Merryn Somerset Webb

Why we shouldn't bail out developers - yet

Last year I spent a week in Manchester filming a property programme. The producers put me up in a ‘luxury’ two bedroom flat on the edge of Manchester. It was absolutely hideous. The flat was tiny – pre buy to let its floor space would have made it more a studio than a 2 bedder. It came with tiny furniture – presumably to make its own tininess less obvious and had no storage space at all. It was a pretty dismal place to be. But worse than the flat itself was its environment. It was in a block in the middle of lots of other blocks. They were all new or a few years old and they were all weathering badly. They offered no outside space to their hoped for owners and they didn’t compensate for this with anything in the way of community spaces. There were no pedestrian squares, no coffee shops, no shops of any other kind and no sign of any patches of green. It was a true buy to let wasteland. And an empty and lonely one at that. I remember saying at the time that how odd it was that private developers seemed to have learnt so few of the lessons taught by the failure of high rise council estates: instead they had repeated them, just with less floor space...

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The graduate tax makes no sense - the current system is good enough

Vince Cable says some very sensible things (see my last post). But he also comes up with some really silly ideas. During the election a prime example was the mansion tax. Now it is the graduate tax – or “contribution” as he calls it. Higher education is expensive. It has to be paid for and it is good if those who benefit most from it are the ones who pay for it. But taxing graduates is not the way to make them do so.

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Banks deserve criticism for almost everything - but not for refusing to lend

I was interviewed by the BBC a few weeks ago about the way in which the UK’s retail banks regularly rip off their customers. It wasn’t exactly a tough interview to do (you can watch it on Panorama tonight). There are hundreds of things to point to if you want to make a case for retail finance being a deeply unpleasant industry. In last week’s magazine I pointed to Lloyds’ treatment of my over trusting mother – they’ve helped themselves to thousands of pounds of her money via both incompetence and unfair policies and quite clearly have no intention of compensating her for doing so. Ruth Jackson had a go this week too in her magazine column, noting that she too has a hundred horrible stories to tell and pointing to the ludicrous overdraft and other charges we all constantly get hit with. And this weekend Vince Cable joined the fray claiming that the banks offer a “very bad deal” to most of us and criticizing the general lack of transparency as well as the ongoing “unacceptable bonus culture.” He talks about this at greater length on tonight’s programme as well and I totally agree with him – the bonus culture has to go. However there was one area of questioning on during my interview that was not quite so straightforward...

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Fed up with deflation? Give women more power

I gave a speech a few weeks ago to a group of Edinburgh fund managers alongside Gillian Tett, the FT’s very glamorous US editor. We both talked about trust in one way and another and I touched on what I consider to be the strong chance that a double dip recession will lead to a hugely stepped up programme of QE and eventually hyperinflation (for more on this see Adam Fergusson’s When Money Dies – reviewed in this week’s magazine). The speeches went well – we got as many laughs as you could possibly expect for speeches on macro economics. But at the end one of the questioners – CLSA’s Russell Napier – threw us a blinder of a question. Had we noticed, he asked, that the UK had only been bothered by persistent inflation since the introduction of universal suffrage. Did we think there was a connection? We moved on pretty quickly at the time. But later I realised there probably is a connection. Why? Because politicians promise what they think voters want and women voters, being society’s main carers are most likely to be promised the things that most expand the state. Historically it has mattered – or been perceived by politicians to matter – more to women that they get help looking after the young, the sick and the disabled than it has to the men who don’t do so much of this kind of work in the first place. So what do you do if you want the women of your constituency to vote for you? You promise them more schools and hospitals; you promise them child trust funds; you promise them universal university education; and you promise them happy and well run care homes for their parents. All the things you know you can’t really afford. And the more unaffordable things the state promises the more likely it is to have to print money to pay for it – and the more likely inflation becomes. So it is entirely possible that giving women the vote in the end causes inflation... 

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Can you really make money from the moon?

A new lunar cycle began at the weekend. You might think this is totally irrelevant, but perhaps not. There has long been an idea knocking around that the movement of the moon affects the way stock markets behave. There have even been a couple of reasonably influential studies done on the subject. A few years ago, the Harvard Business Review attracted some attention by noting that the results of both of these studies suggested that during the seven days before a new moon and the seven days after a new moon, average stock market returns are higher than at other times. And not just in the US (the most studied of markets), but all over the world. Sounds like crazy talk doesn't it? 

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