Archive for January, 2010

Well said Obama!

Thursday, January 14th, 2010

President Obama has said that Wall Street must repay the $117bn to taxpayers and has criticised banks for “massive profits and obscene bonuses”. It is similar to the UK where with some banks were bailed out by the taxpayer e.g. RBS is essentially 84% owned by taxpayers. Chief Executive Stephen Hester was grilled by a cross-party group of MPs. He didnt comment on the total bonus pool the bank will pay but it is thought to be £1.5bn. During the grilling he even said “If you ask my mother and father about my pay they’d say it was too high, so some people close to me have that view of bankers.”  Nothing against the bankers themselves, its the bosses and who decides on these bonuses etc.

In the US, the tax is to recoup money US taxpayers are expected to lose from bailing out the banks during the financial crisis. He said “My commitment is to recover every single dime the American people are owed.”

Will Gordon Brown say/do anything similar??

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Worrying times for Manchester United

Thursday, January 14th, 2010

Its getting  a bit worrying being a United fan if all the things happening regarding the debt and what will happen to the club/stadium/players/training ground.

The latest in the papers was that United may have to sell Rooney and also to sell their training ground (and lease it back). Everyone knows now that United have a debt of  millions – its £699m to be precise. The big problem with this debt (apart from the amount) is that debt is being paid off at very high interest rates – I know sounds mad in these low interest rate times but there you go!

Anyway, the latest plan (and dont know why wasnt done earlier) is to ease to burden of the debt with a £500m bond deal. This £500, will pay some of the debt off while rewarding the new bond holds with a return at a lower interest rate. The “Preliminary Offering Memorandum” was distributed to potential investors this week and from it their are 5 possible outcomes on what may happen.

They are:

- Selling Old Trafford and Carrington training ground- highly unlikely to sell Old Trafford short term but apparently selling training ground is being “considered”.

- No new players

- Debt could get even worse

- Selling players – as I said there is rumour United may have to sell Rooney. Hes the only player we have who is likely to get anything near what we got for Ronaldo. United only made a profit because of the sale of Ronaldo – without it, it would have been a loss.

- Spending money they dont have

Its just crazy that not that long ago United were, as were as being a great football club, a well run business. Now we are seriously in debt and the Glazers have quite frankly messed with United!  For example, there was loans totally £10m to the Glazers under the heading “Related Party Transactions”. It was also stated in the document that United agreed to pay a company connected to the Glazers an annual fee of £2.9m under “consultancy agreement” and “management and admin fees” of £0.6m, £1.8m, £1.4m, £3.1m and £3.1m have been paid to ‘affiliates’ since July 2006.

You can read more about this in this Daily Mail article. There is also a link to read the document – if you want – it is 298 pages!

A lot of people may think it could never happen to United that we go “bust” or just drop down the league but not that long ago, Leeds United were fighting for the league title and got to semi final of Champions League. Now they are in Division 1 and only this season looking like they are getting their act together properly.

There was an article in The Times the other day that United have, since Glazers took over, paid £325,000,000. I think I am right in saying this is all just the interest!! We could have bought Messi with that money (and just a few others)!!

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Formula 1 – 2010. Really looking forward to it!!

Thursday, January 14th, 2010

The Formula 1 2010 season really is lining up to be a great season!! Schumacher is back and is looking quick in testing. Alonso, who will be with Ferrari, has said it will be great to race against a legend.

Also, if Bernie Ecclestone has his way it will be more like Mario Kart than Formula 1. His latest plan to get more overtaking by having an “overtaking lane”. He says drivers will be able to use it 5 times a race so they are not stuck behind drivers! WTF!?! (Although if this happens – which highly doubt – it properly wont be this coming season).

In other F1 related news, I checked the odds for the drivers championship. Depends on the bookies but reigning champion Jenson Button is only 5th or 6th favourite!! At one bookies, hes 14/1 to win. May be worth a bet!!

Favourite is Hamiton then Alonso, Schumacher, Vettel, Massa (some bookies Massa is 6th fav).

Check out the latest odds at all main bookies at Oddschecker.

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Getting sick of the snow!

Saturday, January 9th, 2010

I think we have had enough snow now!! Its causing lots of problems in the UK and its turning into dangerous ice! (Although in some quieter areas like near my parents it still looks pretty.). The UK is seemingly grinding to a halt, people panic buying and some stupid news headlines are appearing – the other day with all the snow Manchester was “a city under siege”. Oh dear..

Loads of schools have been closed, people unable to get into work, sports events cancelled, airports closed,…. The list goes on. You would have thought by now we would have learned our lesson. The past few years have been very cold and although this year the snow has been pretty extreme (for the UK anyway) I think the government could have prepared better. Compared to some countries around the world we are not handling it particularly well (in my opinion).

For example, the president of the AA contacted the government back in November about the levels of grit/salt. However, we are now in a situation where grit/salt levels are low and salt use is to be reduced by 25% (including no gritting of the hard shoulder on motorways).

I mentioned before that many schools have been closed and this also includes exams being cancelled. Looking at the forecast this cold weather looks like to last at least another 7 days if not more. (If its anything like back in 1963, it snowed from Boxing Day all the way up to March!!). I heard somewhere that pupils may need to do exams in the summer.

The bad weather is also having a effect on business. Insurers RSA predicted it could cost the UK economy £690m a day.

The government now need to get there act together. Its too late to be prepared for this winter but for the future winters we need to be better prepared with things like grit/salt levels. There are many other countries were very cold weather and lots of snow and they handle its miles better – for them this is properly considered mild! If it does snow like this every year, what can be done?? The BBC has an article about what could be done and what is done in other countries.

One thought I have had and I am sure thousands of others have had is global warming and basically where is it then. Isnt it supposed to be getting warmer?? Well apparently the key thing is the difference between weather and climate. Weather is what we get day to day, month by month. The climate is the weather over a 30 year period and apparently this is increasing. Personally I think the UK could do with getting a few degrees warmer in the summer!! (And for longer!)

Anyway, stay safe everyone. Roads are icy and some pavements are lethal!! If you do have to drive there are some tips – basically easy on the accelerator and brake & consider starting off in 2nd gear to reduce likelyhood of wheel spin.

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Uncertain future for United??

Friday, January 8th, 2010

There has been a lot of news in the press recently about Manchester United (and a few other clubs) and how much is owed and how much in debt they are etc. Its starting to get worrying for many clubs.

There is an excellent blog post byMatt Slater on the BBC News sport site explaining it all – a lot better than I can explain it! Basically the owners of United are considering a bond issue to refinance debts which are believed to total £700m.

Just incase you dont remember, back in 2005 the Glazer family completed a deal to buy United which involved them borrowing a load of money from many different lenders. A year later they refinanced all the borrowing and split it between themselves and the club. However, the interest on the debt was to be paid by the club. Dont know how they managed to wing that!!

In no world does it make sence to turn the world’s richest football club into the most indebted football club!

One thing I didnt know is that the list of IOU-holders includes three New York hedge funds charging HUGE interest. The loans account for only a quarter of the total debt but they have “skewed an otherwise decent mortgage deal into the financial equivalent of a ball and chain”. The average annual interest rate for the total debt is close to 10%. Crazy in these times of record law interest rates!

As the blog post says, United will be OK but it could be bad for other clubs like Portsmouth, West Ham, Hull City,….

Related links:

United Rant – United’s bond issue: a primer – Excellent article which explains more about the bond issue.

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