we'll all end up passing the hat round, and then we'd all have a bee in our bonnet ;o)
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Speaking of not talking through one's hat, I heard in said on BBC news last week that millions of dollars were wiped off the value of US companies when the US stock (share) price fell.
Of course, the value of the companies remained unchanged, only their share price altered. I am sure Nils would never make this elementary error.
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RJM (6):
But Market Value = Share Price * number of Issued Shares, so if the share price drops, assuming a static number of shares, then the market value has dropped.
The book value - as reported in the financial statements and including the value of all assets - remains unchanged unless the company itself owns shares.
You might say that the book value is the more realistic one as it's based on quantifiable assets rather than the suppositions of the market, but as we've seen recently, the vagiaries of the market can have very real effects on the fortunes of a company. If the market says a company isn't worth much, it'll have real difficulties obtaining loan finance which will impact on its business.
So I respectfully have to disagree with you.
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RJM - say you're sorry
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@8: But not here! Having two threads devoted to apologies (one here, one on iPM) is more than enough, without this thread getting hijacked as well!
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thenicecatlady - you're asking the wrong person (Eddie about getting Nils on air soon after 5 30). Get the train company to hold the train until you've finished listening to PM. I mean, priorities are priorities...
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The PM prog and that bloke Sid who posts here do seem to have an unfortunate sense of timing.
Supporting PM taking little notice of markets, pooh - poohing the idea that there was a financial crisis coming - just a short time before the Lehmann Bros led crashes was silly enough.
Then another ostrich - like piece on the irrelevance of it all on the day the markets fall through the floor as they realise the US bailout is just a hand out to banks and won't help the economy as a whole one bit.
(Don't get on your high horse, Sid (all your puns are always welcome, though. Have a go. You are a very funny bloke))
Now, Upshares, Downshares, a pleasing name to be sure, but picked on one of the few days the markets make any sense from the point of view of change (rather than levels). For yesterday China announced 550 billion spending on infrastructure, schools, hospitals, anti quake housing.
So mining and oil and hence the market indices containing them go up.
The point is that almost always the the stock markets are driven by irrational forces. Yet those very numbers affect the distribution of income, the wage - profit bargain, pensions and insurance payouts and because the very existence of these markets permanently threatens a speculative, they limit the amount governments dare spend on schools, hospitals etc.
(In a boom, it's like a widow's cruse. Your £100 of shares goes up. You sell off the 10% gain. You still have £100 for the next quantum leap).
We need something daily about markets, all right!
And that is an account of their irrationality****. (The current LEVELS are still unreasonable)
The whole system needs replacing with a proper administered system with salaried accountants making the evaluations, not profit seeking speculators driven by fear and greed.
**** Take even today. The LONDON exchange was up 3.5 percent because of the news from China. Then they lost a percent or so, Why? The news was still the same. Mining companies could still expect the orders from China.
It's an irrational system and it doesn't need Preston - type, vaguely in sympathy, voices trying to make sense of it. The newsI should add, made little difference to London or here at all (Except in what could be done to avoid slumps).
Indeed, it's not just these markets that are irrational. They all are.
Think about the supply side of things. Lower the price, and suppliers are more reluctant to supply.
Lower what banks get from lending and they get far more reluctant to lend. (Mortgage holders are on the demand side for loans!!!!!!!) So Merve and his 'flying by the seat of their pants' MPC CUT rates to get banks to lend more to each other.
Oh. to US?? Well, they'll be LESS keen at these prices!!!!
I look forward to the satire from that bloke Sid the Sad and our new found poet (what rhymes with McNickle, I wonder) who apparently was first spotted as something strange at an archeological site land and who now lives as an over ripe trifle in St Albans.
PS Upshares, downshares is a great name, but let's take the REPLACEMENT of markets by a more sensible publicly owned system, VERY SERIOUSLY. It needs to be done.
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"Upshares Downshares"....brill!!
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(11) pmL - I think you have forgotten what shares are for.
They can not be run by salaried accountants as they are pure, and absolutely essential, betting.
A few individuals have a bright idea. (They think) They convince lots of people to buy pieces of paper that represent a tiny share in the company. The bright idea is realized using the money and finally after 5 or more years they make a profit. The shares pay dividends, or the value of the company rises and the original risk takers get their reward.
Now compare that to oil or gas dealing. Their dealing does not alter the cost of getting it out of the ground. Nor does it alter the oil in any way. In fact it changes nothing except the final price. The dealing relies on the natural storage in the system (tanks/tankers) so that dealers can make money out of a commodity. Since money comes out, and the oil stays the same, then the only outcome is; we pay more.
If you want to target your attacks at anything please look at the commodity dealers as they are just opportunistic thieves.
Leave the share system alone. Please.
(Buying shares in an oil company to fund prospecting is essential. Unlike, buying and selling oil/gas for profit, which is a symptom of a country without adequate reserves and storage ability after the government was caught napping since the North Sea could not supply our daily needs.)
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Hmmm, where can I buy shares in iPM? I saw it mentioned in The Guardian last week, so its value must be rising...
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"Upshares Downshares"
Wasn't that a tv series with Jean Marsh and Gordon Jackson init?
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11 and 13
Fair enough.
And 12, so true! Now, after over 150 points up this morning, the FTSE is only 40 odd up. Has the rest of the financial news (HSBC's losses, factory prices (so low firms won't bother)) etc, got thru? But all that we knew this morning.. You think the pound euro rate has spooked London??? Well, Europe is back down in the same way.
So what ARE we looking at, in the FTSE and the Dow etc?
Well, they're pricing systems (as opposed to a valuing system), as 6 observes.
Assets priced by people with a vested interest in setting them as high as possible.
As high in fact as they can get away with. Just like the commodity traders that 13 so rightly condemns.
And the derivative traders.
Just like in the dot com boom bust bubble, 'good' in these markets is when the assets traders hold are overpriced. By them. It is ridiculously dishonest.
Abolish somehow.
Can we?
Yes we can
And however we replace markets by admin processes, it can only be an improvement!
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It's interesting to speculate whether mutual organisations, such as building societies, are in a stronger position in an economic storm because they don't issue shares. It won't stop them being at risk from genuine problems in their balance sheets, of course, but presumably they aren't vulnerable to market volatility on their share price, because they don't have one.
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(17) - pt - But a companies share price makes no difference at all. Day to day operations continue.
The only issue is if someone can actually buy you out. Like your competitor.
So the badly run companies find one day that they have been bought. Mainly because they have been setting such big salaries, and share give always, that the dividend payments have been marginalized for their own direct gain.
Those fat cats' salaries, is the money that would have increased your pensions by providing regular income to the pension fund share holders.
The share holder base has been broadened to the general public so no one really reacts to the fact that the fat cats are actually self serving fraudsters. Where is the record of each board members past history of failure? How can the NHS mess up and the Northern Rock audit system failure be caused by the same person? How can the person who destroyed one of our biggest industries be in charge of one of our nations collection of heritage assets?
It is not the trading system that is crap. It is the companies, and their directors, that are crap.
Bailing the banks out will just leave the crap to fester. (There is an old adage about managers only hire to their own capability. So the bailout will keep killing us for years to come)
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18
I think you're right. But without public ownership how do we hire/fire those directors, and make 'em get it right?
Public ownership, now, please.
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There is an increasing similarity between Nils and R Peston - at least in the way they speak. In fact, when I tuned in this evening, I thought that Peston had usurped the post. Nils - DON'T GO THE PESTON WAY.
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(19) pmL - Alternatively the government starts to bring charges against the worst offenders.
It will be easy with hind sight to make simple charges stick. They can not say they did not know. They must prove that they did adequate checks on the system. They do not need to go for blood but just enough to get them stopped from being directors.
If Engineers can be locked up for not doing a full structure analysis for a ferry walkway then you can also prove they did not do the adequate financial checks. No one will vote for board members that have been shown to have looked the other way. Where is the online list of all the directors and their positions before the crisis hit the papers?
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Will Mr. Cartwright be paid royalties every time the name is used, Eddie? That's the least he deserves (and I doubt he'll even get that) ...
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Interesting that Liechtenstein is an anagram of Entice The Nils.
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Justfloating (21):
"No one will vote for board members that have been shown to have looked the other way."
On the contrary, it is the directors' job to maximise the return for shareholders (keeping only within whatever legal restrictions may exist). In a market-driven economy, everything else company directors do is secondary to that. If the directors had had *not* looked the other way and as a result had generated a reduced dividend for the shareholders, they would have been voted out.
I don't like the system, but that's the system we have.
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SSC @7
I think we both make very good points and I concede that yours is much better expressed than mine. However, I cannot agree that the share price will have much effect on a well managed company except to the extent that it reflects a general reduction in the market for its goods or services.
One only has to think of GEC under the management of Arnold Weinstock to realise that credit was never going to be problem for the company whatever the share price.
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