Have you checked the manhole covers in your street lately? Maybe it would be a good idea to take a quick look: just in case. The reason this might be an advisable course of action is that hot on the heels of those other two Asian scare stories ? Sars, and chicken flu ? comes a new one: manhole-cover theft. The latest to be hit was the UK city of Gloucester, where a sudden wave of ?heavy-metal crime? left the city?s streets with 40 top-less manholes. But this unusual craze has in fact had a global reach, with cases stretching from Milwaukee, to Taegu in South Korea to Shanghai, China. And the cause of it all: rising metal prices as the needs of Chinese industrialisation and development hit the realities of a supply constrained world. In fact while China previously exported much of its steel to the US, it is now buying up US scrap metal for its own steel consumption. As a result worldwide scrap metal prices have almost doubled in the last 6 months, and it is this price explosion which has produced the sudden surge in activity on the manhole front.
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Author Archives: Edward Hugh
3G Update
Well following my post last week about Vodaphone and 3G in Europe there seems to be more news today that backs-up the argument questioning the economic viability of the thing.
Firtsly shares of NTT DoCoMo, the world’s No. 2 mobile-phone and the leading 3G operator, just had their biggest one-day drop ever after the company said operating profit may drop 25 percent and sales may fall (by 2.5%) this year on more competition in Japan.
Meantime Investment bank Nomura are predicting that Hutchison Whampoa could walk away from its loss-making 3G mobile business by end 2006. Their analyst reckons HW could rack-up operating losses of about $2.7 billion this year simply on the 3G operation alone.
Normura failed to see how Hutchison 3G (H3G) can achieve an economic return on capital and value the company at a negative HK$63 billion. “Our Hutchison Whampoa estimates include an assumption that the company walks away from its 3G ventures by the end of the full year of 2006,” James said.
The survival of 3 Italia was also called into question despite signing up the highest number of 3G subscribers among Hutchison’s 3G business. The company announced in March that it had 453,000 customers in Italy.
Obviously the DoCoMo situation is not all down to 3G, and in some ways it could be declared a success: DoCoMo had 3.05 million 3G users at the end of March 2004 compared to 330,000 a year earlier. However finding a realistic pricing model to extract revenue seems to be a problem, and they have now announced that they will be offering unlimited mobile internet on their 3G FOMA service for a monthly flat fee of 3,900 yen. At current rates that is about a manageable 29 euros a month. Which would be fine for a lot of users, but then you have to subtract the downside: all those ADSL customers who may decide to switch over. As I said, great idea, but the economics are far from clear.
“If we don’t succeed, we run the risk of failure.”
J Danforth Quayle
What’s In A Headline?
According to the FT it was a case of “Pick-up in pay awards forced rate increase”, yet for the Guardian the point was rather “Housing boom forces third rise in rates”. My sympathies here are with the Guardian. Of course it is the case that the Bank of England pointed to the rising level of pay increases as the justification for raising its main interest rate by a quarter point to 4.25 per cent yesterday.
But they would say that, wouldn’t they. The Bank of England Monetary Policy Committee has an inflation target of 2%. Now the last time the Bank was able to stoke inflation up to 2% was in 1998 (it is currently at 1.1%), so there would hardly seem to be any great urgency to raise what are already reasonably tight rates by international standards. Except, of course, for the housing situation.
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Poland And The EU: Happy Precedents?
Nick has a quicklink to a piece in Business Week which is worth the read. One passage in particular struck me:
There are precedents for a happy entry into the EU from which Poland is trying to learn. Spain boomed after joining in 1986 because successive governments spent the funds they received from the EU shrewdly, restructured state finances successfully, and continued to liberalize and deregulate the economy. The results were rapid growth, rising living standards, and, after a period of painful restructuring, lower unemployment. Spain’s per capita GDP is now about $22,500, almost 90% of the EU average. Polish GDP per capita, in contrast, is less than $6,000. “If we could do what the Spanish did, I’d be very happy,” says Janusz Onyszkiewicz, senior fellow at the Center for International Relations in Warsaw and a former Defense Minister.
I’ve already been having a bit of a problem this week with simplistic arguments: looks like I just found another one.
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On Your Marks, Get Set……… Hang on A Minute
Tuesday’s announcement by Vodaphone that they will launch their new 3G mobile service in Germany and Portugal is another topic which rattles some skeletons which have recently been kept well locked-away and out of reach.
As the Times is only too willing to remind us: “the auction of 3G licences conducted in the UK was the largest process of its kind ever conducted, earning for the Government some ?22 billion in 2000”. And then suddenly everything went strangely quiet!
Really 3G has been plagued with problems, and I have the feeling that it is a hot potatoe that nobody really knows where to put down. Clearly it is a visionary, future-oriented technology: but is there a market for it, will it be profitable, and if so, when?
Well the race is now well and truly on with Hutchison Whampoa, Orange (which launched its first 3G services in “Pilot City” Toulouse on Monday) and T-Mobile ( which has reacted to the Vodafone move by saying it will start selling 3G handsets immediately and by bringing forward its planned launch by a week).
Vodafone?s chief marketing officer, Peter Bamford, puts it like this:
“Consumer trials have indicated that early adopters are keen to try this technology and so we are giving them a taste of it prior to the full launch of enhanced services later in the year.?
My own feeling is that there is a market, but not a sufficient one given the existing cost structure. In plain terms: if they make it too expensive virtually no-one will use it, and if it is too cheap there will be users but no profits. Either way it seems like it could be losing proposition in the short run.
Among the other details of interest are the choice of the Samsung Z105 for the launch (ouch Nokia!). And of course underlying it all the history of the alleged superiority of the EU planned standards-based roll-out over the anarchic and disruptive US ‘deregulated’ model. You certainly don’t seem to hear too much about this here in Europe these days. As I said, haven’t they gone quiet!
The Self-Deception Game
In a week which has already seen Rai president Lucia Annunziata announce her departure (Rai is Italy’s state-run television and radio network), the latest statements from the Italian government about the future of Alitalia only serve to reopen one of the old questions floating round my head: just how solvent is Italy?
The Rai scandal has a total feeling of deja vu : Ms Annunziata resigned whilst accusing Berlusconi and his centre-right government supporters of trying to pack Rai with political appointees.
The Alitalia bankruptcy statement too may be just one more case of its kind. Indeed, following the bizarre logic of these things it may be that the declaration is intended to avoid the eventuality, if you see what I mean.
“If everyone understands that Alitalia could go bankrupt, then it will be relaunched,” Rocco Buttiglione, European affairs minister, told reporters. “But if anyone deceives himself into thinking that it can’t go bankrupt, then it will.”
So maybe this could and should be discounted as just one more bankruptcy (scare?), probably it is, and there’s nothing more to be said, but I would just like to take the opportunity of rephrasing the Buttiglione quote:
“If everyone understands that the Italian State could go bankrupt, then it might just get relaunched,”…….”But if everyone deceives themselves into thinking that it can’t go bankrupt, then it will.”
Damaging The UK?
The Financial Times has what I consider to be an important editorial this morning. It concerns a letter 52 former ambassadors and international officials have written to Tony Blair telling him he is damaging UK (and western) interests by backing George W. Bush’s misguided policies in the Middle East. The FT describes this as “the most stinging rebuke ever to a British government by its foreign policy establishment” and comments wryly: “It would be comforting to imagine that their comments will be heeded.”
The FT does not mince it’s words:
“In any case, the notion that so-called Arabists – expert in the language, culture and politics of Arab countries – should be excluded from policy because of their alleged predilection to “go native” should be discredited by the way the Pentagon, which shut out anyone with actual knowledge of Iraq, has serially bungled the occupation“.
The FT is hardly a radical rag, given to frequent rants, so this broadside seems deeply significant.
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Busted Flat And Vitriolic In Luton
Bernard sent me this link from the New York Times with the suggestion that it might be of interest to AFOE readers. I am dutifully complying by posting. Unfortunately I fear the situation described may come much more as news in the US than it does to those of us here in Europe.
Luton: “In this former industrial town north of London, a small group of young Britons whose parents emigrated from Pakistan after World War II have turned against their families’ new home. They say they would like to see Prime Minister Tony Blair dead or deposed and an Islamic flag hanging outside No. 10 Downing Street.
They swear allegiance to Osama bin Laden and his goal of toppling Western democracies to establish an Islamic superstate under Shariah law, like Afghanistan under the Taliban. They call the Sept. 11 hijackers the ‘Magnificent 19’ and regard the Madrid train bombings as a clever way to drive a wedge into Europe“.
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Referendum or Referenda?
No this isn’t a linguistic point about the plural form in English. According to Wikipedia at any rate both forms (referendums and referenda) are acceptable (but I did feel the need to check). The issue here is rather whether the referendum is a singularly British obsesssion, something which in the French context is lacking in real significance. This, at least, would seem to be the conclusion you could reach if you went by Alain Jupp?’s latest pronouncements on the matter:
European countries should think carefully before copying Mr Blair’s “rather personal, and perhaps I should add, ultimately British, initiative”.
“When it comes to choosing [between ratification by vote in parliament and a referendum], we would like to take a concerted approach with our partners and in particular with Germany,” Mr Jupp? said at a press conference.
And this despite, of course, the fact that Jacques Chirac delared in Thessaloniki last year that he was “logically in favour of a referendum” since “It would be the only legitimate way”.
In my schooldays we were taught that referenda were a very un-British thing. That their existence in the constitution of the Fifth Republic was one of the weaknesses of the French way of doing politics. That they could lead to demagogic manipulation depending on how the question was framed. My oh my, how things have changed!
The British sovereignists are the most fervent advocates of this most ‘un-British’ of institutions, while the home of referenda finds the present suggestion an ‘ultimately British’ initiative.
I suppose the definitive, long-standing objection to the referenda system has to be the leeway it provides for all that jiggery-pockery we are currently seeing.
As the FT observes:
“Mr Chirac’s decision will hinge on his estimation of whether the Socialist opposition would seek to trip the government up in a referendum either by calling for a No vote or by encouraging voters to see it as a protest vote against an unpopular administration.”
Principles, above all principles.
Undressing Brains
Ok, get ready, this is going to be an extremely weird, not to say ‘whacky’, post (well, what else would you expect from the so-called president of the association of ‘whacky economists’: at least nothing dismal I hope).
The idea started to form in my mind as I was writing a mail earlier this morning to a fellow blogger. As the ‘correspondent’ (this term is, please note, also used to describe one of the parties in adultery-based divorce proceedings ) was young and female I felt the unusual need to hedge what I was saying with all kinds of qualifiers to avoid the wrong kind of interpretation. Since the ‘undressing’ thing is a metaphor which I would like to continue to use I thought it might be better to come out of the closet now and declare my secret ‘peeping tom like’ proclivity for this bizarre practice.
Full disclosure: I enjoy watching other people ‘undress their brains’, I have even what may be described as an ‘un-natural’ interest in the topic.
Now if you are over 18, and willing to risk your luck, please press continue reading.
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