Evil discusses Greece, Oxus, Foxtons and Beximco Pharma…
Readers will recall that last Monday, 26th January, I offered my opinion that the Greeks, as an electorate, have justly and by implication wisely decided to welsh on debts to the ECB or, put another way, Germany. I put this to my Greek contact, Stavros (no relation of Harry Enfield), and he robustly counters as follows:
“Dearest (sic) Simon,
No I do not agree.
We Greeks were all for hosting the Olympic games…..regardless of the price tag involved, which kept inflating….. We were all for that rotten to the core policy of the welfare state…..(for) which for years our governments just kept borrowing money (from predatory banks to be sure) to pay for outrageous pensions and benefits to their clienteles within a bloated public sector (= the overstaffed bureacracy along with hundreds of useless quangos) all fervently supported by a multitude of vociferous trade unionists and the scores of their populist and left wing advocates. We keep clamouring about our perennial “threat from the East” security dogma – not once questioning its validity so to justify this country’s immense defence budgets (per capita the largest in NATO) to pay for hardware (some never deployed) via multi-billion euro deals which bought generals and admirals their toys to keep them happy, but (courtesy of German, Italian….and even British, arm manufacturers) lined the pockets of politicos who smoothed these deals into existence.
I can go on and on, but I think you catch my drift. We, as a society, are the ones who are responsible for our fiscal profligacy. And so to ask the EU and national powers that be, for European taxpayers (because they are the ones to whom we owe the bulk of our national debt) to forgive our vanity, our wastefulness and our corruption (Transparency International has Greece at the very bottom of their list of EU countries) by writing off our pile of debt…..and to do so without continuing the effort at least some of us have made to put our house in order, to stop borrowing and to start repayments (even token ones), seems to me either the height of stupidity or, at the very least, an affront to their own taxpayers.
The American writer H.L. Mencken wrote somewhere that….. “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” So the Greek electorate and its newly formed neo-communist cum populist government, which was elected via a promise to write off this debt and to relax addressing the reasons which got us in this mess, should not only get it “good and hard” but also understand where it is getting it from. Otherwise the EU and its much vaunted member solidarity principles will show themselves to be nothing but unmitigated shams.
Well, Stavros and I are agreed on one thing: the ECB and its mates are unmitigated shams. However, I am unaltered on my view that the ECB must have known that they were lending money to the crooks that were, and possibly remain, the Greek government and where the ECB expects the average Greek to foot the bill. In these circumstances the average Greek is not liable. Discuss if you will and then surrender. (The principle adduced from English law is that the loan contract was wholly or partially tainted ab initio.)
(Stavros’s two delightful daughters have lunched with me and my wife here in London. I expect they’ll pick up husbands. Had they stayed in Athens they might have found themselves unmarried at the point of Stavros’s death and thus eligible for pensions for life. I am not making this up. Also, it is possible for a teacher to retire on a full pension aged just 52. The ECB knew this and still lent. Oh Deary Deary Me.)
Oxus (OXS) have terminated their financing agreement with Darwin. This may be because there is a cheaper way of raising fresh equity whose purpose is merely to keep the show on the road. Or it may be that Oxus’s Mr Shead reckons a cash flow positive deal with the Uzbeks is imminent. It is legitimate to dream.
Foxtons (FOXT) went back up to 180p on a relief rally pursuant to a trading statement. They promulgated the notion that although residential sales are slow the management department is rocking along. Rock along it may but not such that the share price can be supported at this level. I would stay short.
Beximco (BXP) have borrowed $52m from some German outfit at 2.25% p.a. (plus undisclosed fees) and to be repaid within five years. The purpose is to expand the business in association with existing shareholder funds. The price is now 19p offer and seems very cheap to me. I do not wish to be thought provocative but it is not impossible that some of these loans could be used to buy in the London GDR’s. Form an orderly queue.
Finally, yesterday, Radio 4 broadcast Matthew Parris’s Great Lives, 4.30 p.m. for replay merchants, and Lord (Mervyn) King chose as his hero Risto Ryti. He was another central banker and therefore, you might think, a natural Kingly selection and, possibly, therefore to be ignored. Certainly, I bet you have never previously heard of this guy. But, believe me, he was much more than the average bloke. Listen and learn.