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Triple Crunch Log                                                                                                            

and marketing. "But a leak does not mean an explosion."254

4.4.10.  Modern capitalism is at a moral dead end. And the bosses are to blame:” Will Hutton op-ed title. “Capitalism will be continue to be demonised while our CEOs refuse to put their own corrupt house in order.” “Chief executives were paid 47 times average pay in 2000; today, they are paid 81 times the average. And all directly or indirectly colluded in the change that triggered the greatest economic calamity since the 1930s. None blew a whistle, raised a doubt or suggested strategic options. All trousered the bonuses. Nor was there any noteworthy collective improvement, despite all the dealing, in the performance of the firms they ran over and above what one might expect from reasonable stewardship.” The CEOs’ organisation, the CBI is opposing a national insurance tax proposed by Labour in the run up to the election: it will effect bottom lines nd therefore bonuses. Contrast Ove Arup and John Lewis.  They believed in the notion that firms were essentially moral enterprises and that the point of profit was to serve the business purpose of the firm. Lewis said "it is all wrong to have millionaires before you have ceased to have slums". "The present state of affairs is really a perversion of the proper working of capitalism," he thundered in 1957. "Capitalism has done enormous good and suits human nature far too well to be given up as long as human nature remains the same. But the perversion has given us too unstable a society.”255

Unilever CEO adds voice to business leaders saying “shareholder value” is a flawed concept, with all its implications of short-termism. Paul Polman: “I do not work for the shareholder, to be honest; I work for the consumer, the customer . . . I’m not driven and I don’t drive this business model by driving shareholder value.” “It’s easy to be a short-term hero. It is very easy for me to get tremendous results very short term, get that translated into compensation and be off sailing in the Bahamas.”256

BP lobbies to limit controls on shale gas drilling, trying to head off rising concerns about fracing at the US Environmental Protection Agency. BP also opposes public disclosure of the chemicals used in fracturing, on the basis that the information is commercially sensitive.257

5.4.10. Trial of Project Better Place network begins in Tokyo this month: a key step in the Californian firm's bid to build the world's first infrastructure networks for electric cars by next year. PBP’s model involves building networks of charging points and battery-switch stations, with a robotic mechanism to swap the empty battery in a car for a fully charged one, meaning "refilled" in minutes, rather than several hours to charge the batteries. Copenhagen already has a network of 100 public charging points, is already being trialed in Copenhagen. The first commercial network, based on data from the two trials, will launch in Israel at the end of the year. Renault Fluence electric vehicles will be used. PBP has raised about £460m in investment in the past three years.258

7.4.10. Private equity boss gives dire warning. Guy Hands, chairman of Terra Firma, says Britain faces a decade of pain, social unrest and unemployment.259

Goldman Sachs denies betting against clients. An eight-page letter to shareholders, signed by chief executive Lloyd Blankfein and president Gary Cohn, denies accusations that Goldman had repeatedly profited by inflating unsustainable financial bubbles. They admit that Goldman “went short” in the housing market while simultaneously continuing to trade mortgage-backed securities to its clients but argue that various sophisticated investors simply took differing views.260

BNFL memoir revives nuclear safety fears. Former British Nuclear Fuels director Harold Bolter publishes an autobiography recalling industry panic over 1990 report on clusters of illness surrounding the Sellafield plant. At the time, workers at Sellafield were advised not to have children.261

8.4.10. Petrol price reaches an all time high in the UK of £1.20 a litre. The average was £1.19 at its highest in July 2008. The RAC says “it is a dark day for motorists.” The weak pound and tax rises have contributed.262

9.4.10. World Bank approves a $3.75bn loan to build one of the world's largest coal plants in South Africa. An official says: “It was not an easy decision. Everybody recognised the concerns about climate change, but this was a balancing act.”263

Russia and Germany start work on £8bn Nord Stream pipeline under the Baltic. Its 55 billion cu metres a year from 2012 will give Russia a third of the EU gas market.  The first leg of the project will carry 27.5bcm starting from 2011.264

Tories and Labour agree with industry that there is no need for strategic gas storage in UK. Industry argues it would take 4-10 years, and in that period nothing would be done by the commercial sector to build its own gas storage. 22 such projects are in planning, which would quadruple Brtain’s storage by 2020 as effective North Sea storage in gas fields depletes.265

First shale gas drilling in the UK. Igas will drill one of Europe’s first wells east of Liverpool, having as taken leases on 300,000 acres of shale. As in the US companies face two main problems. One is political resistance; the other is the danger of pollution and associated reputational risk. Wolfgang Ruttenstorfer, chief executive of Austria’s OMV, one of the companies exploring the potential of shale gas in Europe: “I don’t want to create these kind of hopes and fantasies that lack final results, so I’m extremely cautious whether [shale gas] will be an option at all”.266

11.4.10. US military warns oil output may drop unexpectedly, with missive shortages by 2015.  The warning comes in Joint Operating Environment report from the US Joint Forces Command: “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day. While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China dn India.” “…..One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest.”267

13.4.10. IEA forecasts oil consumption will hit record levels this year and threaten recovery: 86.6 million barrels of oil per day, 2% higher, up 1.67 million barrels a day. “Ultimately things might turn messy for producers if $80-$100 per barrel is merely seen as the new $60-$80, stunting economic recovery while prompting resurgent non-oil and non-Opec supply investment. A recovery in oil demand is moving apace. The return of economic growth and hence oil demand growth is fuelling the increase.” OECD recovery could be blighted, the monthly report concludes.268

McKinsey foresees no tariff rises if Europe switches to green electricity. The Roadmap 2050 report examined

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