The End of Property Finance as We Know It?

In case you hadn’t noticed, Chancellor Alistair Darling’s giving a bit of a speech this afternoon.

He’ll be laying out the Government’s plans for saving the economy from an even worse recession than it’s already facing.

It’s quite a clever way to sell it. Regardless of how bad things get in the future, you can always say: “Well, it would have been even worse had it not been for the quick-thinking actions of the dynamic Brown Government.” That’ll be the spin anyway.

But can the pre-Budget Report really make much difference to our economic plight? Of course it can. It can make things a lot worse…

This government encourages shopping and discourages working

The main thrust of the pre-Budget Report seems likely to be a 2.5 percentage point cut in VAT, which will fall to 15%. There’s plenty of other stuff being mulled over by the papers, and no doubt a few nasty surprises as well. But we’ll find out what he’s really got in store for us in a few hours, so no point running through all the eventualities here.

Let’s just focus on this VAT cut. I’m not going to complain about tax cuts. Lord knows, we’ve seen too few of them in the past decade. But it’s interesting to have a look at the thought process behind what’s being done here.

VAT is a tax on consumption. As taxes go, it’s not the worst one. It treats everyone equally and fairly - you pay according to the quantity of resources you consume. You could even describe it as a green tax.

Income tax, on the other hand, is a tax on production. The harder you work, the more you earn. The more you earn, the more the state takes out of your pay packet. And oddly enough, this effect is felt most strongly among the least-well off in British society. Because of the way the ridiculous tax credits system works, certain workers face a marginal tax rate of 70% once they earn above a certain amount. In other words, there’s a point at which they only end up getting an extra 30p for every £1-worth of work they do. For an apparently dour Presbyterian, Mr Brown sure doesn’t believe in encouraging the work ethic.

So effectively, the Government heavily favours consumers over producers. And the pre-Budget Report makes this very clear. Because it’s tomorrow’s producers who will pay for today’s consumer boost. According to The Daily Telegraph this morning, Labour plans to introduce a 45% tax rate on those earning above £150,000 after the next election.

Yet Britain’s big problem is that we’ve been doing too much consuming and not enough producing. How does encouraging more consumption, and discouraging production, help us get any further forward? The answer is simple enough. It doesn’t.

A recession is nature’s way of telling you that your economy is heading down the wrong path. A depression is nature’s way of saying the same thing – only a lot louder.

Britain needs a new set of economic props

As a nation, we’ve become too dependent on three things, all of which have been fuelled by the credit bubble. First there’s the financial sector. The finance sector is meant to allocate capital efficiently. It gets money from the people who have it, to the people who need it, with a minimum of fuss. That’s the nature of the value that it adds to the economy. But it’s not performed that role anywhere near as efficiently as we’d like to pretend. Were all those new-build buy-to-let properties an efficient use of capital? No, I don’t think so either.

The financial system’s ability to allocate capital efficiently has been badly undermined by central banks making it much harder to gauge risk clearly – more on that in the future. In any case, the end of the credit bubble also spells the end for the consumption bubble.

People used easy money and grossly inflated house prices to boost their consumption of everything from household furniture to shoes to computer games. That in turn meant more jobs in the services sector. But now that economic prop is being kicked away too.

The third prop has been rampant government spending. Fuelled by cheap borrowing and extremely healthy tax revenues, the government has splashed our money all over the public sector. But it’s not been spent on useful jobs, but on increasing the range of administrative and management roles in health, policing and education.

What will replace finance as our 'specialism'?

What can we do about all this? We need to consider what will replace the financial sector as our ‘specialism’. If we want to maintain a developed world standard of living, we need to contribute something to the global economy that can sustainably generate high-paying jobs. That means we need to have well-educated, skilled employees. But given the Government’s propensity to view any institution that promotes academic excellence with suspicion and hostility, the chances of turning around our education system any time soon is a major challenge.

And right now, this is a debate for another day, argues the “something must be done!” brigade. So will the VAT cut be effective? Well, it’ll make goods in the shops cheaper. But then, so will deflation. Shops are already slashing prices ahead of what they fear will be a miserable Christmas. And consumers are – rightly - already in ‘cut-back’ mode. It’ll take a lot more than a couple of percentage points off prices to make them blow their budgets this year.

So Mr Darling will have to have a lot more in his box of tricks if he wants to make a dent in this recession. We’ll find out soon enough – and give you the reaction on the MoneyWeek website later this afternoon.

Big Thank you to John Stepek

Buyout USA Property for as Low as 5% of Value

There's a new "secret" that a lucky few have already found that's enabling them to literally buy houses that ordinarily sell for around $1 Million or more - but now for just $1,997 or LESS!

There are 3,141 counties in the United States, and each one possesses this exciting new opportunity whereby anyone with as little as $100 to seldom more than $5,000 can buy homes ordinarily valued from $30,000 to in quite a number of cases above $5 million! - and for just 1% to rarely above 5% their selling costs!

And the BEST part about this is that you can be located anywhere and still buy any home you want - even if you're 3,000 miles away or more!

But, you don't have to visit the county you buy the homes in - instead, you can do it all from the comfort and privacy of your home using just your tiny 'ole mouse!

This is what makes this such a wonderful opportunity, in that you can go online to some select websites, then pick and choose the properties you want, and then get them for between 1%-5% at most.

No matter what happens you make money!

You basically buy a homeowner's tax lien certificate because he or she wasn't able to pay their property taxes.

They by law must pay you anywhere from 16% to as much as 50% in interest - and in many cases they must pay you back within as little as 6 months.

But, if they can't pay you back, YOU own their home free and clear (and for what usually amounts to just 1% of the house's actually selling value!)

Now, at this point you can either keep the house for yourself, or you can swiftly turn around and resell it (in any economy, good or bad!) to banks, lenders or individual buyers answering your little classified ad! - and where you make a killing!

The site that has all the facts as to how you can do this from your laptop or PC is here:

http://www.watersons-mg.com/real-estate-bargains

But I wish to strongly encourage you to take action and go there as it's rumored that they are going to withdraw this exciting opportunity as soon as they reach the maximum number of "members" they can handle.

Lower Interest Rates to Come?

In its quarterly Inflation Report, the Bank of England forecast that national income could shrink by one to two percentage points over the next few quarters and growth would probably be flat by the end of next year. Consumer price inflation, which at its last reading registered an annualised rate of 5.2 per cent, will fall to its target rate of 2 per cent by the middle of 2009.

In remarks at a press briefing Mervyn King, Bank of England governor, said interest rates could fall much lower than their current 3 per cent and declined to rule out cutting rates to zero.

“We are certainly prepared to cut Bank rates again if that proves necessary,” Mr King said.

Asset Value Falls bring Down Investor Sentiment

Great Article from Money Week showing how falling asset values are affecting sentiment in not just the property markets


Governments love capitalism. As long as asset prices are rising, that is.

When prices are rising, governments will do anything to keep them up there. You want free money? We’ll keep interest rates low. You want light-touch regulation? We’ll give you off-balance sheet finance.

The deal between banks and governments in the past decade or so has been simple. “You lot keep the voters happy and feeling rich,” says the government. “And we’ll give you a nice cosy, risk-free world to play in.” Of course, capitalism without risk, is not capitalism at all. What we’ve had is sugar-daddy socialism, with the financial industry frolicking freely, safe in the knowledge that there’s always a bail-out around the corner.

But you can’t buck the market forever. And even though there have been plenty of bail-outs, prices just keep on falling. Yet governments don’t seem to learn…



Chaos in emerging markets

Yesterday I pointed out how Hank Paulson’s U-turn on the Tarp highlighted the dangers of government interference in the markets (to read about this click here: The pound has nowhere to go but down) . But you can get a much clearer idea of how the state can make a bad situation worse by looking at the havoc in emerging markets.

Like Western investors, investors in emerging markets came to believe that asset prices could only ever go up. And so when they fall, they start looking around for someone to blame.

That’s why Kuwait’s stock market (which has fallen by more than 40% since late June) was shut down yesterday. According to The Telegraph, an investor had filed a claim “over the heavy losses he had suffered on the exchange.” So the court stopped it from trading until Monday, finding that “the bourse management failed to take any measures to boost a flagging market.”

I imagine that the management didn’t realise that this was part of their remit, any more than the owner of a fruit and veg stall’s pitch would expect to have to keep the price of apples high.

The dangers of too much government intervention

But the plight of Russia probably demonstrates best the dangers of too much government intervention. The Russian Micex market has been the worst performing in the second half of this year so far, reports The Telegraph. Stocks have fallen by 75% since May.

A key problem for Russia is that it is massively dependent on oil. Its 2009 budget only balances if oil is trading at an average $95 a barrel. I can’t see that happening. So its markets, and the rouble, have come under pressure with falling oil prices. And of course, as an emerging market, it has taken a hit as investors pull their money out and repatriate it to the “safe haven” of the US.

But the state’s attempts to prevent the crisis with brute force, have only made things worse. The central bank has already had to spend $120bn of its reserves on defending the rouble, which analysts reckon is now 30% over-valued. This is just a waste of money. When a country, particularly a politically risky country like Russia, starts defending its currency, it’s a sure sign to the market that said currency is over-valued. No central bank in the world has enough reserves to defend against a forex market set on helping a currency to find its “real” worth.

Let's hope our governments learn to accept falling prices

The state is also making the stock market plunge worse than it has to be. They keep shutting the market because it keeps falling so hard. But a big part of the reason that it keeps falling so hard is because every time they open it, investors think “Quick! Let’s sell before they shut it again!”

If you limit the trading that can be done, you increase the liquidity risk. Anyone who is scared they might need cash at short notice, isn’t going to be happy to hold stocks that can only be easily traded as and when the government says it’s OK to do so.

All these measures rattle investor confidence further, and make it even harder to price genuine risk. At some point, most assets of any real value at all will reach a price at which fundamentals suggest they are worth buying. But if you have to worry about the government’s random reactions to such falls as well, it becomes impossible to make any kind of judgement based on these fundamentals.

So we’d better get used to falling prices – and let’s hope our governments learn to accept them as well.

Can We Afford to Re-finance Banks or Have a Recession?

As the Banks sit there wringing their hands in anguish at the problems they are in, let's step back to see what they are actually causing in the rest of the economy.

First we have to understand about the "paradox of thrift", the concept introduced by that great British economist John Maynard Keynes, who has been very much misrepresented over the years. This concept states that if we all start saving too much, then we are not spending. This will then causes a slow down in the economy as goods and services are not being purchased in the same volumes.

Now lets consider what the banks are doing right now in their misguided attempts to correct the real problems that they have caused and with their desperate need for refinancing from Governments and Sovereign Wealth Funds. Yes, they are taking money out of the production cycle for debt re-financing. And as they are reducing the amount of lending, they are deflating global economies.

Are they mad? They are only concerned with their own survival, but it seems at the expense of the rest of the economy. Because they have got everybody's bank accounts online they are now indispensable/compulsory [just try to do without one, your tax office will go ape]. Worst luck. We need an alternative to bank accounts. An alternative that will not try and gear up your money to fund their profits and then pocket your cash when they screw up. How else can we interpret their actions.

At best a bank is only a marginal business. How can it possibly make money from holding our money? They do it by using our money for their own gain. But when their assumptions and their miscalculations mean that they have lost our money, its only natural that we the customers are going to feel a bit angry. No wonder there are "runs on the bank". No bank can survive a loss of confidence in the system. That's why we have problems now - we have lost confidence in "the system".

The only solution is to re-build that confidence, hence massive inter-governmental support, or to come up with alternatives. Well Governments are doing their bit but....

So lets as responsible business folk with creative minds come up with some alternatives to the traditional banks.

First is the internet concept of ZORPA

Next is anybody's best guess. Please lets come up with some solutions.

Over to you.


John Burke, Ecadamist, and International Worrier!

BOE Cuts Rates by 1.50%

After one of the most hotly debated rate decisions in recent times, the Bank of England delivered its largest interest rate cut in 15 years today, slashing the UK base rate by a full 1.50% to 3.00%, in an effort to shield the ailing British economy from the fallout of the global credit crisis. The move follows on from last month’s coordinated 0.50% cut with other major Central Banks, as the credit crisis increased its stranglehold on the global economy.

Faced with mounting evidence that the UK economy is headed for recession, the Monetary Policy Committee has come under increased pressure to take more decisive action. Earlier this week Britain’s service sector, the backbone of the UK economy, was seen contracting at its sharpest rate on record while factory output posted its longest decline since the 1980’s recession, heralding further job losses. However, the most influential of recent developments was the sharp contraction in third quarter GDP, confirming the UK economy is on the brink of a recession, sharply reducing consumer and business confidence for the coming year.

Recent comments by Governor Mervyn King stating that “it now seems likely that the UK economy is entering a recession” signals further monetary easing is in the pipeline.

Major Interest Rates


Major Interest Rates
US Fed Fund Rate 1.00% 29th Oct 2008
EU Min. Bid Rate 3.75% 8th Oct 2008
UK Base Rate 3.00% 6th Nov 2008

Source: HIFX Financial Services Ltd

Empty Property Tax is Hurting - No Suprises there!

Call to end tax on vacant properties

A group of the largest property owning companies have called on the government to scrap or amend legislation covering business rates on empty properties in the pre-Budget report.

Companies began paying full rates on vacant properties for the first time this year, following an initial grace period. It has been criticised as an extra financial burden on an already struggling property sector.

Many companies and organisations outside the sector also own real estate, including pension funds. Local councils have suffered as they also pay tax on empty properties. Campaigners say the tax is stifling regeneration.

The letter to Gordon Brown has been signed by companies with a combined market capitalisation of £370bn.

These include companies from AstraZeneca and McDonald’s to Next, Tesco and Nokia, as well as Land Securities, British Land and Canary Wharf.

Segro and Brixton, among the other supporters of the letter, which was collated by the British Property Federation with Property Week magazine, estimate that the tax will cost them £8m and £5m this year respectively.

The letter asks for a 50 per cent relief on the tax for shops and offices for two years, and an indefinite stay on industrial buildings.

The government scrapped a former relief for empty properties in April. It estimates the move could generate up to £1bn in extra revenue.

The Communities and Local Government Department said: “There are no plans to reverse the changes to empty property rate relief introduced on April 1. However, as with all taxes the position is kept under review and the government has engaged with industry and local authorities to understand how the reforms are working overall.”

Ian Coull, chief executive of Segro, said: “This outrageous piece of taxation is hitting the whole of the British economy at a time of severe downturn.”

Source: FT; By Daniel Thomas
Published: October 23 2008 22:47 | Last updated: October 23 2008 22:47

Whatever Happended to the Property Boom?

Property group turns to Dylan for inspiration!!

By Daniel Thomas, Property Correspondent

Published: August 19 2008 08:25 | Last updated: August 19 2008 22:08

The four horsemen of the apocalypse made an appearance in the property industry on Tuesday as UK developer Brixton warned that worse was to come for the struggling sector.

The company’s weak first-half results were fronted by a picture of the horsemen, although the suggestion seemed to be that they were coming for the industry rather than for Brixton.

Tim Wheeler, head of Brixton – described with only a modicum of irony by a real estate analyst on Tuesday as “everyone’s favourite” chief executive – quoted from Bob Dylan’s All Along the Watchtower in the company’s results: “None of them along the line know what any of it is worth.”

He said the song captured the beleaguered mindset of the commercial property industry.

Mr Wheeler, a veteran of the property industry and known for his opinionated comments, warned that there would be further falls in prices as valuers struggled to catch up with the real level being set by the few transactions carried out in the market.

The value of Brixton’s own portfolio lost 10 per cent in the first half, or around £245.3m ($458m), underperforming the benchmark IPD industrial index.

Brixton focuses on what is seen as the less salubrious part of the property market: developing warehouses, industrial buildings and business parks, mainly around London’s M25 motorway and the south-east gateway airports.

The group’s name – like that of rival Segro, the developer formerly known as Slough Estates – derives from the London district in which it started.

Mr Wheeler has been one of the most bearish chief executives in the market, accurately pinpointing the top of the market in 2006 with a large sell-off of Brixton’s properties.

In the event, with hopes of a short, sharp downturn dashed, his once unfavoured predictions of a drawn-out and damaging property slump appear to be on the mark.

Mr Wheeler gave a confident report of the company’s prospects, saying that its £2.2bn of good-quality properties let to a diversified tenant base meant it was well placed to weather the storm and declaring a 2.1 per cent increase in the interim dividend.

However, he warned of the deterioration in the wider market.

The company said that net asset value per share fell 17.8 per cent to £4.48 in the six months to the end of June.

The company revealed a loss before tax of £236.7m, from £192.3m in June last year, and a loss per share of 86.8p, from earnings per share of 70.9p.

There was more positive news on rental income, with rental growth of almost 4 per cent and net rental income up 13.5 per cent to £39.4m.

But there were warnings about the future.

Mr Wheeler said that its properties would not be immune to the economic slowdown, and voids – the empty space in its buildings – had risen to 18.7 per cent, in line with company forecasts.

Tenant defaults were rising, but still modestly, as were bad debt provisions.

The group has frozen new development and acquisitions.

The company has been affected by the rates that owners of unoccupied property are having to pay, which have cost the group £1.6m since their introduction in April.

Copyright The Financial Times Limited 2008

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Worrying Trend to Hit Banks?

Barclays dismisses San Marino lawsuit

Barclays Capital will fight vigorously a lawsuit filed against it in London’s High Court by a banking client Cassa di Risparmio di San Marino, which alleges misrepresentation by the UK investment bank in the sale of complex debt products.

The San Marino-based bank is seeking damages of at least €170m (£134m) in losses and lost income related to five complex credit-linked notes bought by CRSM for €450m in 2004 and 2005.

It is also seeking unspecified damages related to the restructuring of three other complex notes in June 2005.

“The legal action has no merit and we will contest it vigorously,” Barclays said on Tuesday.

The suit is part of an increasing number of actions faced by banks over their complex credit products since the market turmoil that began last year led to widespread losses in the financial industry.

Lawyers said that many disgruntled clients are pursuing the banks that had arranged complex debt products, but that claims are mostly settled well before they near a court filing, which is seen very much as a last resort, particularly in Europe.

Barclays has faced a number of similar lawsuits over collateralised debt obligations it has structured and sold.

In 2005 it settled a $151m claim brought by HSH Nordbank of Germany.

HSH is also currently suing UBS, the Swiss bank, over alleged mismanagement of a $500m portfolio of collateralised debt obligations to London. The case, which is set to be heard in New York, was among the first to be filed over subprime mortgage losses in the wake of the credit crunch.

Barclays, meanwhile, is also named in a lawsuit filed this month by Oddo Asset Management of France in New York, which relates to two investment funds known as “SIV-lites”.

That suit also seeks damages from Solent, a London-based hedge fund that managed one of the investment funds, and from McGraw-Hill, the owner of Standard & Poor’s, the rating agency.

Bankers said Italy was beginning to discover the depths of its problems with structured products. Marco Elser, senior manager in Rome at Advicorp, an independent investment banking group, said: “Half of Italian banks don’t know what they have in their accounts, because the derivatives around which the structured products were sold are so complex that it would take an Einstein to figure it out.”

Additional reporting by Guy Dinmore in Rome
By Paul J Davies

Published: July 29 2008 19:05 | Last updated: July 29 2008 19:06
Copyright The Financial Times Limited 2008

The action above could be the first in an avalanche of law suits filed by investors who could feel a little hoodwinked by the avaricious banks and their rush to sell "products" to their clients in the headlong desire to make ever increasing profits from a "business" that should only be marginal at best.

When you run a business that has its hands in your pockets, the tendency is for it to help itself.

John Burke

Recession Problems

Economic View: Our best chance of staying out of recession may be to back the Treasury against the Bank

By Sean O'Grady
Sunday, 27 July 2008

Housing crashes are always worse than expected. A mood in which people believe that property prices only ever go up is usually a reliable leading indicator of a crash. The psychological factor in housing booms (and busts) is too little noticed, presumably because it is difficult to pin any kind of numbers on a zeitgeist. Still, it matters greatly.

An only mildly muted state of irrational exuberance was, roughly, where we stood at the start of this year. The consensus among observers – City economists, the CBI, the mortgage banks and the academics – was that property prices over the next 12 months would be "broadly flat".

The team at the Halifax, for example, put out a press release in the following confident terms: "The UK economy is in sound shape. Strong market fundamentals, a structural housing supply shortage and pent-up demand from a large number of potential first-time buyers will support house prices, preventing a sustained and significant fall." Even allowing for a vested interest, that was a truly brave face.

Well, as we journalists sometimes say of the stories that somehow don't quite come true, the Halifax may have been "right at the time". However, a few short months on, those "fundamentals" do not seem half as sound. The economy grew by a rather sluggish 0.2 per cent in the last quarter, after a similarly lacklustre 0.3 per cent in the first three months of 2008. A recession next year is perfectly feasible.

The biggest single contributor to the slowdown is the collapse in the construction industry, and in particular in private housing starts. Perversely, that may mean a bounce in prices a few years out, when we would have the odd confluence of an end to the credit crunch (one hopes) plus a drying-up in the supply of new homes, since Barratt, Persimmon and the others have almost frozen their building projects. But for now, the overhang of unsold properties and a glut of inner-city regeneration flats are going to stymie things. Values are falling catastrophically in some parts of the country. Add in the effects of consumers being able to borrow less on the shrinking equity in their homes, the "feel-poor" factor that will depress their spending further and the decline in demand for furniture, new carpets and household appliances, and you can easily see the property slump knocking 1 to 3 per cent off economic growth.

And we all know what is holding the real estate market back: the "pent-up demand" among first-time buyers that the Halifax identified at the beginning of the year is staying pent-up, thanks to the refusal of the Halifax, among others, to lend them any money. The credit crunch has ensured the disappearance of the 100 per cent mortgage. Buyers aren't even looking around, or bothering to try to take out a loan. They may well have judged, rightly, that the next move in house prices will be down, and decided they can afford to wait. (Here is that psychological effect in reverse – "house prices will never rise".)

The Royal Institution of Chartered Surveyors confirms this. New buyer enquiries – people popping into the estate agents to check out the scene – have collapsed. Transactions are down by a half, driven by the absence of those first-time buyers. The scale of the collapse in new mortgage approvals for house purchases is astonishing.

Economists are wary of extrapolating short-term trends, so we shouldn't get too hysterical. But after a two-thirds drop in a year in bank lending on prop- erty, as reported by the British Bankers' Association, it would not take long for new mortgage lending by the banks actually to cease, killed by a combination of low supply of funds and low demand from pessimistic buyers. Cash buyers, a few lucky souls, will be in an extraordinarily advantageous position when the market hits rock bottom.

What will rock bottom be? Anyone's guess. House prices have fallen about 8 per cent since their peak last year. Just as some of the earlier estimates were wildly optimistic, perhaps we should be careful about some of the more bearish forecasts now. Adding a little inflation on to nominal falls of 30 to 40 per cent leaves house prices in real terms perhaps 50 per cent off their 2007 peak, resulting in millions of households in significant negative equity – that's on the gloomiest outlook. Unlikely, but possible – and worrying.

Which is where Sir James Crosby comes in. Soon this former chief executive of HBOS will hand in his report to the Chancellor on strategies to revive the market for mortgage-backed securities, and, thus, help the banks raise the money to lend to homebuyers (at its peak, about 30 or 40 per cent of our new mortgages were funded in this way). By far the easiest way of doing this would be to extend the Bank of England's Special Liquidity Scheme.

So far, the Bank has swapped £50bn of older mortgage-backed securities, which no one else wants, for gilts, albeit at a penal rate of interest. New mortgages are not eligible. It has helped. Now, if the Bank were to offer a similar facility for new, high-quality mortgages, that might have a similarly beneficial effect. Then the mortgage market could return to normal, house prices stabilise and the economy escape recession. Ministers would be pleased, not least for the political dividend. The snag? The Governor, Mervyn King, doesn't seem keen on the notion. Stand by for another scrap between the Treasury and the Bank. The stakes couldn't be higher.

Technorati Link

Technorati Profile

Its all about cross networking and interconnections!

Or is it just to get Technorati up the google rankings by inward links? So to balance things here are a list of my blog and web interests with lots of great partners and projects: No particular order.

G8way
Jamie Lawrence Football Academy
JLFA Blog
Refill Food
Cherrie Box Media
Emerging Markets Investor Services Ltd
Watersons Marketing Group
Inspirational Seminars Ltd
Inspirational Seminars Blog
Sylvia Modu
Faye Klein Lingerie
DMR Ltd
Bevin Fagan (who sadly died in April 2008)
Gold Investments
Property Investment and Credit Crunch
Business Start Ups
Yorkshire Network
Gold Bullion Trading
Click4Marketing
Affordable Seminars
Barbur Realty
Canal Craft
Management Resource
Unique Sounds

Plus a whole load of ongoing projects in Africa to build Solar Tower Power Stations, renewable energy systems and exploding the myth of global warming and the great carbon tax con.

I am also very keen on lean government along the lines that Hong Kong adopted and not the over-bloated British Model!