Archive for April, 2011

The London 2012 Orwellian PR machine cranks into gear!

Posted in PR, Sport with tags , , on April 26, 2011 by Tom Leatherbarrow

How are ticket sales for London 2012 going? The reason I ask is that I can’t find any information anywhere. What I can hear is the sound of the 2012 Organising Committee’s Orwellian PR machine going into overdrive with it being the last day for ticket applications and all.

Apparently, according to London 2012 Chief Paul Deighton, applications have “hit the roof” and “since last Friday we have seen a high level go to a really high level”. Yes, well, thank you for that, most illuminating, but how many have you actually sold?

“We have been getting three or four times the applications above and beyond what was coming in for the previous five weeks,” says Paul. That’s all very well but if you only had half a dozen applications over the previous five weeks it wouldn’t add up to much would it?

“I think that a lot of people are ordering quite a number of tickets.” Fabulous, could you quantify that?

Dear God, he goes on and on and on with this banality. “Families seem to be ordering so they can go together.” I’m shocked, really? I thought there was a rule that children had to go to the javelin unaccompanied by an adult!

Anyone who has been in PR over the last 4-5 years, particularly those with clients in the construction sector, will know that the 2012 Organising Committee has held a vice-like grip over 2012 PR. Threats have been issued, PR people have been cowered, some of the biggest companies in the country have feared being unmasked as a London 2012 supplier.

You would think after all that, the organisers would actually provide the world with some useful information, particularly as London 2012 needs to get 25% of its revenue from ticket sales to actually pay for all of this. Well, you’d clearly be wrong!

Greed laid bare for all to see!

Posted in Banking Reform with tags , , , , on April 15, 2011 by Tom Leatherbarrow

I spent last night reading (selectively, its 650 pages long) the US Senate Panel’s report on the financial crisis (yeah party on!).

It stands as a stark contrast to the interim Vickers report on the structure of the UK banking industry which was released in this country earlier this week.

Where Vickers was polite and diplomatic, Senator Carl Levin and his committee reach for the baseball bat. Levin describes the market in Mezzanine Credit Default Obligations (CDOs), which were made up of thousands of individual mortgages that were traded around Wall Street and further afield, as “a financial snake pit rife with greed, conflicts of interest and wrongdoing”.

Levin also believes Goldman Sachs executives weren’t truthful about the company’s transactions in testimony before the subcommittee at an April 2010 hearing. “In my judgment, Goldman clearly misled their clients and they misled the Congress.”

There has long been a suspicion that Goldman Sachs artificially pumped the market in CDOs, making a killing before exiting the market, knowing full well it was about to crash. In Michael Lewis’ words, author of The Big Short, it was the equivalent of starting a fire in a theatre, sprinting for the exit and bolting the door behind you!

The Senate report, called Anatomy of a Financial Crisis, confirms all this to be true and lays bare the conflicts of interest at the heart of the scandal, which ultimately led to the collapse of Lehmans and the global financial heart attack. In fact, for me, the best bits are not until page 648 of the report when Levin details a timeline of Goldman Sachs’ activities, helpfully labelled the Hudson 1 Chronology.

8/9/2006: “ABX (the CDO market) continues to perform well but firm thinks it has run its course and will reduce exposures”

9/9/2006: “Continuing to reduce volatile ABX position. Trading desk is working to reduce position by reducing ABX longs with shorts” (in other words, Goldman’s knowing the market was shaky bets against it by taking short positions)

19/9/2006: Planning of Hudson begins (Hudson is a massive book of CDOs – in other words, not only does Goldman’s now have short positions in the CDO market which it believes will crash, it now starts marketing the CDOs to its clients)

3/12/2006: Goldman issues (Hudson) offering circular to investors … does not inform them that Goldman’s has $2 billion short position

4/3/2007: Value of Hudson falls significantly. “I think their (investors) likelihood of getting the principal (money) back is almost zero”

15/7/07: A number of Hudson’s assets ie. mortgages are downgraded and trigger liquidation requirements

22/7/08: Hudson goes into default

This staggering conflict of interest, knowing that a market is about to crash, taking a short position in it and then encouraging your clients to get into it, lies at the heart of the financial crisis.

I have long contended that if the general public really knew what the banks (including many of those based in the UK) had really been up to, no banker would dare call for an end to banker bashing.

It’s thanks to people like Levin for casting some much needed light on their practices.

What did Rebekah know and when did she know it?

Posted in Media with tags , , , , on April 13, 2011 by Tom Leatherbarrow

The tangled web that was the Watergate scandal, which brought down Richard Nixon, had lost most people in its twists and turns by the time the Senate started investigating in 1973, but like many complex issues it was boiled down to a single ominous question by Senator Howard Baker, “what did the President know and when did he know it?”

It would appear that the News of the World (NOTW) phone hacking scandal is now reaching a similar point when there is only one crucial question left to answer – namely what did the most senior people in News International know and when did they know it?

The collapse of the rogue reporter defence, the arrests of two senior reporters and last weekend’s mea culpa on a page 3 suggest that senior people in News International know a lot more than they have been willing to admit so far and probably far earlier. How long will its latest line in the sand, namely that only 7 or 8 people were hacked and that £20 million has been set aside in a compensation fund, remain uncrossed? My guess is not very long.

Nixon was ultimately brought down by the Smoking Gun Tape (famously illustrated by Washington Post cartoonist Herblock) on which he was heard to instruct his Chief of Staff, HR Haldeman, to tell the CIA to block the FBI investigation into the Watergate break-in. This was a clear obstruction of justice.

Bizarrely, it might be the actor Hugh Grant who has uncovered the smoking gun in this story. In a New Statesman article Grant has admitted turning the tables on a former NOTW employee by secretly taping him talking about the hacking and letting slip that Rebekah Brooks, formerly editor of the NOTW and now News International’s senior executive in the UK, knew all about it. The extraordinary transcript of the conversation can be read HERE.

The question now is whether the House of Commons Committee investigating the hacking will be able to get Brooks to appear in front of them to ask the same ominous question that Senator Baker posed nearly four decades ago.

Nixon hated the press and would have loved the way Grant has turned the tables on News International. Somewhere, he and the late HR Haldeman are smiling.

Bob and Digby fail the Sherman Test

Posted in Politics with tags , , on April 7, 2011 by Tom Leatherbarrow

Do Bob Warman or Digby Jones want to be Mayor of Birmingham? Both are fond of the spotlight, are regularly talked about as potential candidates and are doing little to stop the speculation.

At some point all this flirting has to stop though. If neither are interested could I suggest that they take a leaf from William Tecumseh Sherman’s book who put down a benchmark by which all statements on political aspirations should be judged. Sherman became famous as a Union General during the American Civil War, famously raising Georgia to the ground, including the burning of Atlanta during his scorched earth ‘March to the Sea’, which led to the ultimate capitulation of the South.

He was famously straight talking, once declaring that all newspapermen should be shot – an interesting take on media relations strategy I think you’ll agree. However, in order to put to rest any hopes that his supporters had that he would use his popularity in the North to run for the Presidency in the aftermath of the Civil War, he famously declared, “If nominated, I will not run; if elected, I will not serve.” Now that is unequivocal!

Both, Bob and Digby therefore currently fail the Sherman Test. One can only conclude that, in the absence of an actual statement, both are interested but are unwilling to formally throw their hats into the ring until they have taken ‘soundings’ or there is a groundswell of popular support.

It must be uncomfortable sitting on that fence!

High fashion, high stakes

Posted in Media with tags , , , on April 4, 2011 by Tom Leatherbarrow

Today, I turn my blogging attention to the world of fashion. Surprised? I don’t see why, those who know me well also know that I can admire a crop-top or a crocheted stitch as much as the next man.

Anyway, I will defend myself no more, the big news is that Times fashion editor Lisa Armstrong and her deputy Luke Leitch have jumped ship to the Telegraph who are cock-a-hoop at their coup. However, there is more to this than meets the eye. Apparently, this is no mere case of the Telegraph dangling much gold in front of The Times’ star pair.

According to rumour (Roy Greenslade’s blog to be exact) both Armstrong and Leitch have become increasingly disenchanted with The Times’ paywall which has seen their readership drop and have resorted to “tweeting like crazy” to maintain their links with readers. Greenslade, in fact, describes them as “paywall refugees”.

This has happened before. When the New York Times erected a paywall around its OpEd pages many years ago the columnists rebelled. Paul Krugman, Maureen Dowd, David Brooks and Thomas Friedman etal threw their toys out of the pram and demanded the return of their readership.

Why? Because those journalists working at the pinnacle of their profession are not mere writers anymore, they are ‘brands’ for whom the weekly column is a loss-leader to get their message to the wider world in the hope that we all then go and buy their books. Think I’m kidding? Try searching any of the names listed above on the Amazon US website and see how many books they’ve each written. Brooks, for example, is currently #2 on the New York Times Non-fiction Bestsellers List.

Can we expect to see a similar rebellion over here? I’ve got news for you, we already are! Armstrong is a contributing editor to Vogue and has written multiple books, both fiction and non-fiction, all with a fashion twist.

An anonymous life behind the Times paywall is no good to her!