Back when $100bn bought very little

I saw this recently on The Big Picture blog and thought it worthy of reproduction

Consider that one year ago Royal Bank of Scotland paid US$100 billion for ABN Amro. That seemingly impossible amount would now buy:
Citibank $22,5 billion (74% down)
Morgan Stanley $10,5 billion (-72%)
Goldman Sachs $21 billion (-67%)
Merrill Lynch $12,3 billion (-77%)
Deutsche Bank $13 billion (-71%)
Barclays $12,7 billion (-71%)

And still leave $8 billion change - with which you would be able to pick up General Motors, Ford, Chrysler and the Honda F1 team.

Odd thing is, it would be hard/impossible to borrow the $100bn now to buy them.

Could USD and GBP become carry trade currencies

With US interest rates around/at zero and sterling interest rates poised to fall further, could these two currencies become the funding source of carry trades?

A carry trade is a strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate [Investopedia].

For years, investors have been borrowing japanese yen and investing in currencies paying higher interest rates. Provided interest rates remain stable, these can be profitable trades which can be amplified by leverage. Of course, they can go horribly wrong and investors have to remain alert in case they need to quickly unwind their positions as fx rates move against them.

Whilst many of the world's interest rates have fallen sharply, there are still some currencies that may offer some potential for investors, provided the fx rate volatility don't terrify you. Current interest rates around the world can be found here.

Of course, it does rely on being able to easily borrow funds in USD and GBP which isn't the experience for many at present. But don't worry, the central banks in both countries appear to be priming the currency printing presses to head off deflationary worries, so borrowing may become easier.

Spreeder - A fast way to improve your speed reading

I've been fortunate to develop an ability to speed read over the years, albeit I confess I've no idea exactly how fast.

It's an important skill, especially if you are time pressured, and improvements in your speed will genuinely free up more time.

Hence I was impressed by the free online application, Spreeder, that aims to help you do just that and which is a breeze to operate. Using text you provide, it renders the text on screen in a configuration and speed you specify e.g. 200 words per minute and three words at a time. By gradually ratcheting up the speed, you should be able to increase your reading efficiency. Of course, the important thing is not to sacrifice your comprehension of the content for speed!

Thanks to Andrew Dubber of New Music Strategies fame for pointing this one out.

MF Global ditch US Futures Exchange

Image via WikipediaI'm intrigued by the motives behind the decision by MF Global, announced today, to abandon its' interest in the US Futures Exchange in which it directly held at 48% stake.

The business was originally set up by Eurex to provide a competing offering to the dominant Chicago Mercantile Exchange. in the US. In 2006, when it was struggling to attract liquidity away from CME, MF Global took a sizeable strategic stake in the venture, with a view to ratching-up the competition in the market via an injection of its' own sizeable order flow and ultimately generating significant capital value for MF, given the heafty multiples that Exchanges commanded at that time.

The $7m annual cost of being involved in the venture is a relatively trivial sum for MF Global, which prompts me to wonder whether the current CEO's past positions, resultant beliefs and relationships have influenced this decision far more than the financials. Prior to joining MF Global in the Summer of 2008, Bernard Dan headed the Chicago Board of Trade (CBOT) where he served as president and chief executive officer from November 2002 until July 2007 when the company was acquired by the CME.

A dream that was realised

LSE foyer, Image via WikipediaBack in 2003 when I joined Man Financial [MF Global], the firm was one of the most active equity CFD [contract for difference] providers in the UK by volume. These derivative instruments are almost perfect economic substitutes for equities, albeit without voting rights.

As a firm, we typically hedged every CFD order received from customers by executing an order on the London Stock Exchange [LSE]. More significantly, we were almost indifferent between whether customers sent underlying equity orders to us or CFD orders. . This prompted me to question why CFD orders couldn't simply be traded on Exchange like an underlying equity. Indeed, why shouldn't the order book treat equities and CFDs fungibly, and leave the mechanics of how the trade is settled to downstream processes.

I pitched this notion to the LSE and to LCH.Clearnet, with the intention being that Man Financial would act as a matching counterparty to all CFD orders for the purposes of managing the cash funding requirements or stock borrowing arising from such trades. This proposal was favourably received by the other parties and efforts began to implement the necessary consultations and infrastructure changes.

Sadly, I left MF before the vision became a reality and Man Financial subsequently withdrew from the consortium for reasons that never became clear. Thereafter the initiative was held back by issues at LSE and LCH but I was delighted to read today that the initiative is now close to going live.

Aside from the benefits cited in the news report, one important feature I saw early on was that making equity CFDs exchange-traded removed the regulatory restrictions on the use of CFDs by mutual funds which existed in their OTC form. I felt that this would widen and deepen the use of CFDs to the benefit of all.

By coincidence, I met with Roger Liddell, CEO of LCH.Clearnet the other week whom I'd also known at Goldman Sachs and was pleased to hear my involvement hadn't been forgotten.

Dilbert guide to Mortgage Backed Securities and CDOs

Poundland expands

Image via WikipediaI heard a piece on the radio this morning featuring the CEO of Poundland, the retail chain that sells everything in the store for a pound. Thanks to the Government's reduction of VAT, his margins are up slightly as they retain the 2.5% drop in VAT. At the same time, their volumes are increasingly dramatically as the recession bites and customers look for cheaper alternates.

Most tellingly, they will have added 40 new stores this year and will look to do the same next year, on top of the 200 they already have.

A similarly sales boost is been experienced at other "value" retailers such as Aldi, Lidl, Asda and Morrisons.

Can we be certain our business will survive the next 12 months?

Company Directors and Auditors are having to think long and hard about the "going concern" opinions they are required to express in the annual accounts. Most businesses are facing an uncertain time, especially around their banking facilities and funding, as well on-going profitability concerns.

Yet they are equally worried that any reservations or qualifications they may make to protect themselves regarding the future in the context of going concern matters may be self-fulfilling and panic investors. For instance, highlighting that the continuity of the business depends upon successfully renewing banking lines 6 months ahead may lead to jitters given that the rollover of such facilities is no longer as certain as it once was. Likewise, being dependent on the survival of both major customers and suppliers may have once been taken for granted - no longer.

Funnily enough, I once remember during my accountancy training being diverted for a week from my normal sector [capital markets, banks and building societies] to a building/construction materials business. I was astonished how no consolidated information existed within this large group about its' "counterparty" exposure to large building firms such as Wimpey or McAlpines. Management simply had no idea what the financial impact would be of a major building customer going out of business would be. Yet it was evident that my enquiries were received with bemusement, since this wasn't normal practice anywhere outside financial services.

Winning a large contract from a large customer is now a double edged sword - you are grateful for the business but concerned about the cashflow impact given that large customers typically demand generous payment terms, as well as worried about the financial viability of the same customer. Slow payment has always been a source of finance for companies, but the squeeze by banks makes it increasingly important. Sadly the companies under the "cosh" are those that can probably least weather it.

Likewise, the just in time supply chain upon which you rely now resembles a fragile chain with links buffeted by strong financial winds. Somewhere down that line a key component manufacturer could disappear or simply fail to secure the necessary letters of credit to oil the wheels of trade.

In the current climate, providing an opinion about your future business state is the question you will be increasingly asked - do you have an answer based on substance that you can confidently offer?

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Boxing Day Scrooge at Chelsea FC

Image via WikipediaSo much for the spirit of giving! Chelsea FC have allocated West Brom fans just 1,400 seats in a stadium with a capacity over 40,000 for the Boxing Day game. Given that Chelsea regularly struggle to sell out matches, it is astonishing that they would be so restrictive given WBA regularly travel with upwards of 3,500 fans to games.

Whilst I concede that Chelsea fans may wish to see their club enjoy a goal feast over Christmas, I'd be amazed if WBA ranked as a must-see game for most Chelsea fans used to dining out on Champions League football.

A horrible day for City job losses

Image via WikipediaToday sees Credit Suisse announce a cull of 11% of their investment banking workforce, which is 5,300 jobs. Nomura have also announced 1,000 job losses following the absorption of Lehman staff. More job losses were also announced by State Street and Jefferies in the US. This follows other layoffs by Goldman, Morgan Stanley and a raft of others.

Whilst unlikely to generate much sympathy amongst the wider public who blame the City for all of the current woes [Reminder - the wider public were the folks borrowing the money when they couldn't really afford it! Like a person getting drunk blaming the barman for their plight, whilst being instructed by the Government to serve drink in greater quantities i.e. do more lending to the less well off], this represent a huge downsizing in the indsutry, perhaps comparable to that which the mining industry went through in the 1980s.

Almost everybody in the City will know someone that has lost their job recently be it friends, colleagues or former colleagues. I sadly know many people in this situation, who are talented and capable people, but who have been hit by indiscriminate layoffs as a result of the scale and urgency surrounding the cuts. There are no obvious comparable roles in other sectors, assuming jobs existed, for many outside of IT whose skills may be more portable. Job insecurity is rife and there is considerable fear evident amongst those with jobs.

It's a frightening situation and may represent a permanent change to the landscape of the City and the wider economy which had come to depend upon the City for wealth creation and tax revenues.

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Cross channel shopping gets a boost from Gordon Brown

Image via WikipediaBased on today's announcement in the Queen's speech, booze cruises across the channel could see a resurgence of interest.

The proposed measures are intended to ban drink promotions in supermarkets, as part of measures to discourage alcohol abuse and drink related problems. As a consequence, retailers will not be able to offer discounts on bulk purchase of alcohol, regardless of how many a customer buys.

Hence, no more "two for ones" or "20% off if you buy six bottles" or "three bottles of wine for £10". Even multipacks of beer/lager cannot be sold for an average unit price which is less than the items are sold individually.

Most businesses are driven by volume and hence offering discounts for buying more is common-place. To remove this facility will be to the detriment of breweries, wineries and consumers alike.

The group who are expected to be hardest hit by this will be wine buyers, which was acknowledged in a Government sponsored study by the University of Sheffield.

Unless the supermarkets find a way to circumvent these measures e.g. they could drop individual prices, I suspect that the attraction of cross channel trips to France to stock up on cheap wine and beer will see renewed interest, as French retailers will not be constrained. The Euro is relatively expensive at the moment which will act as a discouragement, but it may not be a deterrent for long.

At the same time, no one will be able to consider this as a populist measure. Increasing the cost of alcohol at a time when there is increasing gloom is hardly going to cheer people up.

Microsoft's Skydrive ups free storage to 25gb + alternates

Image by via CrunchBaseMicrosoft continued their expansion of their online capabilities by increasing the free online storage limit for their Skydrive "storage in the cloud" to 25gb. This is a considerable uplift - even a year ago they were only offering 1gb.

Unfortunately, they haven't increased their individual file size limit which remains at 50mb, which is increasingly relevant eg home made video files. I realise that you can load these up to video sharing sites instead, but usually you only load finished/edited video to these sites.

Obviously this announcement has generated enormous interest in the website, with the consequence that I was only intermittently able to access the site during today, which is a little worrying - these people are supposed to also be running Azure based services for third parties [Microsoft's Cloud Computing offering], so you'd expect them to be able to handle surges on their own services! Hopefully they will address this pronto, otherwise they will not be a reliable storage choice and will undermine confidence in their abilities.

Meantime, if you're underwhelmed by 25gb for free, you can get 50gb free storage with Adrive here. Easy to use interface and I've experienced no reliability problems with them to date.

Whilst on the subject of online storage, you should also check out Gladinet, a free application which can mount your online storage locations as virtual drives on your PC and make them indistinguishable from your local folders, so long as you are connected to the internet. Whilst the new Skydrive service isn't supported [enhancement being made according to their blog], it does support many other services. However, this is not a synchronisation service - for this you need to look at services like Dropbox or Foldershare from Microsoft, albeit this is imminently due to be replaced by Microsoft Live Sync in December 2008.

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UBS switch their LSE clearing to X-Clear

Image via WikipediaIt wasn't a huge surprise to see that UBS was going to switch its' clearing for its' London Stock Exchange ["LSE"] traded equity business to the Swiss based X-Clear from LCH.Clearnet. After all,

• they are both Swiss and you should never under-estimate the power of relationships e.g. inevitably, UBS personnel will be on advisory boards at X-Clear and will be one of the largest X-Clear users in Switzerland
  
• they will probably enjoy margin netting benefits by combining their their Swiss and UK equity business at a single clearer, which will be financially beneficially
• they may enjoy cheaper tariffs or better margin rates
  

It was possible for UBS to do this after the LSE decided to allow X-Clear to offer clearing services in competition with its long-standing clearer, LCH.Clearnet. Unlike a number of its' rival exchanges including the Swiss Exchange which is part of the same group that owns X-Clear, LSE doesn't own and operate its' own clearer, with the consequence it doesn't face losing revenue from opening up this element of the trade lifecycle to competition.

However, I chuckled when reading the comment made by Robert Barnes, managing director, equities at UBS who said "that by deciding to switch to X-Clear, UBS believed that it would help accelerate a “market-driven” solution to interoperability, rather than waiting for regulators to apply further pressure to get the process moving."

Firstly, it was the LSE's decision to enable competition that allowed this to happen, albeit evidence of client support for this must have existed. Secondly, UBS are doing this for financial reasons rather than on altruisic grounds for the "good of the market". Perhaps UBS should now be using its' market clout to insist that other markets, including Switzerland and Germany, follow suit.

Steve Eisman of Front Point Partners called "spoof" on CDOs

Image by Getty Images via DaylifeMotleyFool has an interesting piece with Michael Lewis (Liars Poker fame), who talks about the huge sums Steve Eisman made for his funds by spotting the lunacy surrounding certain Collateralised Debt Obligations [CDOs] as well as Mortgage Backed Securities [MBS] and shorting them via credit default swaps. In essence, he paid a small annual premium to an investment bank as insurance against these instruments defaulting, in the expectation that they would collapse. Once these assets began to implode, the price of the CDS protection rocketed and he was able to profit, without evening having to wait for default to occur.

In the piece, Lewis recounts that

"Eisman called S&P, the ratings agency, and said, Look, I know you are rating these things AAA, and your model says they are AAA, but what happens if real estate prices go down? And the guys says, Actually there is no place in their model to put a negative number. I can't tell you what happens when real estate prices go down."

So much for stress testing.

London Scottish Bank closes

Over the weekend, London Scottish Bank was forced to close as it no longer met the FSA's threshold conditions for authorisation.

The Government has announced that no depositors will lose any money regardless of the size of their deposits, including those over the deposit protection threshold.

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Mortage backed securities are toxic

Image by Getty Images via DaylifeI'm catching up on some of the "View from the Market" videos on FT.com and just watched one featuring Chris Flanagan, who is Head of Asset-Backed research at JP Morgan.

In his first video he affirms that virtually every mortage-backed security could be classified as toxic or distressed. Prices on the triple A part of the capital structures are down to 30, 40, 50 cents on the dollar. A huge proportion of the asset-backed investor base, anywhere from 65% to 75%, is gone from the market which combined with continuing losses on mortgages is placing major downward pressure on MBS prices.

Yikes.

In a second video, he is very negative on any asset backed security that is not government backed. In his view banks holding other than government backed securities are essentially stuck with them on their balance sheet.

It's rare to find so candid a set of responses in an interview of this sort and he makes no attempt to gloss over or play-down the situation faced.

Is VOIP service EQO going off air?

Image by via CrunchBaseAlthough I've recently been using Nimbuzz on my Blackberry as my IM aggregator application because of its' inclusion of skype amongst the networks it covers, I have retained EQO as well. Whilst it performs a similar service to Nimbuzz, I much prefer the EQO interface and its superior usability.

Sadly it appears that EQO may be about to shutdown if reports on GigaOM and Techvibes are true. Having raised $13m in VC funding, it was apparently under pressure to find a buyer for the company but seemingly hasn't been successful.

I previously blogged about my use of EQO here.

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One law for one

The arrest of Damian Green MP raises many significant questions, but one wonders whether the same matters of principle regarding leaks will be applied to HM Treasury and its' Ministers.

Much of the Pre-Budget Report's contents were leaked in the weekend press ahead of Darling's speech. Reasonably to be considered price sensitive information eg Government forecasts affect share and gilt prices, these leaks surely warrant investigation on a similar basis as immigration figures.

Or are there "good" leaks and "bad" ones?

Recycled waste piles up

The economic downturn has apparently led to a big drop in demand for recycled materials such as used paper, plastic and aluminum.



The Telegraph reports today that Councils are being forced to store collected recycling materials that they can't sell on. As a result some Councils are abandoning recycling collections and withdrawing drop-off points.



At a time when enthusiasm for recycling is high and Councils have been set targets by Government, the market collapse will sadly undermine environmentally-friendly efforts.



Whilst fiscal subsidies to encourage use of recycled material could be introduced, they would be costly at a time of ballooning Government debt. Moreover, most consumption of such materials has been in China, so domestic UK subsidy would be ineffective.



Alternatively, the Government could tax non-recycled items (or those without a min recycled element e.g. 30% of packaging) to incentivise the market, under a green tax heading. Whilst fraught with compliance complications and possible unexpected outcomes, it may be essential to achieve environmental targets and reduce stockpiles.

Wheels coming off at Porsche?

Image via WikipediaPorsche on Wednesday said revenues had plunged 15 per cent in the past four months and expected revenues in the four months to the end of November to come in below €2bn ($2.6bn). It expected unit sales to fall 18 per cent in the same period.

Fortunately, it has made considerable sums from share dealing practices in VW shares that would be considered market abuse in the UK, but which apparently are perfectly acceptable in Germany. The results of this were to impose considerable losses on hedge funds, albeit it is unclear how many were forced to close as a consequence.

Is it surprising that hedge fund managers can no longer afford to buy Porsche cars as a consequence?

Free online Karoke "takes my breath away"

If you happen to be cutting back on evenings out, in favour of home entertaining, you may want to check out Lucky Voice, which provides a free online Karoke service i.e. there's no "money, money, money" involved.

It has a large collection of songs to choose from and even has "social" features on top e.g. photo sharing and favourite song lists you can share with friends.

Great idea, [but not recommended during office hours].

MFI - Gordon Brown considers a rescue

Image via WikipediaExcellent one-liner from Rory Bremner at the Insitute of Directors Dinner this week, when he suggested that Gordon Brown, the UK Prime Minister, might be tempted to rescue MFI in case he needed a new cabinet.

Ontario carpooling restrictions -

You can only gasp in amazement at the story here about the ruling handed out by an Ontario court to a web start-up designed to assist people to carpool.

No matter that Ontario allegedly wants to encourage carpooling on environmental grounds, it seems the transport companies who were behind the action think that making carpooling harder for people will shift them out of their cars onto public transport.

The PickupPal blog sets out the Ontario restrictions, which brought them into Court:

The only way you can ride with someone is if you meet ALL of the following extremely impractical set of specific criteria:

• You must travel from home to work only – (Not Home to School, or Home to the Hospital or the Airport)
• You cannot cross municipal boundaries – (Live outside the city and drive in – sorry you cannot share the ride with your neighbour)
• You must ride with the same driver each day – (Want to mix it up go with one person one day and another person another day – no sorry cannot do that – must be same person each day)
• You must pay the driver no more frequently than weekly – (Neighbour drives you to work better not pay her right away just in case she drives you later on in the week)

Unbelievable.

However, it appears even the Ontario Govt recognise the lunacy of the situation and appear to have begun the process of changing the rules.

Sadly services like this don't eliminate the concerns people have about accepting a lift from strangers, which is probably the biggest deterrent to greater take-up.

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TinyTwitter - An excellent Twitter app for the phone

Image via CrunchBaseDespite my failure to become a Twitter cult follower, a number of friends from the blogging and tech world have repeatedly nudged me to have another try.

However, each time I've tried to play with Twitter, a technology barrier impeded me. Having a blackberry, I tended to use email to interact with Twitter when on the move [avoided SMS costs!]. However, the service I began by using simply died one day [Emailtwitter]. Thereafter, several people recommended Twitterberry but having installed it, I simply couldn't get it to work on my Blackberry 8800 for inexplicable reasons.

Finally I was pointed in the direction of Tinytwitter, and if you are both a Blackberry user and Twitter fan then I recommend it. It installed easily and worked immediately. It seems very compressive and its' ease of use did encourage me to post. It's still very early days and I confess I still haven't got the Twitter bug, but maybe I'll have an epiphany sometime soon.

My Twitter id is johndwilson

vLingo - excellent Blackberry app [with unlimited data plan]

Image via WikipediaHaving seen references to Vlingo, which claimed to give BlackBerry smartphone users control over mobile information and tasks with the power of their voice, I thought I would give it a try whilst they were running a UK beta.

It was easy to install the application and it did work very well on my Blackberry 8800, with a reasonably good accuracy rate on speech to text and in following standard commands.

However, to use this service you really need to be on an unlimited data plan, as it appears that every translation involves interaction with the server across a data connection. Whilst this is understandable, I'm speculating that this will be a data hungry process [no evidence either way].

As I'm fairly quick at typing on a Blackberry , so the imperative for the application is less than it might be. However, the convenience of initiating calls, emails, sms and text entry was appealing and it quickly became something I adopted, albeit briefly. If only T-mobile UK offered an unlimited data plan, [and one that was reasonably priced], I would certainly continue to use the application. As it is, the data costs are likely to be too prohibitive relative to the value I derive.

Presently the application is free and I see from their web site that they have enabled Yahoo search within the application, which may well be generating some referral fees for the company.

The end of SWX Europe

Many years ago, I was involved during the early stages of a fledgling Recognised Investment Exchange in the UK called Tradepoint. The model it operated was revolutionary and addressed many of the flaws in the LSE operated model of the day.

They introduced the notion of clearing and a central counterparty to the UK equity market, using LCH as the operator of the arrangements. This was quite radical, monetising for the first time the inherent counterparty and market risks that went with current trading and settlement practices. Pre and post trade anonymity were side-effects of this structure and its' operation was underpinned by a reliance on electronic trading. Unfortunately, things that are now taken for granted were shunned by a market participants of the day who were happier with the status quo, prefering to ignore the risks, as well as remain inefficient.

Tradepoint had been launched with the backing of several banks, but who significantly avoided having to commit flow/liquidity to the new Exchange. As a consequence, despite being cost efficient thanks to its' technology, trading volumes were pitifully low and so it struggled in financial and credibility terms. In 1999, the business was re-financed and re-launched by a new consortium including Instinet. However, in 2000, amidst a backdrop of European Exchanges mergers & acquisitions, the Swiss Exchange bought Tradepoint and subsequently renamed it Virt-X.

In 2003, the business was finally forced to re-focuss its' efforts on the Group's key offering around Swiss stocks. Sadly, the Swiss Group this week announced the closure of SWX Europe, as the business became known.

Interesting there are many parallels between Laker Airways and today's low-cost airlines, and the link between Tradepoint and today's Multilateral Trading Facilities ["MTF"] such as Chi-X, Turquoise and BATS. Both were ahead of their time and sadly neither benefited from the revolution they foresaw.

I shall fondly remember "Tradepoint" and the contribution it made.

An astonishing pension u-turn.

Image via WikipediaThe current economic downturn is forcing business to look at all options for weathering the downturn, including corporate restructuring. However, many companies and potential acquirers of companies face the challenge of fully funding pension scheme liabilities under "Section 75" if they wish to enact changes that may imperil schems.

Introduced in 2004, it directly tackled a loophole highlighted by Maersk, the Danish shipping line, which tried to walk away from the pension liabilities of its UK subsidiary even though it remained solvent. The scenario at the time was one of plunging stock markets and falling bond yields unmasked which created huge pension deficits that were transparent to investors. Unsurprisingly, companies sought to restructure to avoid their pension responsibility and, at the time, it was estimated that about 125,000 UK pension scheme members had been affected by such moves.

Now in a bizarre about-turn by the UK Government, at a time when pension deficits are to balloon again after huge falls in stock markets, the Pensions Minister has announced a consultation process with a view to watering down the scheme. It apparently reflects concerns that Section 75 is impeding "necessary" restructuring.

For clarity, I do have considerable sympathy with companies who are impeded from introducing restructuring measures on the basis that they simply cannot fund deficits at this time - corporate borrowing is difficult enough right now, and so to be forced to use scarce funding for "non-business" purposes is a massive issue. Moreover, since Section 75 was introduced, there have been a number of examples of high profile takeovers that have fallen through because of the need to fund a pension deficit upfront e.g. Sainsbury's.

Similarly I recognise the difficult balance that exists between allowing companies to implement measures to keep a company afloat to the benefit of current stakeholders and the protection that needs to be afforded to current and future pensioners.

Nonetheless, I'd be astounded if Unions don't express their fury at such a move and it will be an interesting spectacle to see the Government defending any weakening in employee protection at a time when workers are increasingly fearful about their jobs.

Worryingly, if measures did backfire and companies exploited any changes to the detriment of pensioners as is likely, it may actually lead to more Pension schemes having to turn for funding to the Pension Protection Fund, which is funded by pension schemes via a levy.

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Recycling in London - a winner

The UK Government has announced the winner of a competition designed to find better ways that the Government could make public data available. "Show us a better way" selected 5 ideas including one which has resulted in the website "Recycle for London", which highlights places in London you can recycle and opportunities to increase your recycling.

It provides useful details about local services including opening times and materials that can be recycled.

Sadly the site seems wedded to London Borough boundaries, highlighting services that may be on the far side of your borough rather than closer ones which may cross a border into the neighbouring borough. This may be at the insistence of the Councils themselves who only want to bear the cost of their own ratepayers, or it could be poor site design. Either way, it seems at odds with energy efficiency considerations.

Full details of the competition winners were reproduced from the official site were

Ideas where we hope to create a fully working tool

• Can I Recycle It?
• UK Cycling
• Catchment Areas
• Location of Postboxes
• Loofinder

Ideas where we will develop the idea further

• Road Works API
• Oldienet
• Free Legal Web
• Allotment Manager,
• Where Does My Money Go

Prototypes we will be funding to be developed further

• UK School Maps (showing where the UK’s schools are - building on data released for the competition by the Department for Children, Schools and Families);
• School Guru, which helps determine whether your child could get into a school (in Hertfordshire only at present);
• Where’s the Path, with an Ordnance Survey map and Google Maps satellite picture of any spot; and
• UK Wreck Map, showing the location of undersea wrecks around Britain’s coast.

The fabulous thing is how the public's efforts can
- identify great ideas at little or no cost via crowdsourcing
- build useful solutions provided the data is made available from the closed data stores held by Govt at no cost

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Viewdle - Finding faces in the news

Viewdle is could be considered yet another facial recognition software offering that claims to be able to identify individuals in video for the purposes of searching and index such output. What differentiates it, is that Reuters is seemingly making use of its' capabilities to index their video output as illustrated here, which you can try out on their video archive.

This is an important area of technology given how much information is buried in newsreels as well as increasingly in video clips, and which would take considerable human effort to properly index. More significantly, this service claims to operate in real-time. This type of service would ideally benefit from being combined with a) a speech recognition engine that could also capture transcribe the audio in order to make it indexable/searchable; and b) an alerting mechanism that could notify you if relevant people/terms had been found in videos or on live tv.

Popego - An "interest platform"

Popego have tweaked an existing concept, namely that of trying to filter the noise from the web [blogs, twitter, flickr feeds, video] to hone it into a stream of things most likely to interest you. Their twist is to also apply your filters to help you find others with similar profiles.

A Techcrunch 50 finalist they are also showcasing at Le Web.

Popego automatically creates your interest profile by scanning your own digital output [blog, friendfeed, flickr, picasa, youtube......] and locating your most significant areas of interest via tags and keywords. This profile may then be finessed by increasing/decreasing the prominence of those items. Oddly, Popego only examines your shared items rather than your actual RSS subscriptions and I confess that I don't tend to use the share function.

The result of this is your own "interest feed" which serves up content that the service considers relevant to your interests.

Popego also consolidates all of your digital output for easing viewing by others and likewise allows you to view the consolidated profiles of others.

I am loathe to add to my current daily consumption of digital material but am attracted to smarter filtering of content [please filter out iPhone content!!!]. I have yet to find such a mechanism that I could overlay over Google Reader, which I am presently wedded to. Likewise I recognise it is easy to fall into a comfort zone of current sources of information rather than continually refreshing/replenishing useful sources of material.

Is this the product to satisfy that need? Sadly, I'm not convinced.

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Squareclock - 3d space planning for free

I confess to being hopeless when it comes to visualising how interiors will look, be it after decoration, home improvements or with new furnishings. Hence, I've always been drawn to any store or service provider that can provide me with actual visual mock-ups of how things are expected to look, which thankfully encompasses an increasing number of stores. The fact the architect we used last year was an "old-timer" who insisted on hand drawn plans drove me nuts - changing anything on the plans involved considerable re-work rather than a simple drag'n'drop.

So, whilst it is not unique and is unlikely to be something the average consumer would use very often, Squareclock appeals to me, allowing anyone to "design" their house project for free in 3D inside their web browser and then furnish, decorate, arrange, transform it virtually with real products and services from professionals.

The service has obvious revenue potential - paid-for version of the service for designers and architects, who in turn can encourage interior furnishing companies to host their product ranges in the galleries, with the possibility down the line of Squareclock charging for "gallery space" or charging a commission on transactions perhaps placed via the site e.g. specifications could be issued and quotes received.

Meanwhile, for those considering home improvements [now that you can no longer sell your house or afford to move], this might be an ideal sketch pad to outline your ideas and create your own grand designs.

Zipiko - meeting friends made easy

Zipiko is a new approach to arranging meet-ups with friends that I can imagine catching on, which is showcasing at Le Web.

In concept it is very similar to Upcoming.org or even Meetup in that it is orientated around the notion of publishing events which your friends can see. The service is free [no ads spotted either] and is entirely web-hosted.

Members set up an event, detailing time and place plus comments. Thereafter friends can either be specifically invited or the event made public amongst your friends who can choose to participate in the open invite. Hence you can see events that your friends are organising and elect to opt in e.g. join your friends to watch the rugby in the pub.

I found that setting up an event was very easy and intutitive, via the simple online interface. Likewise, inviting friends was very easy. Interestingly the service currently send free SMS messages or emails to invite people, as well as notifying you of their responses.

To add friends to your account, you have the option of importing your phone contacts as well as importing contact from Gmail. Any friends you do add have to positively accept your invite to connect. I confess that didn't find either appealing since my address books co-mingle friends and business contacts. I think they should definitely be looking to add the capability to import contacts from services like Facebook, Twitter etc and you can buy code to do this off the shelf these days for less than $100.

The site claims it has been configured to be easy to use via mobile phone and a brief check on my own Blackberry phone browser did confirm this.

Connecting your events to your calendar is possible albeit only 30 Boxes appeared to be supported when I tried.

Whilst I understand that the team behind this are keen that you regularly use their site, I think the service would benefit from creating an ical feed of events from your "crowd" that could be accessible by calendar applications, with entries that link back to the Zipiko site. I say this because Gmail and Google calendar are two webapps I use constantly whereas I am initially less likely to have Zipiko open constantly. Likewise, it would be great if you could "send an calendar invite" to your own Zipiko account from say Google calendar to be added to the events list.

Worth trying when organising your next social meetup.

Bremner, Bird & Fortune do it again

I highly recommend you watch this excellent episode of Silly Money by Bremner, Bird & Fortune. 48 mins in length but well worth watching all the way through as the team discuss recent market events.

Porsche's cornering puts the skids on the market

Image via WikipediaA tremendous amount of glee seemed to greet the news that Porsche had "outwitted" hedge fund managers and profited enormously from squeezing short sellers in VW stock.

On October 26th Porsche announced it owned nearly 43% of VW’s shares outright, up from 35% and had derivative contracts [options] on nearly 32% more. That meant it had tied up almost all of the freely available shares (the rest are held by the state government and index funds).

The car manufacturer had executed a classic squeeze by controlling a huge portion of the free float [available] stock in the market, leaving short sellers unable to borrow stock to cover their positions and thus leaving them scrambling for stock at any price to cover their positions. In doing so, VW briefly became the most "valuable" company in the world and Porsche may have made paper gains of €30 billion-40 billion according to the Economist. Not bad considering Porsche had a market value of €4 billion.

That a symbol of Germany industry pulled off such a stunt is apparently a great thing. But consider had the same strategy been executed by a hedge fund or a bank. It is inconceivable that the reaction would have been the same. Instead there would have been outpourings of hatred for a demonstrable case of market manipulation that led to great instability in the markets and undermined indices.

Astonishingly no German laws were broken, yet the concealment of such stake building is something that only this week the FSA has been praised for tackling, albeit to only a partial degree. On Thursday, the City watchdog announced existing share and contracts for difference holdings, in the same company, should be aggregated for disclosure purposes in order to address concerns in relation to voting rights and corporate influence. The existing regulations already include provision to cover disclosure of entitlements to acquire voting rights resulting from holding financial instruments, including transferable securities and options, futures, swaps, forward rate agreements and any other derivative contract referred to in Section C of Annex 1 of the Market in Financial Instruments Directive (MiFID) ( as per Disclosure and Transparency Rules 5.3.2).

Hence in the UK, Porsche would have been required to disclose its' aggregate build up of an interest in VW, including the options component. As the FSA stresses, the purpose of such disclosure rules is to avoid perceived market failures.

The German regulator, Bafin, has confirmed it will investigate the events relating to the sharp movements in VW shares to establish whether there was any market manipulations. I believe that a failure by Bafin to take action, or at least redraw the rules to bring Germany's rules into line with London, will be viewed poorly in international capital markets.

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I haven't fallen into a dark pool [of shares]

It was an easy mistake for those kind enough to send me congratulations to make - but sadly I'm not the John Wilson that has just been appointed to be the CEO of Baikal, the London Stock Exchange venture which plans to launch a dark pool for pan-European equities trading.

The future of the Baikal project has been in doubt following the collapse of the LSE's former joint venture partner Lehman Brothers. Planned to launch in early 2009, Baikal was going to utilise Lehman Brothers technology.

Apparently my namesake had previously served on the executive committees for both equities and fixed income and as head of equity and fixed income research at Lehman Brothers.

Good luck John Wilson.

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Legg Mason undone by money funds

Image via WikipediaHaving pumped $2bn into their money funds within the last 12 months, Legg Mason's share price fell 78% over the same period and in the last quarter its' assets under management have fallen by a further 9% to $842bn.

Aside from money market fund troubles, their former star equity chief Bill Miller who outperformed the market for 15 years from 1991 has seen big reversals in the last few years in his main fund, "Legg Mason Value Trust". Between Jan-Jun 2008 it fell by over 28% and its' 10 year performance to Jun 2008 was lower than the S&P500.

Legg Mason operates funds under a range of brands operated by semi-autonomous fund management subsidiaries that tend to specialise in particular asset classes e.g. Western focusses on fixed income.

The Legg Mason sales and distribution teams will have a considerable uphill struggle to maintain existing business, let alone secure new wins. Their saving grace may be their ability to push product from other brands in their stable that have performed better and which have not been "tainted" with the current problems.