Wednesday, 4 November 2009

Formula 1

Toyota, and probably Renault, are getting out of F1. A basic knowledge of freedom and markets told me that this, or something like it, would happen, and that the 'compulsory budget cuts' - or in economic terms, price controls - proposed by the Max (now Jean) and Bernie were utterly fatuous.
F1's current situation is an object lesson in what happens without democracy, the rule of law and the indulgence of oligarchs. The FIA is an undemocratic dictatorship. It has handed a monopoly patent for all the 'commercial rights' to an oligarch. The FIA operates kangaroo courts to enforce these positions. This corporatisation attracts other cartelisers and mercantilists, like big corporations and autocratic governments. This, for a time, suits the oligarch as he can demand substantial commissions from competing mercantilist and totalitarian governments to bring the show to their town to lend them legitimacy and credibility of their own lack of democracy.
This excess spending filters down to the teams where international corporations are sucked into spending an awful lot of money to try and become winners. A lot of this cash is spent not on engineering and racing but on corporate entertainment and similar. Carmakers as a genral rule are only profitable on their core business one year in five (source: Warren Buffett) hence much of their F1 spend must also come from borrowed money. Keeping up in the bling competition is not cheap.
But, as one lady once famously remarked, 'you can't buck the markets'. Sooner or later the international investors and bankers that have been bankrolling much of the profligate circuit building, carmakers and other fellow travellers will call time on their largesse. The tsunami of cheap money that has sustained the F1 bubble will retreat and an awful lot of people will have been found to be swimming naked.
Max and Bernie have been stupidly trying to impose price controls and more and more detailed rules to try stop this happening. Listen you pair of idiots, price controls never work. As neither do excessive bureaucratic rule writing (which has the entirely opposite effect by increasing costs). But, the loss of Toyota and Renualt will immediately cut the cost of competing in F1. There will be people available. Their facilities will be on offer, cheap. The remaining teams will be able to pay less for everything. This is markets working. What is more important it will cut the barriers to entry for new teams. Small innovative ingenious engineering and ideas led teams. Efficient teams. Cosworth will be back. Why not other engine suppliers like AER?
Bernie and his CVC financiers will, hopefully, be worried sick. CVC's cashflow demands to service it debts are a bigger cash drain out of F1 than any other one thing.
My fervent hope is that the Toyota and Renault exit triggers a serious financial problem at CVC leading to it getting out completely. This may also trigger the exit of Bernie. And this may lead to the FIA resuming control over all aspects of F1. There is only one problem. Jean Todt. The man is an autocratic French mercantilist political operator. Without him there would be a vague chance that the FIA would massively reduce all the fiddling rules and cut the entry fee demands to a reasonable amount and reintroduce democracy.
Williams and Brawn have demonstrated that it is entirely possibel to compete on relatively modest budgets. So lets look for a new era of innovative and very competive garagistes to bring real racing back to F1. I am only sorry that there will probably never be another Ken Tyrrell. And lastly we can say a very welcome farewell to all the ghastly souless F1 facilities like Abu Dhabi.

Monday, 2 November 2009

Quangos Try to Kill You

Not done much posting and reading of blogs for some months. I've been off work too. It'll be 5 weeks tomorrow. Hospitalised. Why? I've got endocarditis. How did I get it? See here .
I have had a not very well functioning heart valve for years. Diagnosed when I was 7 and rediagnosed when I was about 30 and told to me. So, for the last 27/28 years I have worked hard on keeping my heart fit and have done so. This regime also included prophylatic antibiotics before any dental procedure.
Consequent upon the NICE guidance my dentist asked me to check with my GP as to whether the prophylatic antibiotics should be discontinued. I asked him and he said that he had taken advice from a cardiologist and the answer was that they were 'required to take account of NICE guidance'.
I then proceeded normally, but without any prohylaxis,and had two or three minor dental treatments - check ups and cleans - and by Christmas 2008 my wife had noticed that I was not my usual self. I first noticed symptoms over the weekend of 30 / 31 May 2009. Endocarditis is very difficult to diagnose and it took until late September, by when I had become very ill, that Endocarditis was diagnosed in a consultation with a specialist that I had to pay for as the NHS could not provide an appointment until weeks later. I was immediately committed to hospital and put on a 6 week course of antibiotics.
I am incensed that some bloody bureaucrat should interfere in the professional relationship I have with my doctors and end up with exactly the wrong advice which has gone a long way to ruin all the keep fit work I have done for nigh on 30 years.
The moral of this story is that Quangos kill you. Always do exactly the opposite of what they tell you. My financial services business operates on exactly that principle and we've been proved right and the FSA wrong.
I am now going to read the NICE guidance thoroughly and send them a very straightforward letter basically telling them that they are a bunch of wankers and what are they going to do about an apology and compensation. Fat chance. Oh, and all the clinicians I have spoken to have remarked that there has been a spike in endocarditis cases since the NICE guidance.