michael's moving house

The beautiful room below is in Woodland House, for many years the home of Michael Wiinner - one of my all time favourites. Film director, restaurant critic, larger than life character - a loveable, kind and hugely generous man, a great and discreet giver to charity,  and an all round genuine and nice human being.

The room is presently his bedroom in his house in Holland Park, which he has just put on the market for more than £60 million.

The architect Richard Norman Shaw built the house in the Queen Ann style during Queen Victoria's reign for the artist Sir Luke Fildes,  and Edward V11 had his portrait painted by Fildes in this room,  which was originally Fildes's studio.  The king commented that he considered the room one of the finest in London - I certainly agree, it's an absolute stunner.

The house is Michael's childhood home, he moved in with his parents shortly after the war in 1946.  Then the house was leased out as two separate flats and the basement was damp and mouldy.   It is now a home cinema, as below.

Determined to keep the property after his parents moved out in 1972, Michael bought it for £150,000 and started to buy out the tenants.
Originally, he planned to leave it to Kensington and Chelsea council,  but it is leasehold and I understand the council wanted him to purchase the freehold, which would cost £15 million.

If he sells the property at the asking price, he will pay something in the region of £28 million in tax. Below are a couple of views of the exterior of Woodland House.

The property has 46 rooms, 7 bathrooms, 9 lavatories and a swimming pool and  Michael now feels it's just too much trouble to keep up.  Even a simple task like changing the light bulbs is a major job -  'it costs me a fortune to have man in to do it,' he says, 'I paid £1000 the other day.'

At 75, and about to marry for the first time, Michael and Geraldine are looking for a simpler life style, and Geraldine finds the property 'a bit forbidding.'  An apartment, they think. A penthouse with great views, and a terrace with flowers, perhaps.

Much will have to go from the great house, some nice pieces of jade have already been auctioned off at Sotheby for £460,000, and there will be a bigger Christie sale shortly.  Meanwhile, several Old Masters have already been sold.

And a much loved neighbour will be left behind, Jimmy Page, the heart and soul of the greatest rock band ever, Led Zeppelin.  Once a truly demonic, or more accurately, daemonic character, who really set the bench mark for bad behaviour and who now, Michael says, is teetotal and all that, and just bobs up and down the road with his shopping, quiet as a mouse.   Jimmy, you always had style, and you've still got it, style and class.

So, all moves are a type of rite-of-passage, and a little sad, however much we look forward to the next place, the next stage in the journey, and after all, Michael will be leaving behind a house full of astonishing memories of some of the greatest people in show business, who partied and loved and laughed in that big old place.

But Michael's a big character and though the new place may be smaller, he will be just as big, with that great big heart of his, so I wish him bon voyage, happy landings, safe journey to the new home -  and much happiness in his new lifestyle as a solid married man, at last.

Cass

(thanks to Daily Mail and particularly to Murray Sanders, for that beautiful photo of a beautiful room).

How rich is the Queen

It's difficult to avoid the royal wedding, so, as this blog is about money, let's look at the wealth of the royals, starting with the queen, and one of her favourite castles.

Her private wealth is estimated at $500 million.
This comes from property, including Balmoral Castle in Scotland (above),  stud farms, a fruit farm, and marine land throughout the UK, extensive art and fine jewellery and one of the world's largest stamp collections, started by her grandfather.

In the lists of the rich $500 million is not very impressive.  That is because most of her wealth is tied to her position and belongs to the Crown Estate and not to her personally. That includes $10 billion worth of property, plus Buckingham Palace, worth an extra $5 billion approx, and the royal art collection.
She also receives from the government an annual  stipend of $12.9 million.

Of course, that $500 million personal wealth is only an estimate.  It would be odd if someone in possession of that amount of personal money did not follow the suggestions of her advisers and place some of her money off shore.  I suspect we are looking at the tip of the iceberg here, because of course the figure given concerns only those assets that can be readily traced.

(I've given value in dollars, following Forbes research).

Tomorrow, let's look at what we know of the financial affairs of her son, the heir to the throne, Prince Charles, and his sons, including the bridegroom to be, Prince William.

Offshore Banking, Numbered Accounts, and bye bye UBS

This is about bank privacy in the age of Wikileaks.
If you want expert advice of course you would go to a financial adviser. What follows are my general thoughts on offshore banking, from the point of view of the very interested observer. And it involves much talk about the IRS (the tax collecting arm of the US Treasury).

First, it needs to be said, and said often, that these days the majority of people go offshore for perfectly legitimate reasons, being more interested in asset protection and capital preservation - and privacy and not having their details leaked all over the internet - than anything to do with tax.

And remember, tax planning, tax avoidance is NOT illegal. Tax evasion is.
The United States Supreme Court has stated that "The legal right of an individual to decrease the amount of what would otherwise be his taxes or altogether avoid them, by means which the law permits, cannot be doubted." See Gregory v. Helvering.

After the UBS/IRS storm a lot of investors, not surprisingly, are wary of Swiss banks.



You're a beautiful little country, Switzerland,
but we're saying Good Bye!
(photo from Switzerland.trips.com)

 Privacy is an important part of international planning and the feeling now is that privacy is under threat in Switzerland.

There has been a big fall-out from the UBS debacle, when the bank handed over names and private details of 4,450 of its clients to the American I.R.S. UBS has closed thousands of accounts where American residents or citizens were involved as signatories, including those who had been with them for decades. I make no more comment on the behaviour of UBS than to say this tells me all I need to know about Swiss banking.

Sadly but understandably after all this, Americans are not these days sought after as clients and their options are becoming limited.

So, for offshore banking, where are we now?

In earlier days one was recommended to the smaller Cantonal Banks in Switzerland, small local banks unknown outside their local area of Switzerland, who operated *numbered accounts (see below) and who did not outsource yet had the sophisticated expertise of their bigger cousins. The cantonals were thought to be safer, and because of their low profile less likely to be the target of people like the IRS. There are 24 of these small commercial banks, who account for 30% of Swiss banking business.

However, the IRS have opened branches all over the place, and are bustling about the world busying themselves with everyone's private affairs, and are at this moment chasing one of the larger cantonals, Basler Kantonalbank, and prosecuting a former UBS banker turned investment adviser, for advising his American client to conceal a cantonal account from the IRS. So that's the end of Cantonal Banks for most people. And Switzerland, too, as far as I'm concerned.

The fact is that, in the climate created by the IRS, no financial advisers or banks want anything to do with the unfortunate American client these days, because they would expect to have the IRS breathing down their necks at every turn.  It's as though the IRS doesn't want Americans to take their money out of the US.  America of all places is the land of  the free but these days Americans don't seem to have much freedom of movement with regard to their own money. It;s more a case of  'listen up, dude, keep your money at home or we're going to hound you to hell and back'.

*(All bank accounts are numbered, of course. But what is traditionally meant by the Numbered Account is one which does not appear on the bank's computer system. Your name and details will be in the bank's vault, and accessible and known only to a very few people, often just the President of the bank and one other highly placed person. The Wikileaks problem only arises when your private details are accessible to comparatively junior members of staff, who have no real stake in the bank, and usually have a grudge against their employer, and are simply looking to make money through their inside knowledge. So, in these days of Wikileaks, it is essential to have a classic Numbered Account as described above.)

So, if not Switzerland, where?

We have to refer to citizenship here. These days, because of the IRS, US citizens' options are more limited than, say, Canadians or Australians - many offshore banks no longer accept Americans as clients.

But even if you are a European, including UK citizens, you have to be careful. For you, the European Union Savings Tax Directive applies, so you must look for one of the tax-haven banking countries that is not a signatory to this treaty. That cuts out Switzerland (see what I mean), Andorra and the Cayman Islands for a start, and means you must look further afield to places like Panama or Singapore.

Obviously, Singapore has attracted a lot of attention, particularly from American investors. But again, it seems to me one has to be careful. Canadians might be OK, but be aware that both the EU and especially the UK, have strong influences there, and have proved very antagonistic to quite legitimate offshore banking.

Anyway, Europeans are not the target market for Singapore, though they are generally welcome. And Americans? They will be accepted, but the number of banks willing to work with Americans is smaller, I hear, and the entry level in terms of minimum deposits is quite a bit higher.

Personally, I agree with the advice that it's better to go for less high profile banks, and most certainly a bank that does not have offices or branches in your own country. And no out-sourcing. Glossy ads and high profile marketing attract far too much attention.  And do not go for convenience. Keep as far away as possible, geographically and culturally, from your home country and the places where all your fellow countrymen do their offshore banking.

For Europeans, think Latin America, maybe Panama and Uruguay. For Americans, look in the more obscure corners of Europe. But basically, look around and check them all out for yourself, because everyone's requirements are different.

And look for the culture of the bank and of it employees. Because we now have the added problem of the leaking culture, the disloyal, grudge-bearing syndrome of those that take their employers wages and then turn on them and their clients and sell private information to the highest bidder. And don't tell me there's any other nobler motive. It's done for money, pure and simple.

Insist on a real Private Numbered Account.

And monitor the situation the whole time, because things, institutions, laws, change - so keep your eyes on your investments, don't leave it entirely to your advisers, check everything frequently and keep watchful.


And Good Luck.

The Good, the Bad, and Swiss Banks

When I was a child I was taught that there were only two certain things in life: death and taxes. When I became a teenager, I amended that. There were three things that were certain: death, taxes - and the privacy of a Swiss Bank account.

In an uncertain world, you could put your faith in the numbered account of a Swiss bank, and know that your assets were safe, hidden from prying eyes, accessible only to yourself. In a world in which you could trust no-one, the one exception was the Swiss bank.

Now death and taxes reign supreme. As for the Swiss banks - how are the mighty fallen.

A year or so ago, after a protracted, bitter fight with the American IRS (the US Treasury office that deals with income tax affairs), UBS (United Bank of Switzerland) caved in and handed over many names and details of its clients' private financial affairs.


counter hall of UBS Zurich

Following this painful episode, new legislation was put into place making it more difficult, for instance, for plundering rulers to open accounts in Switzerland.

What now is the position of the Swiss banks? If discretion and secrecy have gone, what rules are we left with? UBS have frozen the funds of several dictators in the past few months. Why? Let's take the case of Hosni Mubarak, the fallen former President of Egypt.

UBS held funds for Mubarak for years, apparently quite happily, with no reservations, and considerable profit to themselves.

This situation lasted until Wednesday, 10 February 2011.
On Thursday, 11 February, Mubarak left office, and retreated to his home in Sharm-el-Sheikh. Within two hours the bank had frozen his assets for approximately 3 years.

A couple of questions come to mind. Under a freeze, does a bank still take a fee for holding the assets, and can that bank still lend that money out at interest? UBS do not at this time appear to be returning it immediately to the Egyptians, though, to be fair to the Swiss, they have an extremely good record recently in returning money to the country of origin.

And James Nason, of the Swiss Bankers Association, speaks forcibly in defence of Switzerland in that regard:
" The case of the late Nigerian dictator Sani Abacha was a classic example. The Swiss investigation into Abacha funds at Swiss banks revealed that a substantial proportion of his plundered funds had first been laundered by banks in the US and UK. A subsequent investigation by the UK banking regulator (FSA) in fact revealed that between 1996 and 2000, 23 British banks laundered some USD 1.3 billion of Abacha’s illicit assets. In September 2000 Nigeria’s ambassador to Switzerland, Mr. Ogbe Obande, told Swiss Radio: “I’m happy to say without equivocation that so far Switzerland has given the best cooperation to Nigeria in its quest to recover the looted property stashed in banks across Europe and the Americas.”


Switzerland remains the only country in the world to have returned Abacha funds to Nigeria and Nigeria remains frustrated at the lack of cooperation from the UK and US. Yet the media continue to give the impression that Switzerland was the only country whose banks accepted Abacha funds.


But one can't blame people for asking - if Mubarak is such an offensive client, why did they accept his money in the first place? He's still the man he was, and the money they're holding is still the same money they've been holding, I presume for some time.

How do the Swiss themselves explain this? James Nason has been telling Robert Brookes of http://www.swissinfo.ch/ that Swiss banks are obliged by legislation to stick to strict regulations when opening and handling accounts.

"There are very strict procedures in place, so-called due diligence procedures, basically "know your customer” rules," he says. "First the bank has to decide if it wants a business relation with this person. If you’re a so-called “politically-exposed person” (Pep), that means somebody holding an important public office in a foreign country, the bank has to assess how much of a legal or reputational risk you might pose.


If it decides to go ahead, one basic question is: Can you prove your identity? The banks are obliged by law to verify the identity of the client so they will want to see some kind of official identification document. Then the third and a very important step is to find out: Are these your assets you’re bringing to the bank or do these assets belong to someone else? The bank is also legally obliged to find out who the beneficial owner of the assets is or are."

Know your customer. Unless Swiss bankers all live in monastic seclusion high up in the Alps and never read the papers, how could they not know of Mubarak. He was a world figure, had been in charge in Egypt for 30 years, the bank had 'known' him and his character and his way of running his country, for years.

Presumably, when opening his account, they had inquired "Are these your assets you’re bringing to the bank or do these assets belong to someone else?"

And, presumably, the answer given was satisfactory, otherwise they would have refused him as a client.

Though in defence of the Swiss, it should also be pointed out that sometimes monies paid into a Swiss Bank have already passed through other banks, say in the US or the UK, where the 'know your customer rules' are not as strict.

Mr Nason also explains that they "put clients in different risk categories, so for example an 80-year-old grandmother from the next village would be a low-risk client whereas a 28-year-old casino owner from St Petersburg, for example, or a defence minister from a country notorious for corruption would obviously be considered to pose a higher risk."


One would assume the President of a country notorious for corruption would pose as high a risk as a defence minister. Certainly, immediately Mubarak fell from power, the bank took a strong moral view and froze his assets.

Mr Nason goes on: "There are very clear regulations in place. If a bank notices a suspicious transaction or it has well-founded suspicions that something like money laundering is going on, the bank is obliged by law to freeze the account and report it to the authorities, the Money Laundering Reporting Office. In some countries a bank would have to wait for a court order in order to freeze the funds but in Switzerland a bank can act on its own initiative. The authorities then have five working days to investigate and then they will tell the bank what to do."

Things now being as they are, one wonders why anyone these days would place their money with a Swiss bank who assesses a client as suitable, strikes a contract with that client to look after their funds, maintains that position for years, and then in a matter of two hours turns on the client, and freezes all their assets. If Mubarak's money was legitimate when he was in power and the bank accepted it, then surely it was still legitimate when he was no longer in power?

Swiss authorities explained the quick freezing of the account by saying it was taken "to avoid any misappropriation of Egyptian Government assets."

That doesn't quite answer the question.

I'm not discussing morality here - it's a murky area, one person's morality is another's immorality - I am simply looking at the business side of things.  But if morality comes into it, then surely it comes in on both sides. 

A bank is in the business of attracting wealthy clients, offering them expertise, protection for their assets and advice. That is the contract they strike with the client.  Surely, if they take the client's funds, earning good profits out of doing so, they owe some loyalty to that client. Wouldn't it be reasonable, when seeing that client heading for the rocks, to give them some advance warning - something along the lines of 'look old man, your future is not looking good, we advise you to remove your money from our bank pdq otherwise we will be forced to freeze your assets.'  Whatever the banker thinks of the client privately, he has taken the money, entered into a deal with the client and used it to the advantage of his bank. 

Mind you, even as I write this a little voice in my head says softly are you sure freezing an account is exactly what you think it is, are you sure there aren't angles you've missed? No, I'm not sure, because money is a complex creature, where money is there will always be angles, tricks of the trade, ways around things - angle within angles!  I can think of a couple myself . . .


There's no denying that the agonising battle between UBS and the Americans has cast a very long shadow on the Swiss banks.
And regarding the rash of frozen funds lately, there does seem to be something interesting happening on two fronts, both in relation to the rich and the Swiss Banks, and attitudes by the Swiss Banks to American clients.

More of than on the next post - and where to put money now the Swiss have fallen from grace.

(You can read the whole interview with Nason at www.swissinfo.ch dated 1 February 2011.)

the photo of UBS is from a 'wallpaper' site which encourages me to pass the contents of the site onwards, to facebook etc, so I take it I am able to use what is a very good photo).





It's the money, stupid

Who says money can't buy you health?  Below is the list of the average age of death of citizens of various countries.  Look who is at the top.  Good old Monaco. See? Being rich is good for your health. Which should motivate everyone to get out there and make as much money as possible.

Remember the words of the old song:

What happens when you're 70,

Must come a time, 70,

When you're old and it's cold

And who cares if you live or you die.

Your only consolation's the money

You may have put by.



The Prince's Palace, Monaco 



The Casino, Monaco

               

        Monaco          89.8         

Japan              82.2

Australia         81.7

Canada           81.3

   France            81.l    

Italy                80.3

Ireland            80.1

UK                 79.9

Netherlands    79.6

Germany         79.4

U.S.A.            78.2

China              74.5

India               66.5

Russia             66.
Angola         38.5

(with thanks to the late, great Lionel Bart for the lyrics quoted above).

GOLD ETERNAL

This is the second piece about gold I 've done recently. That's because I love gold. I love its beauty, I love the sheen of it, the way it glows magically in a softly lit room or against a dark background.  But I also love it because it's the only thing in the shifting, unstable world of fianance that is real. In the end, when trouble really hits and all that currency paper and coinage is valueless, gold will still be there, glowing amid the revolutions and the war and the flames. Gold is eternal money.

 Gold is what it is. It doesn't represent anything but itself.  It's not made by man. And it can't be destroyed by man. It doesn' t react with water. It doesn't corrode. It can be melted but that doesn't change its value. It's still gold, pure intrinsic wealth.

That's why the really rich don't bother trading it.  They keep it, and when they die they pass it on to their children.  It's the ultimate insurance, the ultimate security.

The stock market may collapse, your great houses fall about your ears,  the country you're in disintegrate, all you may be left with is your gold. And that is all you need. Because gold is eternal money.

The last post on gold discussed which nations hold the most gold.  At No 1 was America.  The US keeps its stock of gold at Fort Knox.  And below is one of the most awesome photos I've seen.  It was taken at Fort Knox and it shows a room lined from top to bottom with solid gold bars.   Imagine standing in the middle of that room. Breathtaking.  And I wonder how many rooms there are like that.

Photo courtesy of solarnavigator.net - I site I came upon accidentally, and I thank the site for a really great photo.

This post takes another look at gold economically, this time from the point of view of what the Telegraph calls 'gold gobblers' - those nation who have the most passion for acquiring gold.  Wise nations.

India

India had the highest consumer demand for gold in 2010. The country bought 963.1 tonnes of the precious metal, valued at $38.1bn (£23.4bn).
The main driver behind Indian demand is jewellery, with a 47pc increase in Q4 2010 demand compared with Q4 2009. This was boosted by Diwali celebrations, the biggest gold consumption period in India.

China and Greater China
Greater China lies in second place in terms of gold demand, although when combined with demand from the mainland, it easily sits in top spot.
Consumer demand was valued at $24bn for 2010, with demand on the mainland (ranked in third place) valued at $23bn last year

USA
US demand for gold jewellery has been slowing over the past 10 years, while investment demand has risen. Demand stood at 233.3 tonnes in 2010, with a value of $9.4bn.

Germany
European gold consumers were mostly driven by concerns over sovereign debt in 2010. and fled to gold for safety. Germany have even started offering gold in vending machines in Berlin's first 'Gold To Go' gold bar dispenser at Galeries Lafayette, where customers can buy gold bars weighing between one and 250 grams.
German demand stood at 126.9 tonnes in 2010, with a value of $5.04bn.

Turkey
Following several quarters of decline in the Turkish jewellery market, Q4 demand in 2010 was up 7pc compared with Q4 2009. Total demand in 2010 was 114.6 tonnes, valued at $4.5bn.
Consumers in Turkey are now focusing more on buying 22 carat gold, rather than 14 carat, in recognition of gold's investment properties.

Switzerland
Switzerland, which is one of Europe's largest gold investment markets, saw total gold demand of 91.7 tonnes in 2010, valued at $3.6bn.

Vietnam
While gold jewellery demand outside India and China lagged behind in 2010, Vietnamese consumer demand remained robust.
Total demand reached 81.4 tonnes in 2010, with a value of $3.2bn.

UAE
The UAE experienced a 6pc decline in gold jewellery demand in 2010. However, gold demand for investment rose 37pc.
Total demand stood at 72 tonnes in 2010, representing a value of $2.8bn

I never agreed diamonds were a girl's best friend.  Diamonds can be destroyed, throw one in the fire and it burns down into the carbon it basically is.  You can't do that with gold. Gold is forever.

Man's best friend lives the good life in China.

Money changes everything, sometimes in the most unexpected ways.

With wealth and the rise of a prosperous middle-class in China, the dog has come into its own. 

The dog loving community is on show everywhere, and its beloved pooches will be decked out in jackets, and smart cravats, with bows in their hair and bells on their toes - well, on their feet,  anyway. 
                                                                   

(AFP in Daily Telegraph)

Sad, you think? Think again. Think Money.

That's just what 34 year old Tang Yang thought, when he realised his girlfriend was spending approx. £45 a month feeding her pet rabbit.

He dreamed of a sort of Facebook for pets. And so www.goumin.com (loosely translated as dogpeople.com) was born.

Now, seven years on, Mr Tang already has 530,000 pet owners registered on his site, with 600 joining every day. He reckons he will have no trouble raising the $10m (£6.2m) to fund his expansion plans, with a possible public listing in a few years.

It's estimated that pet owners spend somewhere around $2 million a years on their pets.

It's the same old story. Find what lots of people like and, regardless of what you think about their choices, you'll find that's where money is to be made.

However, with wealth come the problems of over supply and flooding of the market.  So much so that a new law has had to be rushed through. From May 15, only one dog per houseshold will be permitted. However, people who already have two or more licensed doggies can keep them.

But from May 15th puppies must be given to eligible no-dog households or government-approved agencies, before the pups are 3 months old.

Rather sensible really. It's all apart of the regulations concerning the environment, in regard to unscooped waste and sanitation rules.

So doggies like this buddle of fluffy fur with panda eyes, will have to be as well trained and well behaved as their middleclass owners the world over.  (photo courtesy of Daily Telegraph, AP).

Yes, it's a dog's life in China these day.

Foolish dictators and clever bankers

On the L. The Channel Islands

I do wonder sometimes about the commonsense of the rich.  I'm not concerned with morality, too much hypocrisy hovers around that concept. But I am surprised at the lack of  foresight that so often brings disaster down upon the heads  of those leaders we are seeing tumbling from power at the moment.

Take Mubarak.  Some people have thrown around ridiculous figures suggesting his wealth is of the order of 70billion pounds. But even if he had only a paltry l or 2 billion pounds, I question the wisdom of how he handled it. Because the way he handled  it  made him very unpopular, and now he's lost the lot.

It seems such an unnecessary disaster to have brought upon himself.  Over the years he has been in power in Egypt,  commonsense should have told him that  if he donated a portion of his large private fortune to his country -  perhaps set up an efficient health service, or revamped the economy so it provided more jobs for more people -  he would still be left with loads of money, plus, in his position,  the endless capacity to make more. And by putting some of his gains back into the public pot he might  have been loved by his countrymen and ended up dying a great and admired leader. 
As it is, he has ended up with nothing, with all his funds frozen by some Swiss bank, and everyone hating his guts.

The same has happened to the Tunisian top man, Zine El Abidine Ben Ali, who has taken refuge in Saudi. The Ivory Coast President, Laurent Gbagbo, (disputed since a controversial election decision) has also had his assets frozen by the Swiss. 

You'd think that when the first fallen dictator had his assets frozen, the others would move pdq to get their money out of the hands of the Swiss banks whilst they were still in power. But they don't seem to learn that they can't rely on the Swiss Banks when trouble hits. A bit slow on the uptake, you could say.

 In a previous post I spoke about the increasing gap between the rich and the rest of the world - and the fact that history shows that gap is dangerous and ultimately ends in trouble, and often in revolution. In many parts of the world, we're now seeing that happen.  Yet, if the rulers in each case had not been so greedy, and had distributed a portion of their great wealth to ensure the wellbeing of their citizens, the end result would be good karma  for them and they'd still be as rich as Croesus anyway. Why is it some of the rich rulers don't see this?

With corporations it's a very different story.  A ruler's first job should be to run his country well, and look after its citizens in a civilised way. A corporation is different. It is a business.  And when it's a bank, its purpose is to make money and safeguard the money of its depositors and its shareholders.

Take Barclays, for instance.  A likely bunch of lads, much in the news this week.

Barclays made £11.6 billion in 2009.  Astonishingly, the total tax it paid on this in the UK was only about £113 million. 
This has obviously outraged a lot of people.  Naturally. Especially as the UK desperately needs all the tax revenue it can get.

Let's try and untangle some of what's going down here with Barclays. This is as I see it.

Of the overall total tax bill Barclays paid of £1.3billion, £200 million or so related to the sale of Barclays Global Investors' (BGI) - (and the large profit involved in that sale is due to the hugely generous rules on capital gains by corporates introduced by Gordon Brown, a great friend of powerful corporations.  Did you think it was only Tony Blair  who liked the rich?  Check again,  Brown cosied up to the rich, too. ) -  and the rest to ordinary activities.

In June 2009, BlackRock agreed to acquire Barclays Global Investors (BGI) from Barclays for about £13.5 billion - this was reported to be one of the largest deals in the money managment industry.
Under the terms of the deal for BGI,  Barclays received $6.6bn in cash and a 19.9pc stake in BlackRock, worth $6.9bn.

The deal was also said to produce a windfall of about £607.5m for 200 of the most senior staff at BGI, including the truly dazzling Bob Diamond, the president of Barclays, who was said to receive approx. $30m,  and joins the Black Rock board. (And who is rumoured to be in line for a £9m bonus from Barclays).

In 2008, if you remember, unlike several other major banks Barclays resisted taking a bail-out from the Government as crisis swept the through the system, so this injection of cash  strengthened Barclays' capital position, and its financial position was given a green light from the Financial Services Authority.

 The current rate of corporation tax in the UK is 28% but Barclays only pays 23%  -  good tax planning, that. Global banks like Barclays, which has hundreds of overseas subsidiaries, including many in tax havens,  do not generate all of their profits in their domestic market.

Barclays biggest commercial loan book is in the US, but its biggest retail operation is in the UK. Around 78% of its profits come from Barclays Capital, believed to be largely located in London and New York.  Yet only 10% of Barclays worldwide corporate tax is paid in the UK.

This seems to be because Barclays,  a UK bank , is able to offset all its head office costs and all its losses on Barclays Corporate (and there may be losses in Europe, too) into the UK to offset what profits it does make here, so paying a astonishingly low amount of tax in its home country, the UK. 

Barclays says:
"The corporate tax affairs of an organisation with the global footprint of Barclays are complex and not reducible to simplistic comparisons.  Any link between Barclays Group profits and the amount of tax paid to the UK government is inappropriate - there is no direct correlation between the two." 

The Cayman Islands

A disingenuous reply, of course. As though having 30 subsidiaries in the Isle of Man, 38 in Jersey and 181 in the Cayman Islands,  is unconnected with tax? It is connected with tax, but nothing of what Barclays has done is illegal.  They are a business operation and their job is to maximise their profits, not to help bail out the UK.

On the other hand, the job of the UK government is to protect the interests of its citizens and get the economy back on track as soon as possible.  So the fact that income tax which might have been paid into the Treasury coffers, thus helping  to ease the present financial climate,  has been diverted to lower-tax territory,  creates an awkward situation.

 I am in favour of tax havens. Often, my hard earned money is taxed and used incompetently, and wasted by the Government, or spent on projects with which I do not agree, and to which I do not willingly contribute.   However, I also strongly believe in the tax system, to fund education, health care, the police for instance, and I would always pay what I am legally bound to pay.  But if I were wealthy and had a lot of money left over, having done my duty by the Inland Revenue I would certainly move that money out of the reach of the Government and put it somewhere safe, in a low taxed territory. And then,  I would have more of my money to devote to causes in which I passionately believed, and where I could see for myself that the money was
being spent efficiently and doing good.

Tax avoidance, in other words intelligent tax planning, is perfectly legal according to the law of the land. Of course, when the rich, and huge corporations like Barclays, do just that, the Government loses much needed tax revenue.  But after all, it's the Government that makes the law of the land and the Government needs to encourage the rich to come to the UK because it's profitable for the country.

It is a balancing act for the politicians and the economists  and in times of prosperity the system works well. It's only in times of trouble, like the present, when the gap between the rich and the rest of the population becomes too obvious and too large, that resentment begins to build up.

And that has the potential to lead to trouble.

The Rich Really Are Different - And You'd Better Believe It

If you were rich, you could buy this apartment on 5th Avenue in New York.

or you could gaze out on Central Park from the balcony of this apartment below which used to belong to Madoff - before he was caught, of course.

So let's talk about being rich and what it means in the year 2011.

London is still the 24 hour centre of the global financial world. It is big in stocks and shares, but it's the intangible, the international that it specialises in. And it's the international bit that we're concentrating on in this post.
1.7 trillion dollars of currency passes through London's trading Rooms every day,
2/5th of the global market
70% of eurobond business is done in London
The City contributes 10% GDP to the UK economy.
In the City, good old London still rocks!


Alan Greenspan was, from 1987 - 2006, the legendary chairman of the United States Federal Reserve, in other words he was head of the central banking system of the United States of America, one of the most influential men in the world, and the high priest of free market capitalism.

Discussing our present economic situation, Greenspan says, "Our problem basically is that we have a very distorted economy, in the sense that there has been a significant recovery in our limited area of the economy amongst high-income individuals...
"Large banks, are doing much better and large corporations are in excellent shape. But the rest of the economy, small business, small banks, and a very significant amount of the labour force, which is in tragic unemployment, long-term unemployment - are pulling the economy apart. They are fundamentally two separate types of economies."

And he is right.

Two huge trends have developed over the past 30 years that have seriously reshaped the world's economy.

One is a surge in the size and connectedness of international markets, which has created a burst of global prosperity that has lifted hundreds of millions out of absolute poverty and into the middle class, particularly in the rising Asian power-houses of China and India.

But the second trend, even as the global economy has grown overall, is that within countries the gap between rich and poor has increased. For example: In the US, between 2002 and 2007, 65% of all income growth went to the top 1% of the population. And the divide has not only opened up in the US and European countries, the gap has developed in the booming emerging markets, too. The gap between rich and poor in Communist China is as big as that of the USA.

On one side you have the super-rich.
On the other side? Everybody else.

This dramatic split has been named 'the plutonomy' - it describes a society where the majority of wealth is controlled and consumed by an ever-shrinking minority of the very very rich.

So obviously, the economic growth of that society becomes dependent on the fortunes of that very very rich group.

And that rich group are different to the rich of previous years.
For the most part, today's rich are not a leisured, landed gentry of inherited wealth.
Emmanuel Saez, an award winning economist who is one of the premier students of the super-elite, has found that in 1916, the richest 1% of Americans received only one-fifth of their income from paid work. In 2004, that figure had tripled, to 60%.

Many of today's plutocrats are the beneficiaries of globalisation. And even those who made their money at home have figured out that to make more they need to embrace the global economy.

As a result, there is a growing trans-global community of peers who have more in common with one another than with their countrymen back home.
They belong to no country. They acknowledge no borders.
Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today's super-rich are increasingly a nation unto themselves. They have, in fact, created their own virtual country.

 If you lived in the country of the rich you, too, could watch TV in your deliciously modern  (and rather) macho dream of a pent house in Moscow, in the wonderful Triumph building, designed by Geometrix, complete with Russian bear bearing down on you from the ceiling.  And you could sip your vodka in the early evening while viewing Moscow from your balcony.  (courtesy of Adelto)

One of the places where that virtual country meets up is in Davos, Switzerland, at the annual meeting of the World Economic Forum (WEF), the premier convener of the global super-elite. But there even the very very rich are getting worried that income inequality has grown to extremes.

The Forum's Global Risks report for this year's conference reports that "Economic disparity and global governance failures both influence the evolution of many other global risks and inhibit our capacity to respond effectively to them"

So the global risk context in 2011 is defined by a 21 Century paradox: as the world grows together, it is also growing apart.

And here we have the dilemma.

In today's hyper competitive global economy we need our super rich and the innovative companies they create more than ever. But they need us too - as consumers, as employees, as fellow citizens.

But here is the lesson of history. In the long run super elites can only survive in one of two ways - by suppressing dissent, or by sharing the wealth.

Seems it pays sometimes to be generous and share a little of your billions.

(many thanks to Paul Mason and Chrystra Freeland).



Julian Assange in court Monday

Tomorrow, 7 February, Julian Assange, the face (and heart) of Wikileaks, faces a court hearing to fight extradition to Sweden concerning sex assault claims made against him by two Swedish women.  The hearing is expected to take two days. There is suspicion that the accusations by the women are politically motivated.  The judge is expected to defer the decision.  If the ruling goes against Assange, he will appeal the decision all the way up to the supreme court.

Sofia Wilen and Anna Ardin

(Photos courtesy of Whyfame.com posted Dec 8 2010, but a number of sites have photos of the two women.  One site has also posted their addresses and phone numbers.)

Assange himself fears being eventually handed over the USA, where he feels he would not get a fair hearing and could face the death penalty for violation of the Espionage Act of 1917.  Because of the current extradition proceedings between Sweden and Britain, handing him over to a third country would require approval from both countries, says Nils Rekke, legal chief at the Stockholm prosecutor's office. Rekke notes that Britain is a closer ally to the United States.


According to the Swedish Justice Ministry, since 2000, the U.S. has requested the extradition of seven citizens from Sweden. Five of the requests were approved, and two were rejected because the suspects were no longer believed to be in Sweden.

Britain and the U.S. signed a fast-track extradition treaty in 2003 intended to speed the transfer of terror suspects. Since it came into force in April 2007, 23 people have been extradited from the U.K. to the U.S., according to British government figures. Extradition lawyer Karen Todner said Assange would probably stand a better chance of resisting extradition to the U.S. if he were in Sweden than if he were in the U.K.

Some questions arise as to whether the Swedish government has been influenced by pressure from the US to seek Assange's detention. However, most Swedish legal experts agree prosecutors would never accept orders from politicians, which is illegal.  But supporters of Asange note that Sweden has responded to US pressure before, including in the crackdown on file-sharing site The Pirate Bay, and the secret rendition of two Egyptian terror suspects.

GOLD IS STILL KING

Leaving aside for moment the subject of power and power plays, as in Egypt and Wikileaks, let's talk about the other great subject, wealth.
We saw in Tunisia that when a leader/dictator falls, or runs into trouble, the first thing they do is to ship gold out of the country - and rumour says that Mubarak's family has already shipped tons of gold to the Netherlands.

In time of civil breakdown and real trouble, gold is still king.

Maybe the psychologically flawed and incompetent UK ex Chancellor, Gordon Brown, forgot that, when between 1999 and 2102, in 17 auctions,  Brown as Chancellor of the Exchequer, sanctioned the sale of 395 tonnes of gold, 60% of the UK gold reserves, just before a protracted bull market.  In other words, at the bottom of the market, at the lowest possible price, announcing in advance that he was going to do so, thus ensuring a loss to the country of 2 billion pounds.

Critics say that signalling such a large sale of bullion to gold traders, the Government helped to drive the precious metal to a 20-year low.

Philip Hammond, shadow secretary to the Treasury, said: "Gold traders confirm that it was because the Government announced in advance that it was planning to sell such a large quantity of gold that the markets became depressed. The low price Gordon Brown got for selling our gold wasn't caused by bad luck. It was a staggering display of economic incompetence that has landed taxpayers with a $7 billion black hole."

Figures released by the Treasury since show that the total proceeds from the sales was around $3.5billion. According to a Parliamentary answer, if the gold was sold last month, on December 15, it would have raised $10.5billion.

The difference - $7billion - would be worth £4.7billion if the proceeds were converted into pounds yesterday.

Returning to the present, the price of gold reached an all-time high of $1432 per ounce in December,  rising 29% in 2010 following uncertainty in the equity markets and European sovereign debt problems.

The biggest individual holders of gold - Central banks, International entities and governments - are believed to account for approximately 16.5 percent of the world's gold, holding about 29,978 tons.

So out of interest, let's look at the chart telling us which countries hold the most gold. Here's the top 15. Guess who is at No 1? Yes, you're right.




gold bar and roulette wheel

 
1. USA

Value: $387.32 billion dollars

Tons: 8,965.6

2 GERMANY

Value: $161.99 billion dollars

Tons: 3.749.8

3. IMF

Value: $135.56 billion dollars

Tons: 3,137.9


4 ITALY

Value: $116.75 billion dollars

Tons: 2,702.6

5. FRANCE

Value: $115.97 billion dollars

Tons: 2,684.6

6. CHINA

Value: £$50.90 billion dollars

Tons: 1,161.9

7 SWITZERLAND

Value: $49.53 billion dollars

Tons: 1,146.5

8. RUSSIA


Value: $36.91 billion dollars

Tons: 854.5

9 JAPAN

Value: 36.43 billion dollars

Tons: 843.5

10 NETHERLANDS

Value: $29.67 billion dollars.

Tons: 675.2

11. INDIA

Value: $26.56 billion dollars

Tons: 614.8

12. EUROPEAN CENTRAL BANK

Value: $23.88 billion dollars

Tons: 522.7

13. TAIWAN

Value: $20.17 billion dollars

Tons: 466.9

14 PORTUGAL


Value: $18.21 billion dollars

Tons: 421.6

15 VENEZUELA

Value: $17.33 billion dollars

Tons: 401.1

However, I have heard it said that gold is the most secretive of all markets, so all published statistics from whatever the source may be open to question!
(Photos courtesy of fotosearch.com).

BEHIND THE KILL SWITCH

Returning to my post on the switch-off of the Internet in Egypt on the first day of the current protests, Laura Flanders blogged an interesting piece in The Nation a couple of days ago, on the Social Media Off-Switch.

A US-based company seems to be the maker of the Internet off-switch. Tim Karr of Free Press notes the US company Narus, sited in California,  was founded in 1997 by Israeli security experts.

(Free Press is a liberal non-profit reform group who are, in their own words, "working to make media reform a bona fide political issue in America. Powerful telecommunications, cable and broadcasting companies have plenty of lobbyists to do their bidding. We're making sure the public has a seat at the table, and we're building a movement to make sure the media serve the public interest.")

As the lobbyists put it: “Narus is the leader in real-time traffic intelligence for the protection and management of large IP networks…. Used by the world’s service providers and governments, Narus has developed and patented state-of-the art algorithms to detect network anomalies and manage unwanted IP traffic. Additionally, Narus has the unique ability to precision target and fully reconstruct all types of IP traffic, including e-mail, Web mail and instant messages.”

Egypt Telecom, the state-owned communications company, are a client of Narus. Others include Pakistan and Saudi Arabia. During Iran’s protests in 2009, dissidents were tracked, imprisoned and in some cases executed by the use of what seems to have been similar technology.

Narus is owned by Boeing, the nominally US-based company that has outsourced jobs all over the world—and the US State Department has been promoting them. So I guess the US has also bought this tool for themselves - though it's obvious that any country would find this an extremely useful tool to have in times of trouble.

TOR, EGYPT AND ANONYMITY

Below another great photo courtesy of The Independent. Protesters in Cairo fleeing tear gas

Following on from the previous piece on authoritarian governnments' ability to cut their citizens off from access to internet, there was a very interesting and explanatory piece in the Boston Globe Sunday, discussing TOR, which I refer to below:

TOR is a piece of free software to enable anonymity on line. It prevents somebody watching your Internet connection from learning what sites you visit, and it prevents the sites you visit from learning who you are.
It was formed in 2001 after two MIT (Massachusetts Institute of Technology) students developed the  software with a US Navy laboratory.

According to the Executive Director of Tor, over the past 3 days 120,000 people, most of them Egyptian, have downloaded Tor software. It helps activists protect their identity from surveillance by repressive regimes, and get around blocked sites.

 Since only the most internet savvy know how to use such software, there is enormous value in training people to use it,  said John Palfrey, co-director of the Berkman Center for Internet and Society at Harvard University.

 Iranian activists downloaded its software en masse duirng the massive protests after the contested 2009 presidential elections.  Chinas has repeatedly tried to block Tor downloads and denied visas to the Tor activists who have trained people from over 20 countries, in workshops in Hong Kong and Europe.

 One of Tor's main software developers, Jacob Appelbaum, traveled to Cairo at the end of 2009 to hold workshops on how to use the software.  The training clearly paid off, because before the internet 'died' in Egypt last Thursday,  so many people rushed to download TOR that one of its servers crashed.

 A few pathways to the net have remained,  including one ISP (Internet Service Provider) which services banks or the Egyptian stock market.

 To read the original article, google Boston Globe and search for Foreign Activists Stay Coverered Online by Farah Stockman, Jan 30,2011.

THE DAY THE INTERNET VANISHED

 Below is courtesy of the Independent. A great shot of the building of the National Democratic Party, on fire.

As Egypt burns, we're seeing an unexpected use of power, and a pretty scary one, at that -  the arbitrary removal by the authorities of the peoples' main means of communication with the outside world.

One of the most powerful tools in the world today, which is open to everyone, is the Internet.  The Egyptian authorities have simply disconnected the country from the Internet, including Facebook, Twitter etc. and also disconnected the mobile phone network.

Egypt has one of the most advanced telecommunications markets in the Middle East yet shortly after midnight a couple of days ago, internet traffic in and out of the country slumped, Facebook received "only minimal traffic from Egypt, and Google Inc said people in Egypt are unable to access Google and You Tube.

Jim Cowie, chief technology officer at Web-monitoring firm Renesys Corp, says: "It probably doesn't require flipping a switch or pulling a plug.  Network engineers can log into routers and type in text that blocks service providers from sending out a signal.  To shut down the Web, the government likely told network providers to "turn off" connectivity, a legal directive under Egypt's telecommunications laws.

Vodafone said it was ordered to suspend mobile-phone services in selected areas.  "Under Egyptian legislation, the authorities have the right to issue such an order and we are obliged to comply with it", Vodafone explain.

So, while Egypt has opened up the telecommunications market, operators are still controlled by the authorities - in other words, they can be silenced whenever the government wants.

So, the obvious question after this is:  does every country, including the UK and US, for instance, have it in their power to cut us all off from these services whenever they choose to do so?
That's a frightening thought - though I assume that in a democracy, the authorities would never do this.  Come on, they wouldn't, would they? Could they?

For the answer to this, http://www.bloomberg.com/news/2011-01-28/the-day-part-of-the-internet-died-egypt-goes-dark.html It's a great piece.

REVENGE, RETRIBUTION AND ANONYMOUS WARRIORS

Moving away from the light-hearted approach to Wikileaks, and its glamorous leader,  Julian Assange, here's a small piece about the more serious side of things.

The basic subject is, as usual, power.  In the case that follows, we're looking at the power used by the authorities to attempt to deal with the power wielded by the urban warriors on the internet.

The five people, between 15 - 26, arrested yesterday for mounting the revenge DDOS attacks that temporarily crippled Visa, PayPal and Mastercard, after they cut off financial services to Wikileaks, have now been released on bail.

A DOS (Denial of Service) attack works by flooding a server with more network traffic than it is capable of processing. This hinders or prevents the server’s normal operation and sometimes causes its complete failure. In a DDOS (Distributed Denial of Service) attack, as in this case, multiple PCs coordinate the attack.

The arrests are the first in investigations in the UK by the Metropolitan Police's Central 'e' Crime Unit, and are "part of an ongoing investigation into Anonymous which began last year following criminal allegations of DDOS attacks by the group against several companies," Scotland Yard said. "This investigation is being carried out in conjunction with international law enforcement agencies in Europe and the US."

These attacks are illegal in the UK under the Computer Misuse Act and carry a maximum fine of £5,000 or a max. of a 10 year sentence.

The FBI has issued more than 40 search warrants across the US in connection with its investigations into Anonymous.

The 5 arrested are assumed to have links with Anonymous, a leaderless internet-based group, sometimes referred to in the press as hacktivists, though it's not accurate to refer to them all as hackers. Anyone can join Anonymous by downloading software and following the group's instructions, so joining hundreds of other computers, which can be brought into play to mount DDOS attacks. Members are mostly young and male. Since the Wikileaks saga got going, the membership of Anonymous has increased.

 It's ironic that the 5 arrested, though apparently having links  with Anonymous, seemed unable to keep themselves anonymous, as the police found them through their IP (Internet Protocol) addresses, which they hadn't  hidden. There is technology out there that makes one's connection anonymous, so neither the authorities nor anyone can see who is behind the computer.  Of course, maybe the 5 didn't want to hide themselves.  Who knows?  But as they were displaying their addresses for all to see, I'm surprised the police took so long to get to them.

The Wizard of Oz

Julian Assange is a wiz of a wiz, if ever a wiz there was.  Put him, a computer and the internet together, add a big rebellious anti authority streak, a bunch of devoted followers and fans,  and there's nothing much he can't do.   He is a top-of-the-class hacker, an all time uber geek, a punk rock pirate.

And a babe magnet on a big scale.  Just check out the girly sites on the web devoted to this man, with his doe eyes and pale skin bathed in the strange white light of theTV screens and flash cameras that capture his image so regularly. With a toss of that white blonde hair, and a rare enigmatic smile,  he  draws women to him - even though a couple of ladies have been giving him some aggro in Sweden lately. Something to do with condoms, or the lack of . . .

 But there seems to be a protective female shield put up around our boy - remember, it was the beautiful socialite Jemima Khan who put up a lot of the bail money to spring him from prison recently,  and he came out to an adoring throng with phrases like 'I want to have your baby' tossed at him.

Rolling Stone has claimed him for their own - but is this photogenic,  softly spoken, brilliant computer programmer and man-on-a-mission, who has taken on the power of the USA by publishing something like 91,000 classified US documents on the war in Afghanistan, about to crash and burn? Whatever happens, we're not just talking about a pretty face here. Julian Assange has a hell of a lot of courage but he's made some very powerful enemies.

Is he hero or villain? Or just, for all his brilliance, a touch naive -  an extraodinarily gifted product of a very troubled childhood.

He was reportedly born in 1971 in Townsville in Australia.  He and his mother and half-brother spent his childhood fleeing the father of that half-brother.  It seems this man became  a member of a scary cult, led by a female ex-nurse who had her own weird ideas on kidnapping and bringing up children.

In all, Julian was enrolled in 17 schools and six universities by the time he finally came into adulthood.. He took adult education classes in physics and maths at Melbourne Uni and launched himself into the mysterious world of hackers. In 1995 he developed 'Strobe', the first free  port scanner, which allowed hackers to penetrate networks throughout the world. Two years later he developed another piece of encryption software, to allow hackers to conceal their identities when penetrating computers worldwide.

He discussed his expertise in the wonderfully titled 'Underground Tales of Hacking, Madness and Obsession on the Electronic Frontiers", published in 1997.

(Also, along the way, he married and acquired a son).

And in 2006 he put all these stunning computer skills together to set up Wikileaks.

And that's very much an on-going story, for later.

Leaks

It's nearly the witching hour in London so here's a bit of fun to go to bed with:

What more can I say . . .

Doing 2011 the Roman way

Mr Abramovich threw a 5 million pound bash at the complex he bought recently at Governor Bay on St Barts.

Mr A bought the complex, shown on the R, in 2009. (The photo was taken by Laurent Benoit, famous for great shots of megayachts, and the marina at St Barts, where he lives). It comprises 70 acres and cost approx. 90 million dollars, which makes it one of the most expensive private properties ever sold.

 It consists of a cluster of cottages round a main villa, open Balinese bungalow-style buildings,  so it's apparently like you're living on the beach.  Personally, I've never liked the sound of this, a bit like a super version of carry-on-camping - not for me.  I wouldn't turn it down if it was offered, mind you, but I'd sell it on immediately and find something a little more civilised.

As the for the NY Eve do, well, absolutely everybody who was anybody in the entertainment world seemed to be there and they're all listed in the popular papers, all predictable, and so I want bother naming them all. You know who they are, anyway: the surgically beautiful Miss Demi Moore and her like and the shoals of pretty little things who swarm around the big fish as they cruise the world's oceans on their megayachts.

 Lots of money sloshing around and every entertainment money can buy - including underwater speakers and a swim-up bar - but as I've said before, wealth does not necessarily equate with power, and show-biz wealth, outside the flimsy world of illusion the celeb/showbiz crowd inhabit, definitely doesn't equate with real power in the real world.  So, who were the really powerful people at that shindig? As often, the really interesting people didn't get a mention and no doubt very wisely kept well away from the cameras.

 So let's move on, nothing interesting to see here.

And by the photo of Roman in the Daily Maily, he's bored by the whole thing. After all, he's done it so often before.  Maybe he's just doing it for Daria Zhukova ('Dasha' to her friends), his present partner.
This photo was taken by BigPicturePhotos( this is quite a routine one for them, for they do take the most magnificent photos). 

I'm a great admirer of Abramovich, he survived the fire-storm of the fall of Communism. He deserves everything he's got - for his courage, his brain power, and for holding his nerve when so many others lost their's. He remains one of the oligarchs who is still safe in his own country.  He remains a friend of Vladimir. He hasn't made any mistakes. Machiavelli would bow before him. And I mean that as a compliment.

 Intelligence is not much good if it doesn't go hand in hand with the survival instinct. I don't see any intelligence in deliberately alienating  people who have real power, unless you're pretty sure you have the resources and back up to win them round to your views.  Otherwise you end up like poor old unwise Khodorkovsky, once the richest man in all Russia, and now languishing in a prison cell in Sibera. Where's the sense in that?

So that's the end of the NY celebrations - back to more serious things tomorrow.

Seeing 2011 in

Before work starts in earnest tomorrow, let's look at where some of the wealthy and powerful are spending the New Year break.

The Chancellor, George Osborne, is in Switzerland. At Klosters apparently, tho' his office said Davos, where the annual World Economic Forum is held. Of the two I prefer Davos - but there's not a lot in it, the two resorts are only 10km apart and share the same ski slopes.

The Royals prefer Klosters. This gorgeous shot above  is of Klosters at night, (thanks to the skisafari.com site who will tailor-make skiing hols for you, if you'd like to join the royals and George.)

Davos was immortalised in literature in Thomas Mann's The Magic Mountain, and its dry, pollen free air has attracted a lot of health research institutes, who have settled there.

If you need a hotel in Davos, George when last there stayed at the Fluela Hotel, pictured R. It's a traditional 5-star, been going since 1868 and the same family still own it. They say no more than 130 guests and no less thant 90 staff to care for them -  and it's opposite the train station. Crackling log fires and a pianist in the bar - and it greatly endears itself to me because it allows pets.  No charge for the animals, but their food is extra - come on, now, you can't have everything.  I think Mr Osborne shows a lot of taste in having picked this hotel to stay in on an earlier visit.

And where is Mr Roman Abramovich?  Doing something quiet and low key for the New Year,  I expect.  But perhaps not.  Next post coming up.