South West Surrey Compass

03/06/2026

You may have encountered the term, "institutional investors", and wondered what it meant. After all, they seem to own most of the shares in our privatised utilities such as water, electricity, gas and telecomms. I thought I'd look it up. This is what "Investopedia" said:
"An institutional investor refers to an entity, such as a mutual fund, pension fund, or insurance company, that manages and invests large amounts of money on behalf of clients or beneficiaries."

It goes on:
"Broadly speaking, there are six types of institutional investors: endowment funds, commercial banks, mutual funds, hedge funds, pension funds, and insurance companies."

Hmm. So what are endowment funds?
"an investment portfolio with the initial capital derived from donations...established to fund charitable and nonprofit institutions such as churches, hospitals, and universities. Donations to endowment funds are tax-deductible."

And mutual funds?
"a managed fund in which shareholders put their money together to invest in securities (e.g., stocks, bonds, money market instruments)."

And, of course, hedge funds?
"pooled investment vehicles that use flexible investment strategies, such as long/short positions, leverage, arbitrage and swaps to manage risk and enhance potential returns."

Which generates more questions:
long/short positions (a combination of buying and selling positions),
leverage (investing with borrowed money),
arbitrage (taking advantage of price differences across markets), swaps (exchanging financial instruments or cash flows, for example, fixed and floating interest rates).

So much jargon. So little meaning. It's all about ways to make money from money. Essentially these are all different flavours of collections of funds that are 'invested' to try to gain the best return (i.e. highest interest). Usually this is done by professional managers working for large-scale financial groups.

Let's look at an example. Centrica (formerly part of British gas) are 10% owned by Schroders Plc, a "a British multinational asset management company" bearing the name of "the Schröder family, a Hanseatic family of Hamburg". "The Schroder family, through trustee companies, individual ownership and charities, hold 44 per cent of the company's ordinary shares."

Schroders manages £800billion of assets, and its net income in 2025 was £550 million. It owns Cazenove (formerly one of the UK last independent investment banks).

In Feb this year, Schroder was 'acquired' by the US asset manager Nuveen for £9.9 billion.

Nuveen LLC is a subsidiary of TIAA and manages all of its assets. Nuveen manages assets worth $1.4trillion!

TIAA is "Teachers Insurance and Annuity Association of America-College Retirement Equities Fund". It is "a private provider of financial retirement services in the academic, research, medical, cultural and governmental fields". It was created in 1918 by Andrew Carnegie to provide pensions for educators. In effect, it is a pension fund.

A pension fund for teachers and academics, surely they must be good guys, right?

"TIAA is the largest global investor in agriculture, the second-largest grower of wine grapes in the United States (by acreage), and the third-largest commercial real estate manager in the world". That sounds OK...

"TIAA is one of the world’s largest fossil fuel investors, with at least $78 billion invested in coal, oil and gas industries. After the top two coal investors Vanguard and BlackRock, TIAA is the fifth largest holder of coal bonds worldwide with $6.7 billion invested in companies that mine, transport, and burn coal for energy."

WTAF!!!!

This planet, the one we all depend on for every second of life, is something that all 'investors' ought to care about, because no matter how much money you make, you can't breathe without oxygen and you can't live very long without water and food.

But the system is designed so that such considerations do not feature in financial decision making.

28/05/2026

This article exposes the "bond markets won't allow it" argument as complete nonsense. As it says,
"The bond market is not coming to save us from bad political decisions, and it is not coming to punish us for good ones. It is a market for sterling-denominated assets, and it will find buyers as long as sterling exists. The government is the sole supplier of the assets the market depends on, not a supplicant seeking permission to spend. "

Worth a read as it explains what the market is, how it operates, and why most of what we hear in the media about it is wrong.
It also destroys the myth that Liz Truss's budget provoked the "bond market vigilantes" to intervene and bring down her government, and describes what really happened (bad regulation/monitoring of pension liabilities).

Every time someone in British politics proposes funding public services properly, the bond markets get wheeled out like a loaded gun. Spend more on the NHS and the markets will panic. Hire more teachers and investors will flee. Suggest running a larger deficit and the warnings become apocalyptic: th...

27/05/2026

You may have heard that dear old Tony Blair has written a piece attacking the current government and outlining his solution to the current multiplicity of problems. It makes sad reading. He had it all. Now he is a sort of faded ghost, a King lear like tragic figure...no scratch that. The man should be locked up as a war criminal, and an apologist for genocide.

If you would like a more elegant tear down, but one that is concise and impactful. Try this substack article by Richard Murphy. He sums up the case against TB, and the whole neoliberal project that TB bought into and still seemingly believes in - despite it being the reason we are in the hole we are now in.

TB's answer to the hole is to get a bigger digger, preferably powered by oil and AI. He just cannot fathom (despite being 6 feet down) that the digging is the cause of the problem.

There Is A Real Alternative

26/05/2026

I read an interesting article on Substack by Chevan Nanayakkara, in which he desribes the existing economic and financial structure of the USA as "socialism for the wealthy". Much of his argument applies to the UK too.

He writes:

"An economy that mainly generates wealth through rising asset prices rather than through production cannot deliver shared prosperity, because asset ownership is concentrated by definition. The growth numbers report success while ordinary people experience decline. Democratic legitimacy erodes because the system tells ordinary Americans it is working when their lives are getting harder. That gap between the official picture and the lived experience is the political fuel for everything that has followed: the breakdown of public trust, the rise of authoritarian movements, the appeal of leaders who name the dysfunction even if they have no real plan to fix it. Financialization produced not only the asset-holder class but also the political vulnerability we are now living through."

The question he asks, after explaining how the system works, is how does the system survive when the vast majority are being exploited by it and should reject it?

The answer is that a set of myths have been created whereby a selective filter is applied so that proposals to spend money on improving the life of the majority are always questioned with "where will the money come from?". Whereas the policies that redirect money towards the asset-holdng class are cloaked as driven by natural phenomena, that reward 'enterprise' and create prosperity for all, rather than deliberate choices to favour a select group. "Where will the money come from" is never asked when banks are bailed out because of their own excessive risk taking, or vast sums are pumped in to prop up collapsing asset values. Or tax rules are changed to favour asset holders over workers. Here the action will be described as 'necessary', or efficiency boosting, or re-balancing, or an 'emergency' response to keep the economy working.

On the one hand, we can't afford to pay people properly, or to house them affordably, or to look after them when ill, or to care for them when they can't care for themselves. On the other, policy choices that push up asset values that enrich a small section of society, at the expense of the rest.

We have an open democracy, so in theory a party that addresses this injustice and proposes to reverse the priorisation of the already very wealthy over the rest should arise and garner popular support. Shouldn't it?

Yes. But then the concentrated wealth of the asset rich is focused on preventing that from becoming established and gaining power. Who owns the vast majority of the media? Who owns the social networks? Who manages the terms of the debate, frames what is considered acceptable, constructs and reinforces the myths, and sets up the attacks and smears that discredit any opponents that threaten the status quo? Who are the gatekeepers that decide what stories get prominence? To whom are they beholden and on whom do they depend for their career?

Any challenger has to overcome not only these obstacles, but defend itself against the wider deregulated offshore mobile pool of capital that can very rapidly deploy either to overwhelm or to undermine any initiative at the national level.

Proposing, say, a wealth tax, in this context, is a little like the proverbial boy who tries to plug the leaking d**e with his thumb. The whole structure is flawed and needs to be rebuilt. If not, the inevitable result will be a catstrophic collapse, eventually. In the meantime, increasing political volatility, loss of trust, decline of public services and rising anger.

25/05/2026

Scotland became the first country in the world to pass legislation on Community Wealth Building. The Community Wealth Building (Scotland) Act was given royal assent on 25/3/26 (https://www.legislation.gov.uk/asp/2026/7).

It was reported, but there seems to have been very minimal discussion about it, and seemingly (to my knowledge) nobody has been pressing for a UK wide version of the act.

I found an article about it on the American Democracy Collaborative website written by one of the architects of the Act.*
If you haven't heard of Community Wealth Building it is "an economic development model that transforms local economies based on communities having direct ownership and control of their assets. "

The Act is intended to
"(a)reduce economic and wealth inequality between individuals and communities in and across Scotland, and
(b)support sustainable and inclusive economic growth in line with the United Nations sustainable development goals,
by facilitating and supporting the generation, circulation and retention of wealth in local and regional economies."

It includes the following:
"(a)using public procurement to facilitate or support such generation, circulation and retention,
(b)promoting—
(i)employment opportunity,
(ii)workforce development,
(iii)equality in the workplace,
(c)diversifying ownership of land, energy or other assets by facilitating or supporting community ownership,
(d)bringing vacant and derelict land back into use in a way that provides financial, social or environmental benefit to the community,
(e)encouraging local business start-ups or entrepreneurship,
(f)promoting or supporting the development of—
(i)employee-owned businesses,
(ii)co-operatives, including co-operative financial institutions,
(iii)social enterprises,
(iv)supported businesses, as defined by section 11(3) of the Procurement Reform (Scotland) Act 2014,
(g)promoting access to investment opportunities that provide a benefit to the community and to local businesses,
(h)supporting local climate resilience and mitigation of the effects of climate change,"

The idea is that rather than leaving it to individual local authorities to consider such an approach (a few have already done so - in England, Preston in Lancashire is a well-known example) it is mandated. This should mean the practice scales up and builds momentum.

We can hope that our new West and East Unitary authorites adopt a Community Wealth Building approach as they plan for the transition.

* link: https://www.democracycollaborative.org/blogs/a-world-first-community-wealth-building-legislation-in-Scotland

A Community Wealth Building Bill has been published by the Scottish government, making it the first piece of national CWB legislation anywhere in the world.

19/05/2026

I stumbled across a 'debate' on BBC R4 the other day on this topic - "has Britain become ungovernable?"

The premise was that the turnover in PMs and the obvious political discontent across the country coupled with the stagnation of the economy and the seeming inability of governments to "get things done" had created a situation where nobody could actually make anything happen. We were trapped in a doom spiral.

The BBC then referred to the 1970s as a similar era when it seemed we were falling apart and governments kept changing. Then along came a saviour, a messiah with a handbag. She sorted it all out. So they interviewed 93 year old Michael Heseltine for his views. You'll be amazed to hear that he agreed that what was needed was a new Thatcher - to sort out the mess and make the 'hard choices'.

What were these hard choices?
To de-industrialise and shut down all the 'relic' industries that had once made Britain prosperous - steel, coal, ship building, even what remained of the car industry.
To privatise everything, including the public utilities like energy, water, communications, transport. The fundamental architecture of a developed state. All flogged, at knock down prices - to whoever would pay. Mostly, it turned out, a combination of other countries sovereign wealth funds, overseas pension funds, and all sorts of shadowy private equity, hedge funds and the like. All intent on extracting maximum profit for minimum input.
On top of that, she sold of most of our council housing at cheap rates, and deliberately chose to block any attempt to build more with the money raised.
Finance was deregulated, meaning that the controls that had been in place since 1945, that had allowed national governments to rebuild the country after the war, create the NHS and fund social services and reduce poverty were removed, and rather than wealth being directed to where it could benefit the majority, it was now pumped upwards to a tiny but increasingly rich minority.
Instead of a homogenised pasteurised milk, society began to resemble silver top that had stood out in the sun. All the fat sitting in a glutinous layer on the top, and below more watery until at the bottom was a festering furry mass of mould.
The final act of the saviour was to use all the revenue from the North Sea oil bonanza to drive this restructure and keep the country working as it was sold off, de-skilled and holowed out.
By the time she and her followers had finished, they had created the conditions that have led us to the state we are now in.

So, while a little reflection would tell us that if we have become ungovernable it is in a large part because of what happened from 1979 onwards, which lead to the great financial crisis of 2007/8 and its aftermath of austerity. Exactly how is a revival of this process meant to work - after all, you can't privatise what is already private, or de-industrialise the deindustrial, or sell non-existent council homes, or deregulate the unregulated, can you? And the oil has mostly been extracted, leaving only dregs that we can't or shouldn't use if we want a habitable world.

The BBC has dumbed down so much that its own staff have become fools.

19/05/2026

After all the excitement of the West Surrey unitary elections we were left with a substantial majority for the Lib Dems on the new council.

The Lib Dems won 56 of 90 seats (so 62% of seats) with 36% of the vote. Double the seats that a fair, proportionate system would provide.

The Lib Dems say they are in favour of PR. Is that only at national level, or does it include local government? There is a PR system for local elections in Scotland, so it can be done.

If there existed a PR system across West Surrey, the results would be very different:

WEST SURREY Seats % vote % seats Using PR
Liberal Democrats 56 - 35.68% - 62.2% ----- 32
Conservative ----- 20 - 24.90% - 22.2% ----- 22
Reform UK --------- 9 - 20.62% -10.0% ----- 19
Green Party -------- 0 -- 8.63% -- 0.0% ------ 8
Farnham Residents - 2 -- 1.94% -- 2.2% ------ 2
Labour -------------- 0 -- 3.76% -- 0.0% ------ 3
Others (various) ---- 1 -- 4.31% -- 1.1% ------ 4
TOTAL --------------- 90 ----------------------- 90

Instead of an absolute majority on a minority of the vote, there would be a need to form alliances and govern with some sort of consensus. The progressives would have 43 (from 48% of the vote) , regressives 41 (from 43%), and there would be 6 of varying views (from 6%). While it might make it more complicated, it would be much more reresentative of the vote. Which is what a Democracy should aspire to, shouldn't it?

In most PR systems, there is usually a minimum threshold % of the vote (or number of votes) that a party has to reach before it gets a seat. Its likely that the very localised groups would not achieve this, so most of those 6 seats would probably be distributed to the larger parties.

Of course, if we did have a proportionate system, the vote might be quite different. Presumably a lot of voting was tactical and designed to prevent certain results as much as promote them. So it's likely that the makeup of the council would not be as suggested. Until we try it, we won't really know.

But it could also encourage more people to vote, and incentivise working together for the benefit of the whole population. Which ought to help make our politics more healthy.

27/04/2026

Have you heard of the FSB? Not the successor to the KGB, the Financial Stability Board, set up after the Great Financial Crisis of 2007/8. It is, in its own words "an international body that monitors and makes recommendations about the global financial system."

Interestingly it adds, "The FSB’s decisions are not legally binding on its members."

The members consist of the G20, plus various international bodies such as the World bank, the IMF, OECD, and ECB. The Chair is Andrew Bailey, Governor of the Bank of England (BoE).

The FSB sent a letter to all the finance ministers and central bank governors of the G20 on 13/4/26. The opening lines were:

"The conflict in the Middle East has resulted in a substantial shock to the global economy. It has prompted significant financial market reactions, so far notably in energy prices and government bond yields. To date, the financial system has absorbed this shock"

It went on to talk about the 'vulnerabilities' in global finance:

"stretched asset valuations; the build-up in the non-bank sector of high and increasingly concentrated leverage; and liquidity mismatches, opacity and growing complexity in certain markets, notably private credit". *(see translation below)

"Put simply, there is an increased likelihood that multiple vulnerabilities could crystallise at the same time, thereby amplifying the threat to financial stability and the provision of critical financial services. I call this the risk of a double or triple “whammy”.

The language is jargon ridden and cautious, until that last bit. For the FSB to talk about a risk of a "double or triple whammy" it has to be pretty seriously concerned. If we add to that the recent statement by the Deputy Governor of the BoE, responsible for Financial Stability, Sarah Breeden, we could conclude that behind the scenes they are alarmed.

Breeden said, "There's a lot of risk out there and yet asset prices are at all-time highs. We expect there will be an adjustment at some point."

Translated into normal speak, she is saying that the stock market is not reflecting the risky state of the world economy, particularly in view of the impasse over the Straits of Hormuz, and is likely to fall substantially.

When? Nobody can say. But given how the whole speculative system operates, following Greater Fool Theory, so long as there is a bigger fool out there who will buy the overpriced asset off you, you can keep pushing those prices up. The point comes, though, when you find that you are the Greatest Fool, and then the whole system crashes.

There is another FSB report due, on 'private credit', which is an area that involves what the FSB politely calls, Nonbank Financial Intermediation (NBFI) - also known as shadow banking. NBFI is largely outside regulation. Private credit, wikipedia tells me, is "an aspect of the shadow banking system involving assets defined by non-bank lending where the debt is not issued or traded on the public markets."

That means, by and large, unregulated. So we can await the FSB report on it with anticipation. Whatever they find, since they can only give advice, it will be fascinating to see how governments respond.

______________________________________________________________________
*Translation:
"Stretched asset valuations mean that the value of assets is higher than it should be. The non-bank sector (like insurance companies and pension funds) has a lot of borrowed money, which is getting more and more concentrated in certain companies. This makes the sector more at risk. Liquidity mismatches happen when there's not enough money available when it's needed, and there's not enough transparency about what's happening in certain markets, especially private loans. These markets are getting more complex, which can make it harder to understand what's going on and make good decisions."

26/04/2026

It appears that others have noticed the rise in dodgy claims and bar charts on local election leaflets:

Exclusive: Investigation into campaigning materials for local polls in May challenges tactical voting claims

25/04/2026

In my previous post I wrote about the issues with local politics. Unfortunately, National politics is far more dysfunctional than local.
There is an article in the Grauniad about internal parliamentary Labour party shenanigans around what to do about the unpopularity of our PM and the expected calamitous results in local elections. There are some telling quotes that illustrate the problems with how our political system operates.

“It’s Andy or bust,” one senior centrist MP said. “Nothing else works. Nobody else can win. Anything before he has a path is too soon.”

They are saying here that despite wanting Starmer gone, they need to keep him in post until Andy Burnham, who is not even an MP, can replace him, eventually. Never mind what matters for the country or the people who elected them - it's what matters for the MP's future that really motivates them.

“It has to be Andy – no other potential leader will win an election. But that has created a stasis where no one wants to move.”

Ditto.

“The focus groups I have seen around Andy are like actual gold dust. People say things like ‘he cares about people like us’. Do you know how rare it is to see that about a politician?

A remarkable admission. A politician who is popular because he is seen to care? Like gold dust!

The comment that really plumbed the shallows of thinking in a typical mainstream party politician was this cracker:

“I am not sure the brand damage would be recoverable from by 2028 in many of the places we need to win.”

Brand damage? That's how they think of it. Add to that the comment about how rare it is for people to say "he cares about people like us" and you begin to understand just how damaged our politics is. That is an admission from inside the party that the man who was elected with a landslide only 21 months ago is believed not to care, and moreover, that most politicians are seen as not caring. Why? It's fairly obvious - because if they did care they would surely put the interests of ordinary people first, and act accordingly.

So whose interests are they prioritising? Look around and see who is doing well from our economy and you have your answer. This is not unique to Labour. It is true of the Conservatives too. The two traditional mainstream parties are haemorrhaging support because people can see that whatever they say, their actions tell a clear story about whose interests they prioritise.

Politics is highly volatile at the moment, with at least five parties competing for a share of the votes from 15 - 25%. In Scotland and Wales there are Nationalist parties as well, which are attracting the largest slice of the vote. But Wales and Scotland have a more proportional system, so for their national parliament/assembly the seats gained much more closely reflects the % vote than in England.

The UK parliament, and local government in England, uses the First Past the Post (FPTP) system. This is designed for two party competition, and when we have multi-party support at roughly similar levels, it exacerbates the volatility. It can lead to large majorities for parties that get only around a third of the vote (as happened in 2024). This means that 2/3rds of people voted for other parties, and in a democracy, having the majority ruled by a minority is a recipe for unrest and instability. It also discredits the political system and erodes trust. That is the situation we have in 2026. A growing lack of trust in the system and a collapse of belief in government being able to deliver for the majority.

But, judging from the comments above, the MPs rather than being concerned about this, and intent on repairing their reputations and regaining trust, are focused on what is best for them and their party. I think this can be summed up as "whatever it takes" - not to meet the needs of the population, but to keep themselves in power.