There is a problem in UK banking that's stalling our recovery and it goes something like this:

  • Banks have two main components: high street lending & saving, and investment banking.
  • The investment banking side took far too many risks in dodgy sub prime investments and lost all the money.
  • However if the high street lending & saving side of a big bank fails it does huge damage to the economy, so the government steps in to fill the gap.
  • Now the banks are required to shore up their investment banking risks with actual capital so that they don't need bailing out again.
  • They don't have this capital, so while they slowly build it the high street lending & saving side doesn't do any lending - getting a mortgage in the UK at the moment involves having a massive deposit, ridiculous booking fees and unfair rates.

So how to fix this and get them lending again? The UK ConDem coalition is talking about breaking up the banks - splitting the risky investment lot (increasingly referred to as 'casino banking') from the 'too big to fail' component.

The banks hate that idea of course, threatening that the banking business will leave the UK (oh no! You might leave with your middle man industry that processes huge amounts of money but doesn't actually make anything or pay much tax? How will we cope? ;-)

Unfortunately you don't get into politics without paying for marketing and that money comes from rich folks who are tied up in the banks, so while telling the banks to 'do one' appeals to all of us voters it doesn't appeal to the politicians' paymasters.

I don't think they need the conflict though - there is another way. The 'too big to fail' component, the actual high street lending & saving part of the banks, doesn't need to underwrite massive risks. That's the component that the government actually needs to underwrite, so why not give banks the option:

  • If a bank has a casino investment arm then it has to underwrite all of its actives with its own capital.
  • If a bank doesn't have a high risk component then the government underwrites it and they only need a fraction of the capital.

This would give banks the choice: they split themselves up and they can start lending again right now (and making lots of money on the interest), or they keep their high risk/high reward component and risk their own money.

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And I'll tell you why...

The allegory constantly used by governments and the media is on of a household, and the recession is like the breadwinners losing their jobs. Obviously anyone sensible would cut back, yeah?

But, countries are nothing like households, and that allegory just doesn't work.

I'm not arguing that they shouldn't cut back at all, but I think a healthy government should be running some degree of deficit during a recession.

Here are my assumptions:

1. There will ALWAYS be boom and bust

We can't stop the cycle of boom and bust, it's been going for hundreds of years and will continue for hundreds more. Maybe one day, but no financial theory to date has come close to a way around them.

With that assumption we should plan for them: busts will happen.

The UK will vote on May 5th on whether to switch to the Alternative Vote system (AV) rather than the current First Past The Post (FPTP). I'm a supporter of AV, but FPTP has huge support from both the major parties and from Rupert Murdoch, which means that it both doesn't have a chance and must be the right way on principal.

Fact is anything legal that Murdoch's against I'm for on principal.

There is a problem in UK banking that's stalling our recovery and it goes something like this:

Banks have two main components: high street lending & saving, and investment banking. The investment banking side took far too many risks in dodgy sub prime investments and lost all the money. However if the high street lending & saving side of a big bank fails it does huge damage to the economy, so the government steps in to fill the gap.

British Airways have the best paid flight staff in the world. Their pay is sky high (sorry) – cabin crew can earn up to £56k a year! To put it in context that's more than junior and mid-level doctors – I really don’t see how any cabin crew job can be worth more than even the most junior doctor's role.

BA also run one of the biggest teams per flight – they have 14 on each long-haul plane.

The problem is that flights on BA are expensive.

Recently at TechEd Berlin I attended an optimising Javascript presentation that I described as having "lost focus".

I think this one (from Google) is far more the sort of level and detail that I expected:

This presentation is excellent - in fact I think every developer who ever does any Javascript should view it.

I think the current situation with bankers' bonuses shows a complete failure to understand risk and how markets actually work.

There's a TV show in the UK called Property Ladder. Every week through the property boom it followed someone buying and renovating a house with a view to selling it for profit. They found some proper idiots on that show.

There's a great deal of fuss at the moment about RBS's investment division's planned bonuses. They've made some money (great!) but want to pay over a billion in bonuses, which is over a quarter of the profit.

When .Net originally launched it came with first rate support for Simple Object Access Protocol (SOAP) and at the time I was seriously impressed. Creating a SOAP client-server connection was amazingly easy - little more than adding a .asmx file and decorating your methods with the [WebMethod] attribute, and then point your client project at it and Visual Studio does the rest.

What Visual Studio actually does in this case is create a large auto-generated code file from the WSDL.

Sightseeing

By this point we were starting to feel the tech-fatigue. We took the opportunity to see a little of Berlin, before heading back to hit the labs and the convention stalls

DEV301r Microsoft Visual Studio Tips and Tricks

Scott Cate Nice session to finish on - most of these I knew already but a couple were new. They're all on Scott's blog.

Finally all the stands that had prize draws held their raffles.
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