Another bubble?

Interesting piece here on reviewing recent valuations of social media firms.

My interest was immediately piqued by the introduction to the article : ‘Traditional metrics are no longer valid when it comes to measuring the value of the new breed of social media companies’, which then goes on to review the valuations placed on four social media firms – with more to come – as a result of stock market flotations. The key quotes come via a ‘technology valuation expert’ at a major firm of accountants troubled by an overlong name and a 90s-oriented obsession with marketing, with the article highlighting that:

…traditional metrics like price-to-earnings ratios do not apply when it comes to social media companies, which tend to prioritise growth over earnings. PwC suggests that a ‘value per user’ metric is more appropriate for these companies, “on the presumption that subscriber bases can eventually be monetised”.

At that point, I had a severe touch of déjà vu, since this is more or less precisely the (ir)rationale which led to the over-inflated values of internet firms being a contributory factor in crashes in stock markets at the turn of the last decade. In short: we’ll throw out tried and trusted means of valuing firms because we fancy gambling your money, pensions, etc. on something new and sexy which we don’t quite understand but which we hope will come good. Markets evidently don’t function in cases of imperfect information – but let’s at least hold this sort of rubbish up to the ill-informed gamble that it is.

Add in the prospect of rising interest rates and a stagnant FTSE100 over the last six months (and a Nasdaq that seems to be in a similar place) and we have at least some of the conditions of 2000’s implosion in place all over again. Oil prices which seem to be rising again following the correction of early May, stubbornly high inflation, a weak economy heading for another ‘soft patch’ and a government whose economic ‘education’ is firmly in the traditions of Alfred Roberts’s Grantham corner shop all add to the pressures.

An unreformed, business as usual capitalism is not only free, but destined, to repeat the same mistakes over and over again. That it seems to be doing so with such a velocity is something of a surprise, but this is perhaps a corollary of governments’ apparent collective refusal to contemplate systemic change, as well as our dependency on financial services and the associated structural problems of the UK economy (on which Larry Elliott had some interesting things to say in yesterday’s The Guardian). An economy so dependent on financial services seems to me to be not only in thrall to the City but also thereby blinded to the problems which imperfect information causes to market-based systems. Until we grapple with that, the economy isn’t going to get better.


Looking forward, looking back

The eventual arrest and appearance in court in Serbia today of Ratko Mladić does indeed put a bookmark in the pages of history.

Looking forward, the lesson is clear that justice does – eventually – catch up with war criminals. The survivors of Srebrenica can look forward to justice being served on the part of loved ones casually murdered by Mladić’s troops – and to rape as a weapon of war getting a full examination in court. Serbia can look forward to claiming its place in European political structures and we can anticipate the anti-war aims of the original European Union claiming further territory albeit, in this case, twenty years too late to be of practical use to Yugoslavians.

Whatever the suspicions over the timing of the arrest, the last of the official, unofficial and private support structures that had sustained Mladić over fifteen years on the run had clearly fallen away. He might appear weak and unrecognisable as a result of an apparent stroke – but his adopted name, and his place of residence, hardly provided concealment (unlike, for example, the disguise adopted by Karadžić). Here, the conclusions of the investigation promised by Serbian President Boris Tadić will be interesting. There is an interest in bringing Mladić quickly to justice and, once the legal debates over his extradition have been observed, the court prosecutors at the ICTY clearly need to move quickly given Mladić’s apparently poor state of health. We don’t want another Milošević.

Karadžić’s repeated assertion today about working with Mladić’s legal team to ‘bring out the truth’ of what happened in Bosnia is one to anticipate. Foreign Secretary Hague’s warm words today were welcome, but he should not forget that the equivocation displayed by one of his predecessors in the post over a period of time was an unconscionable act of betrayal which gave a green light to Mladić and the rest of the Bosnian Serbs and which resulted in the Bosnian government accusing Hurd of being an accomplice to genocide. Britain’s Unfinest Hour, indeed.

The Debutante

I’m evidently not part of the recognised demographic for contemporary women’s fiction, but I did pick up Kathleen Tessaro’s fourth novel, The Debutante.

What I found was an intriguing novel combining a historical romance with a study of the complexities of modern relationships; the former taking the shape of a mystery prosecuted by the protagonists in the latter. The present-day events take place against a backdrop of a series of letters written by the eponymous deb which both feed off, and into, each other. Wisely, however, the author doesn’t overplay the theme of how the past influences the future, or of how human beings are condemned to repeat the mistakes of the past. What we are left with is how an understanding of the past helps us understand the scope of some of the current day problems that we face, and to reconcile them, while Tessaro explores well her theme of the importance in our own appreciation of ourselves, and of our worth, of the role played by how we perceive that others see us.

The novel is well structured and the plot device which prompts the mystery is a clever one. Tessaro has done much research into the physical settings and the period detail, including the content of the letters, is accurately observed, the letters particularly being a delight. The resolution of the historical romance is utterly believable (prompted, as the author explains in a Note, by some contemporary events occurring as she was writing the novel) and symptomatic of the social mores of the upper classes; the conclusion of the modern day romance perhaps less so, although only those hard of heart could resist the novel’s closing words.

Letting the novel down, however, are several – really quite essential – things. Firstly, I found it hard to believe that the sisters’ Dublin and familial origins would have allowed them to be so readily accepted into London society of the 1920s and 30s. Secondly, the author’s treatment of the characters in the modern day romance frequently casts them into states of limbo. This is not just a failure of dialogue, which is of inconsistent quality – occasionally sparkling but all too frequently curiously mundane and stilted – but also the outcome of an author who is too heavy-handed with her characters. Thirdly, and most critically, the writing style is also inconsistent, the author sometimes coming up with a tone and phrasing exhibiting warmth and clarity – not least around her theme – but lapsing into stock phrases, unchallenging similes and jarring cliché (the motor car as sexual metaphor being a particularly obvious example), while she is also guilty of inconsequential narration. Some of the mistakes could have been erased with a stronger editing hand – less is more – but this is the author’s fourth book and some of these ought not, by this stage, to be present in her approach.

So, a page-turner as regards the mystery aspects and the theme, but a few regrets over the manner of the journey.

It ain’t over til it’s over…

and other sporting cliches such as it’s only yet half-time, all to play for in the second leg, the lads needed just a bit more luck in front of goal, etc. etc…

Travelling back from Belfast yesterday from a pensions seminar with @porawe and others, I finally pitched up for the game (or, at least, the second half of the first half) at the Sports Bar in Stirling, a late-running train having made me miss a connection for Perth. This was a slightly surreal experience since, despite the name, and no less than at least 300 TV screens scattered around the pub,* the staff were getting ready for Stirling’s Friday night disco crowd and all the sound from the TVs was off in favour of some bangin’ tunes. Still, at least that meant I missed the probably rather inane ramblings of Neil ‘Colin’ Warnock and Aidy Boothroyd (and where indeed, @kmflett, was rising star Robbie Savage?), to say nothing of the Sky commentary team (whose cliche-ridden post-match interviews (which I heard via the technological magic of my son’s mobile phone pressed up close to his TV set) owed all to standard pre-prepared patter rather than the evidence of the game just witnessed). Safely esconced in a more or less private annexe I could, and indeed did, supply my own commentary where there was no need to apologise for language used in the heat of the moment… (And a serious ‘thanks’ to the staff and other customers for their indulgence of the madman in the corner!)

It is indeed only half-time and, while we may yet come to regret missed opportunities, especially in that first half period subsequent to Bellamy’s departure when we had something like 70% of the possession and Cardiff could barely get out of their own half, I’m confident enough about the performance the mighty Royals put on to think we can do a job down in Cardiff: certainly the Cardiff players know they took a beating last night and, although they may well play better at home – they surely couldn’t play any worse – I reckon we should still have their measure. Certainly the start will be absolutely critical: a good one will add to the existing pressure on the Cardiff players who will have to come out and play a bit of football on Tuesday night rather than hold out for another 0-0. And the prospect of the god-like genius that is Jimmy Kébé finally being unleashed in those circumstances in this year’s play-offs is a mouth-watering one (as well as his replacement, @Hal_RK played last night).

I’m missing the second leg, too – another story involving a train and a work trip. It’s probably a good omen – and I’m definitely hopeful.

* I may be exaggerating a little

FA does, well, sweet FA

So QPR have been declared champions following a steady drip-drip of poorly-timed information today from the FA that, no, there would be no points deduction; and then, oh actually, there’ll be an £875,000 fine. Bearing in mind that the club is owned by Bernie Ecclestone, Lakshmi Mittal and a further billionaire whose name escapes me offhand, the fine is very small indeed: akin to a mugger leaving you with your spanking new smartphone but nicking your small change to make a phone call.

Fair enough, QPR have been a decent side this season, and worthy of promotion on the basis of the on-the-pitch stuff, even if they’ve been pretty average over the second half of the season. And I really don’t know whether they’re guilty or not over Faurlingate.

Of the seven charges they faced, to be found guilty of using an unauthorised agent and of bringing the game into disrepute, with the rest of the charges not proven, is pretty small beer compared to the points deductions that were being spoken about, and from serious sources too. Conspiracy theorists might well debate the role of the depths of the pockets of the FA and of the owners of QPR in the decision, as well as the role of the apparent leaking of the FA’s view as to what might happen if the club were guilty, and conclude that football wants to have in the top division those clubs whose owners have deep pockets, especially given the treatment of Luton for a similar offence (although the two situations are not really analogous). Money talks – and welcome to the money game that football has become.

But here’s what I don’t understand – bringing the game into disrepute is surely a back-up charge: it follows on from the others. Being found guilty of only that is, in the context, a little like being charged with shoplifting from Tesco but only actually being found guilty of stealing the carrier bag you took the goods away in. Surely, there can be no question of the club having brought the game into disrepute unless they were actually guilty of having committed at least some of the other charges on the sheet. Publicising having spent £3.5m on a player but with the player’s club not having received a penny seems to resemble ‘Entering contracts assigning rights to or making payments to a third party in connection with a player transfer’ pretty closely.

Otherwise, the inescapable conclusion is that the only organisation having actually brought the game into disrepute in this whole sorry episode is the sweet FA itself.


This is a dark ride.

Rose Tremain‘s eleventh novel – longlisted for last year’s Man Booker – is a succinctly-named novel whose central theme operates on several different levels: trespass of people against each other, both of one generation on the next and among peers, leading to possession of one by another; of new ideas and ways on old ones; of one culture on another; and of people against nature. With each form of trespass must come a penalty, and the taking of recompense, if reconciliation, reclamation and redemption – or, at least, some form of accommodation – is to be the result.

Ms Tremain has succeeded in producing an enduring, engrossing novel despite three of the four central human characters – two sets of brother and sister siblings with a very different relationship, but who share in common the dysfunctional effects of appallingly neglectful parenting – having few redeeming features: only one appears in any way sympathetic and the actions of this one character raise interesting moral questions. All the major characters are well-drawn, including with the use of savage humour, while it is a particular skill to make the reader feel active dislike for long-dead characters who appear in the novel only indirectly, as a result of the back stories of those who do. Nevertheless, the novel is a timely reminder that flawed humans are all victims, whatever they do to each other as a result of the scars that they carry.

The telling of the tale is accomplished and rounded, with few unresolved threads, as well as being largely taut, tense and with an ending whose nature is obscure deep into the final stages of the work. I have a couple of quibbles about the writing style – there is a conversational tone to some parts of the writing, which is strangely at odds with the theme; while I also have an antipathy to the parenthetical dropping of occasional foreign language words into direct speech to remind us that the speaker is a native of another country. However, the theme is otherwise extremely and thought-provokingly well-executed, evocative and with careful attention to detail not least with regard to nature which is itself a major character in the work.

A punchy and resonant read.

AV? No thanks!

A couple of pieces I saw this week piqued my interest in advance of next week’s vote. Firstly, Compass‘s Joe Cox and Tom Griffin argue that a yes vote is the best means of frustrating the policies of the coalition government (Martin Kettle has also argued similarly); while Hilary Wainwright argues in The Guardian that AV will not only improve the quality of political debate but will symbolise a vote for change.

I start from an interest in, and support for, electoral reform, but I just can’t bring myself to vote for AV. I’m not convinced that short-term political interests are worthy reasons to bring in this famously ‘miserable compromise’ as a new voting system, although I can of course see the tactical reasons for that; and neither am I at all convinced that AV is a much-needed ‘baby step‘ towards a better electoral system than the one we have already. This is a mature democracy and one in which, furthermore, we already have proportional representation voting systems in place, both for elections to the European Parliament and, up here in Scotland, to the Scottish Parliament – so it’s not as though we’re actually in need of something which helps us dip our toes in the water of electoral reform. And neither are we in need of being patronised, either.

We’re not being asked to vote for electoral reform based on proportional representation, we’re only being asked to vote for one, and one only, variant of electoral reform. It’s not a starting point for a wider debate about electoral reform; it’s an end point – not the end, obviously, but an end. People who argue that electoral reform might evolve into a better voting system if only we first took the opportunity to implement AV are surely deluding themselves: I can’t see the electorate having much of an appetite for repeating this embarrassing slanging-match-passing-as-political-debate in the forseeable future. This is not a situation of ‘vote yes to AV – get electoral reform’: voting yes to AV means the alternative vote is exactly what we get. And neither do I want to imagine that what was offered to the LibDems as a price of getting them to support the Tories in government is, in this area and for the foreseeable future, debate-defining.

For all its faults, first past the post is based on the principle of one person one vote. Every vote counts, and counts once (pace Tammany Hall). That’s the crux of my opposition to AV – some electors, but not all of them, get a second bite at the cherry when their candidate falls. That doesn’t strike me as at all in line with democratic principles – and neither does it strike me as at all rational: the people whose alternative votes are deployed are the ones who have voted, in order, for the weakest (and not only the wackiest), fringe-like candidate(s). That’s simply not credible. It’s not about candidates ‘pandering to extremists‘ but it does give a potentially determining power to those who vote for small parties and, in the first place, only to the voters of such parties. I can fully envisage some unholy scenarios of how that might pan out in practice and I can’t understand why I’d want to vote for that.

Abstentionism has never been my tradition, so I’ll be putting my ‘x’ firmly in the ‘no’ box next Thursday. Given who I will then be allying myself with, though, I will be washing my hands very thoroughly afterwards…

And then, once AV is dead and buried, the campaign for proper electoral reform goes on.