Member Info for Love_You

Took a look at Kier's financial statements.

They owe suppliers £1.25 Billion (under current liabilities).

I really hope that everyone who is owed money by them gets paid.

Does anyone know if everyone who was owed money by Carillion, Interserve etc. got paid?

If there are more competent people at a lower level than director level - and Directors are paid 43 times the median employee wage in the UK - then you have a problem. I.e. There is a huge incentive for the more competent people to leave and set up their own rival business - and the rival business will win because its directors are the more competent ones. What should really happen is that the directors of the old business are able to recognise prodigious/precocious talent lower down the company and resign their own position in order to promote the talent to Director level. This is what would be of benefit to shareholders. However, shareholders often do not have enough voting rights/power to get rid of directors who would prefer to be self-serving rather than to act in the best interests of shareholders. Hence if a director recognises there is a more talented person in a management position then they probably think screw the shareholders - currently I am getting 43 times the median employee's salary. However, if I resign and allow the more talented person to take my place (which would benefit shareholders) then at best I will end up with some management position where I am on 3 times the median employee's salary. Hence the financial incentives are for directors to be self-serving and not to serve the interests of shareholders.

Hence, whoever said QE and 0.5% interest rates only delayed a huge issue in markets (and didn't solve it) I would agree with. The issue is that the incentives are very strongly in favour of talent not being able to make it to the top - hence there will be an awful lot of internal squabbling and politicking within companies - all of which is wasted energy in the eyes of shareholders as this internal squabbling does nothing to generate positive returns and to grow the overall business (which is what would be of benefit to shareholders).

Oh stop talking of Lobster WGR - now I'm going to have to dream of getting on board my private jet and flying to the East coast of North America for a decent Lobster. Why did they have to retire Concorde? However, with a decent private jet Mach 1.8 cruising can still be achieved. Hence with the time difference I can set off at 1pm - eat my lunch on the East of Vermont at 12:30pm. And then be back in the UK in good time for bed at 10pm.

Cereus you really shouldn't worry about burning fossil fuels. Don't you know that plants convert carbon dioxide back into oxygen? Hence really every time you take a flight or drive a Ferrari you are making all the plants in the world a little happier as you are making it a little easier for them to live and to grow.

Don't take things so seriously cereus!

I was just pointing out that you got a cheap price given the costs involved in producing those potatoes and making them available to you. And I hope you enjoyed them. Very happy that you got a good price!

I agree WGR that there seems far too little farming going on in the UK. France seems much more active in terms of food production - ergo it is no surprise the food seems better quality (and no more expensive) in France.

Imagine the horror story the last ten years have been if you've been a Deutsche Bank Sharehiolder

https://uk.finance.yahoo.com/news/deutsche-bank-chairman-survives-vote-172716641.html

It just goes to show executives don't have a clue about the future. Every interview I've ever read with the CEO of Deutsche has been saying how they are turning things around and the profits will be better in a few years. They've been saying that for ten years and generally the ten-year trend has been decreasing profitability. At some point one wonders (or I do at least) whether the CEO really believes what they are saying - or are they just saying profits will be better in a couple of years because they're not honest enough to tell investors what is really going on and perhaps how difficult it will be to fix?

https://uk.finance.yahoo.com/news/deutsche-bank-chairman-survives-vote-172716641.html

Hi Calisto,

You have your view, I have mine. And I have my own personal experience, which I have related to you truthfully. However, I do not know of your own personal experiences in life - although I'd be interested to hear about them.

In my opinion Help-to-Buy was a market distorting scheme as instead of letting the housing market find a true level this scheme was only ever going to lead to prices being pushed upwards as it allowed people to borrow more than they could afford to under the "non-distorted" system.

I will ignore your left-wing comment as I don't feel it's fair. However, I do know there are many people like myself who probably won't be able to afford a house until UK house prices fall by 40%. Make what you will of that info. Have a nice day!

Sad to see this bypass shelved.

https://www.bbc.co.uk/news/uk-wales-48512697

At the end of the day it would have made road travel safer in this area (more space between vehicles). It would also have reduced emissions by meaning vehicles would need to spend significantly less time sitting in traffic jams in this area.

Yes, there are a few negatives to this new road but mainly I suspect it is because people are worried about the value of their houses if the new road is within half a mile of their house. Due to the small number of houses affected it would easily have been possible to have offered anyone who felt they would be better off moving to somewhere else the chance to do this at a price with a bit of cash left over to compensate them for their trouble.

However, the decision should of been "IN THE PUBLIC INTEREST".

If the benefits of this bypass were going to accrue to millions of people, and only a very small number would be affected (and could have been easily compensated), then the public interest was clearly in favour of the bypass going ahead.

https://www.bbc.co.uk/news/uk-wales-48512697

A sad day when a few people can't see that we live in a society - this means that you can't just not do anything because a few people object if the scheme would benefit millions of other people - at the end of the day the people whom it would benefit have as much right to benefit as the people to whom object. And as those who would benefit number in the millions, and those who would object strongly number in the hundreds, then clearly there was a massive public interest in building this bypass.

I can't say I have any sympathy for Woodford.

I think the correct position on Barratt is short, not long.

My life has been ruined by high housing costs in the UK. The people who are trying to push up housing costs are making themselves direct enemies of mine. All I've wanted for ten years is a house and despite having great qualifications and some above median paying jobs I've never been able to afford a house as my life choice has been to remain single (never found that special someone) and so I've never had a joint income to get a mortgage.

However, if you want a fairly normal, middle-of-the-road, person like myself in the UK to vote for the government, then I'll only do so if housing costs become affordable, this means investment managers need to short the housebuilders and increase competition in the building sector in order to bring house prices down by 40%.

Otherwise people like me won't vote for a government that doesn't care about them.

So regarding your point about people who are property rich but cash poor. My own view is that they need to make a deal with someone. I am young, fit, healthy, clever, ambitious - and in need of land. I am willing to share the returns I make from the use of that land in a very reasonable manner with the owner of the land? Has anyone got a decent sized chunk of land suitable for soft-fruit farming - and would they be willing to go into business with me?

Also, the PC Media are extremely annoying as it should be each citizens right to seek economic advancement if they so wish. People have the right to choose to be productive - but people shouldn't have the right to try and stop other people from being productive. Hence when I see protestors I personally think they are being incredibly selfish in their behaviour. Why on Earth would they think they have the right to stop other people from extracting oil or from building tidal power plants or from building Ferraris with 6 litre engines? I don't try and stop Tesla from producing electric cars even though I have no desire to drive a Tesla because I personally find the driving experience rubbish compared to a Porsche or a Ferrari etc. Hence my own viewpoint is that Central Banks need to emphasise that everyone has the right to be productive - because that is how wealth is created and then distributed through taxation - but to give people the right to stop other people from being productive seems like a wrong moral/ethical choice to me. What do you think?

In truth WGR I just think I am beginning to see that a lot of behaviour is culturally based or based around trying to copy role models or prototypes for the life they want to lead - i.e. someone has the idea to become a doctor when they are 13 for example, ergo they need to then get As at GCSE, A's at A-Level, do some work experience/mix with healthcare professionals (to improve their chances of interviewing well), then they need to get into medical school, then they need to work hard and pass all their exams. And to be honest it makes it very difficult for the economy to adjust - for if there is a shortage of workers in the oil industry for example then how many medical students who are say 2 years into their degree would give up that because the oil industry was offering them a fantastic salary of £150,000 basic with loads of perks, travel expenses, free healthcare, and generous pensions.

So if the economy can't easily adjust through price incentives then the economy is not going to provide a very high standard of living for the majority of people.

Sadly after studying behavioural economics and markets for the past 15 years I am of the opinion that most people are far less likely to change their behaviour due to financial incentives than most economic planners/managers seem to think. Ergo the economy is what it is ..... not really providing anywhere near what it could do if one imagines a world where the Central Bank is a benign institution genuinely focused on maximising people's living standards ...and where citizens are all rational and price sensitive in their behaviours.

Shouldn't Kier be offering to help out the UK government by building the replacement nuclear power station on Anglesey (the replacement for Wylfa)? Now that the Japanese and Koreans have both pulled out (and does this suggest the UK is somewhere people want to do business?). Need to actually get people building a productive future rather than trousering very generous salaries for almost no productive work. Not that I'm particularly in favour of nuclear power - think a mixture of gas-fired new power-stations along with tidal power would be best options for future of energy in the UK. However, I'm not beholden to any one viewpoint or belief-system - other that if we all cooperate together we can all live to a far higher standard of living than a group of people who can't cooperate because they refuse to allow themselves to compromise and to learn from cradle to grave.

Trouble is my funding has recently been cut - even though I was just about to start my most interesting and economically useful research over the next two years (which now won't happen, or may not happen unless the Vice Chancellor themselves supports me which would mean upsetting a few faces lower down in the university food chain). However, I do think the research I've proposed would be incredibly illuminating to all those interested in behavioural economics as I'm trying to combine an understanding of the effects of different types of delayed gratification, with the distribution within society of individual discount rates (what investment return is needed for different individuals to induce investment behaviour), along with better understanding the distribution within society of the propensity to cooperate on projects which have a "public good" element such as street-lighting, renewable energy, infrastructure development and upgrading, future-proofing water supplies etc.

I have already read a lot of this research as various angles on behavioural economics has been what I have been studying within five different UK universities since 2004!

Trouble is my funding has recently been cut - even though I was just about to start my most interesting and economically useful research over the next two years (which now won't happen, or may not happen unless the Vice Chancellor themselves supports me which would mean upsetting a few faces lower down in the university food chain). However, I do think the research I've proposed would be incredibly illuminating to all those interested in behavioural economics as I'm trying to combine an understanding of the effects of different types of delayed gratification, with the distribution within society of individual discount rates (what investment return is needed for different individuals to induce investment behaviour), along with better understanding the distribution within society of the propensity to cooperate on projects which has a "public good" element such as streetlighting, renewable energy, and things like future-proofing water supplies etc.

Deliberate mis-pricing as in loss leaders, paper-thin margins which are way too risky (as to expect cost overruns is reasonable), and also a lot of offers are a form of social engineering. For example buy-one-get-one-free distorts the market towards larger family sizes (if you are a smaller family then maybe you won't have time to eat the other half of the buy-one-get-one-free offer). Likewise have you noticed how sometimes a 100g tin is priced at £1 and a 50g tin is priced at 85p. This is clearly a nonsense in a market economy as there is no way the cost of the aluminium tin accounts for the disproportionate levels compared to genuine pro-rata pricing. Likewise people should pay for the energy they use - the price cap just enables someone who owns a 30 bed mansion to have subsidised energy costs compared to someone who lives in a well-insulated, double wooden-clad, three-bed semi.

Well you partly need to ask whether it was a good idea of David Cameron's to cut the police by 30,000, and reduce their pay compared to true inflation (which generally always annoys people)?

It's obvious this would encourage gangs etc. - Yet the current government under Theresa May denies there is any link between police cuts and a rise in knife crime, county line gangs, and white-collar financial fraud including deliberate mis-pricing at executive levels of major companies.

It wouldn't be so risky if Directors ensured employee decisions were a bit more sensible. The point being that oil comes out of the ground for a far lower cost than the wealth it generates in value-added activities within society. Ergo most companies could make growing profits for decades if they didn't try risky strategies such as selling products at a loss to grow market share in the short term. For example look at Tesco's - selling Jersey Royal potatoes for 49p a bag must be loss-making - is using a strategy of loss leaders really an appropriate business model?

Re: Cereus on Tesco's board.

So what was the cost of ploughing the field, planting those seed potatoes, fertilising them, waiting for them to grow, suffering some losses due to pests/weather, harvesting them, washing them, packaging them, and hiring lorries to transport them to your local supermarket, and paying the Tesco staff also to ensure nobody stole them before Cereus could buy those Jersey Royal potatoes - also if you're in the North of England think how much more the transport costs would be for those potatoes if they came all the way from the South of England (where I believe fruit and veg grow the best).

So, Cereus, how much did it cost to produce that bag of potatoes and to store it until the customer bough it?

It must be the easiest job in the world to be a price setter at a company as nobody really cares anymore whether you are selling products at a loss or a profit (the same for contracts such as when Kier takes on work - many contracts are priced so they will end up being loss making and nobody really cares). Yet the employees still gets paid ...clearly being a price setter was a job for me as I like drawing on all the cost inputs/fundamental analysis/predicting likely future cost overruns to ensure that the prices/contracts are overall profitable at the end of the day (how else can a capitalist economy function?)

UK in a pretty bad way - shareholders maybe going to see most equity value destroyed in everything other than Dollar-earning companies (depreciating pound will keep value in these even as it is lost everywhere else).

Anyway UK in a pretty bad way - shareholders seem to be losing all over the place the past few years. Look at the fall in value of Marks and Spencer - that is pretty disgraceful management happening over there. But it's everywhere, Debenhams equity destroyed, Flybe equity destroyed, Serco equity haircut, Interserve equity destroyed, Capita equity haircut, Vodafone down 40% past year, Enquest equity down 80% since they invested in growth instead of battoning down the hatches, RBS now at 21.3p in the old money after they were £6 in 2007. Patisserie Valerie wiped out equity holders. So many other sad tales to tell … markets becoming a big problem for fairness and trust within UK society.

I have seen Kier doing some work locally. Due to the type of work they are doing I am worried that they will find it difficult to make any profit. Too many companies these days are willing to price work at paper thin margins to help out local councils or mates at other companies/on other projects -- shareholders seem the last concern of Directors these days. Very sad times we are living through where everyone is seen as deserving of a profit and good benefits except for shareholders (what have shareholders done wrong?)

Oh yes, the main point being is that when companies price contracts at paper-thin margins (Capital, Serco, Interserve, Kier, etc.) then when there are inevitable cost overruns (always happens in construction and services) then these contracts inevitably become loss-making.

Crowcast and others will respond more to previous points after a cup of tea.

However I have another point to make first.