Philip Ozouf

[boatyboy]

Headline In the JEP.

ISLANDERS hoping to get on the housing ladder with 100 per cent mortgages could soon be permanently disappointed.Island mortgage lenders may become more tightly regulated, with 100 and 110 per cent mortgages outlawed.
Economic Development Minister Philip Ozouf said that he favoured introducing new regulations in the wake of the credit crunch.

Current global economic problems, he said, had been sparked, at least in part, by banks lending too much cash to homebuyers who did not have the means to repay it. At present, mortgage lenders in Jersey are unregulated.
Any new regulations would bring the Island into line with the UK, where lenders are subject to tighter controls.

Senator Ozouf told the States this week that, for example, lenders could be required to advertise interest rates in a more uniform and clear way. And the rules governing the selling of endowment mortgages could be tightened

You have to hand it to Philip, he loves his marketing. If Mike Vibert, is correct the PR surrounding the school visit by himself and Senator Ozouf was nothing at all to with him. Who else had an interest in self promotion. 

Tonights front page story, is spinning faster than a drunk ballerina. It seems every other day, Senator Ozouf is either going to do something to make quality of life better on  Jersey, if its not the price of beer its morgages. Of course it’s the silly voting season, and Philip has decided to stand again, so self promotion is the game, and there are some new faces appearing and if not snapping at his heels, (at the moment) are certainly up for a fight.

What is worrying is that Senator Ozouf, as one of our brighter and more articulate movers and shakers, just cannot stop spending the taxpayers money to excess. along with his buddies around the Ministerial table. Now he wants to get involved with organising bank lending on Morgages.

Back to the article.

Goodness me, Senator Ozouf ...............read page three (carried over from the front page) stuck down in the bottom left hand corner. The little carried over item that looks lost.

Part of the paragraph, simply reads,

There have, however, been repercussions in the island. For example, Jersey home loans withdrew a number of products, and buyers are now required to have a much larger deposit to reduce the risk to lenders.

So in Jersey you need a hefty deposit ( as confirmed in the article) my understanding is around 25%. So this is all basically hot air, simply because, retail 100% morgages went south weeks, if not months ago. Philips chest thumping at least gets him on the front page ? Marketing great, content abysmal.           
http://www.thisisjersey.com/2008/09/10/an-end-to-100-mortgages/

[danrok]

This is very much a case of shutting the stable door after the horse has already bolted.

Shame that 100% (or more) mortgages weren't banned here, and everywhere years ago, before the start of the credit crunch.  It was always plainly obvious that this type of lending was going to cause serious problems.

And, it's not just the amounts being lent which are the problem, but the means testing (or lack of) carried out by the lenders.

Then there's credit cards, and other easy to come by expensive loans. These things need to be tightened up, with some for of restrictions to prevent people from borrowing money they may struggle to pay back.

[Fritz]

The trouble with the ",lack of means testing", is the fact that lenders commision is based on how much they lend, not on the ability of the borrower to repay.

[Nick Palmer]

Headline In the JEP.

Island mortgage lenders may become more tightly regulated, with 100 and 110 per cent mortgages outlawed.
Economic Development Minister Philip Ozouf said that he favoured introducing new regulations in the wake of the credit crunch...

Current global economic problems, he said, had been sparked, at least in part, by banks lending too much cash to homebuyers who did not have the means to repay it. At present, mortgage lenders in Jersey are unregulated...

What is worrying is that Senator Ozouf, as one of our brighter and more articulate mover and shakers, just cannot stop spending the taxpayers money to excess. along with his buddies around the Ministerial table. Now he wants to get involved with organising bank lending on Morgages...

Anyone else think it's a bit ironic that Senator Ozouf, that great fundamentalist champion of the free market and uber competition, looks as if he will revert to State interventionist control because the economy worldwide is faltering and may spiral out of control thus showing up, in sharp relief, the flaws at the very roots of his basic economic beliefs?

[danrok]

The trouble with the ",lack of means testing", is the fact that lenders commision is based on how much they lend, not on the ability of the borrower to repay.

Exactly, the money lending business is driven by one thing - greed.

This is why lenders and property developers like to throw in extras such as a new car when someone purchases a home, in preference to lowering the asking price.  They want to keep the total value of the mortgage as high as possible, using whatever means they can.

So, it would make sense if the gov. was to prevent these incentives, to ensure that the mortgage is paying for nothing more than the property.

[Jason the Maverick]

I don't really understand why the mortgage issue is coming under his wing.  His department deals with so many economic issues now it makes me wonder how they cope anyway.

Nick, can you expand on your last post???

[Eastern correspondent]

Apologies if this comes up twice but I think I deleted my earlier post.so here goes!

PO is a menace and I agree with the earlier blogger who stated that he just cant stop spending our money.

This week he announces that if we are unable to lure another ferry company to trade out of Jersey then he will have to 'consult' re Condors pricing srategy.

He is already in talks with the new owners, will they appreciate government intervention in their business strategy? More bureaucracy ( wish there was a spell check on this site!) more public service employees.

Did we elect him to run a ferry service or to set policy.

This man is consultation mad, do the CoM take heed of consultation papers?.....

Not in my opinion......a prime example .........The Fiscal Strategy Report - the ink is hardly dry and advice is being ignored -

eg Volte Force on GST.

eg The Clothier Report ( pre Ozouf, I acknowledge) but did our politicians       heed it's advice to not cherry pick.......no!


Eleven states members attended the presentation of the Fiscal Policy Report, two ministers included in that figure and one did not remain for the entire presentation................. our money well spent...........no!


The 'consultation' threatened in tonights JEP re 100% mortgage strategy  is ridicuous and a complete waste of our money.................... does the tail to wag the dog!

Finance houses  will  have already  tightened up procedures, tightened up their loan to value strategy. Mortgage lenders will not be actively encouraging new lenders onto their books because of liquidity issues ......they will be reactive and not proactive..............their strategy will be set centrally and not locally - the finance houses will already be looking at other areas to generate income...

Mr Ozouf get real!

[Jason the Maverick]

He only joined us yesterday so he has something to look forward to!

He's pretty tough though when it comes to answering critics.

Like I said before though, my opinion is that Economic Development has the responsibility of far too much at the moment.

[boatyboy]

I don't really understand why the mortgage issue is coming under his wing.  His department deals with so many economic issues now it makes me wonder how they cope anyway.

Nick, can you expand on your last post???

Sorry JTM the morgage issue is not coming under his wing. If you re-read what you have written, its called marketing yourself, with a........... no basis story as printed by the JEP.  Actually His department do not cope because many (not all) of them really don't care. When your not accountable to a boss that is not accountable, who gives a dam. As long as you turn up looking ok. If I am wrong, why have there have been so many, lets just be nice, and call them mistakes with tax payers money.

[Nick Palmer]

I don't really understand why the mortgage issue is coming under his wing.  His department deals with so many economic issues now it makes me wonder how they cope anyway.

Nick, can you expand on your last post???

Not sure what you want. Guessing, I'll say this now. Remember the LTCM hedge fund catastrophe in the 90's?
http://en.wikipedia.org/wiki/Long-Term_Capital_Management

This was a hedge fund that used complex mathematical principles, based upon the Black-Scholes equations http://en.wikipedia.org/wiki/Black-Scholes (no, I don't understand them either!) which were supposed to eliminate investment risk. They work very well for a while but unfortunately they do not model reality well enough and nasty old reality tested the equations and found the model wanting. LTCM got stung for such a vast amount of money that the Federal Reserve had to bail them out because if they had gone down it would have shaken, certainly the US economy, but probably the world's as well. An analogy for what happened is the old story that a scientist once boasted that he could predict the result of any horse race using his super clever equations. The only problem was that all the horses had to be spherical and moving in a vacuum.

The "quants" (quantitative financial analysts) behind the LTCM crash are the same sort of people who are behind the current credit crunch which is threatening world financial security - they didn't learn before... they don't seem to be learning now.

Even more complicated mathematical equations are currently behind this credit crunch which is far, far bigger and more dangerous than the LTCM debacle ever was. It has been said that hardly anyone understands the maths behind "collateralised debt obligations" (CDOs) and other such complex financial instruments so it is far from clear how dangerous the current instability in world finance could become. A very important principle that needs understanding by finance types is that even their super clever analysts are treating reality as if they have modelled it perfectly and that they are in total control. They even have the nerve to call themselves "Masters of the Universe" http://www.timesonline.co.uk/tol/comment/columnists/camilla_cavendish/article2351118.ece - all their horses are spherical and moving in a vacuum and their systems are unravelling as we speak. The rest of us will carry the can.

Getting back to Senator Ozouf, he believes so strongly in free markets and competition that he thinks, and is on record as saying, that the more competition the better. Similarly for "growth". His fundamentalist view is not backed up by reality, yet he is the effective brains steering Jersey's economy to maintain exponential growth too. As he does not appear to realise that exponential growth of a linear economy is not possible in a finite world - ye canna change the laws of physics, Phil! - his vision of Jersey's future is doomed to fall apart because his horses are spherical and moving in a vacuum! Trouble is, he and his ilk are carrying the rest of us along with him.

[soon]

he does not appear to realise that exponential growth of a linear economy is not possible in a finite world - ye canna change the laws of physics

These incorrect mathematical analogies confuse the true green message which I see as "We've only got one world, so don't trash it."

Steady inflation grows money exponentially. When money was based on precious metals one of your ancestors could have been lamenting that we were going to run out of money. However we didn't - amongst other things paper money arrived, and then digitised money.

Growing economies don't have to trash the world. For example is the computer games industry doing this? Nor does economic growth have to be linear. Consider information technology - from monks painfully copying ancient texts to the internet?

And as for the laws of physics, our knowledge of them may well change. If infinite cheap fusion energy flows from the ongoing particle smashing studies, the short-sightedness of your gloomy mathematical predictions will be exposed.

The trouble with liberal economic policies seemingly slavishly followed by PO is that they are making the poor poorer, and this is now spreading to the middle classes. We need a new "ism" to follow.

[plus_ca_change]

These incorrect mathematical analogies confuse the true green message

I am not sure it is an incorrect analogy.  If you take money as the unit of measure of an economy, rather than thinking money is the economy itself.  Its rather like saying that simply adding a few centimeters to your meter rule every year doesn't mean house is getting bigger.  You dont have more living space, just more units of measurement.

Other than that you are quite correct we only have one planet, and the resources have to do not just for us and all the other working parts of the ecosystem, but for all our descendants as well.  Sustainability is a big challenge. There are no more carpets under which to sweep the ugly parts of our life styles anymore

[Eastern correspondent]

Re his penchant for CONSULTATION I forgot in my earlier blog his ridiculous consultation on a third supermarket...............................so in the space of ten days.....................

Consultation re a Third Supermarket
Consultation re Condor
Consultation re Mortgage Strategy

The cynic in me is wondering if this man is trying to justify his staff, have they got nothing better to do with their time?

What exactly does his department do?

What is their budget?

How many people works within it?

Can I as a tax payer have a breakdown of how he spends our money?

How much has he spent of or money on consultations?

What perentage of that budget is spent on wining and dining these so called experts?



And when will the penny drop......................RESNON VERBA is what the people want.................ACTION NOT WORDS.

Of course we need another supermarket, yes we want
affordable mortgages, yes we want to be able to play the National Lottery, yes we want free (!)  nursey education - no we don't want to take revenue from China and India.........................ahhh

[Nick Palmer]

These incorrect mathematical analogies confuse the true green message which I see as "We've only got one world, so don't trash it."

No argument with the "true green message" but if you're talking to governments and economists they don't see this. Linear economics refers to extracting materials and energy, converting them into goods and services and dumping the waste produced in the process and the goods when they have been used - also any pollution caused along the way is dissipated into the environment. Sustainable or ecological or circular economics feeds the "waste" materials back to the start to get approaching indefinitely continued use out of the same raw material, thus reducing extraction of virgin materials.

Growing economies don't have to trash the world. For example is the computer games industry doing this? Nor does economic growth have to be linear. Consider information technology - from monks painfully copying ancient texts to the internet?

You are confusing growth with development. Growth inevitably trashes the world as the "growth" refers to an unending increase in raw materials and energy being used. Conventional economics assumes that there can be growth without limit. On a finite planet this is not possible
This is the famous growth is good statement from the 1950's when the situation we find ourselves in now began to be engineered.

"Early in the age of affluence that began after World War II, retailing analyst Victor Lebow declared: "Our enormously productive economy... demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction, our ego satisfaction, in consumption...We need things consumed, burned up, worn out, replaced, and discarded at an ever increasing rate."

And as for the laws of physics, our knowledge of them may well change. If infinite cheap fusion energy flows from the ongoing particle smashing studies, the short-sightedness of your gloomy mathematical predictions will be exposed.

"IF" is a very big word. Because you cannot guarantee that this will occur, you should not rely upon it. IF we had a cheap way to get into space, we could mine the asteroids. But we don't

[Eastern correspondent]

Following on from my earlier blogs on Mr Ozouf and his penchant for consultation, I noted in last nights JEP ( so it must be true!) the following headline
             Finance Looks At The Wider Picture
A new advisiory committe has been set up to put together a plan of action for Jersey's Finance Industry, the comittee will be building on the conclusions of a comprehensive report by The London Business School commissioned by ...............yes you guessed ......Phillip Ozouf ...........and it only cost us 100k.

The article by Christine Hebert quotes the  Chief Exec of  Jersey Finance Limited  Geoff Cook
...........'unless action was taken the report would be left on the shelf'

The conclusions of the report suggested that Jersey as a financial centre had a number of advantages but it needed to increase marketing activity and speed up the time it took to bring new products to the market, practicioners from Jersey were seen as lacking expertise in international markets compared to Singapore and other juridstictions...............but don't fear fellow bloggers because Phillip Ozouf gave A FURTHER 500k of our money to Jersey Finance to increase their marketng activity..........

I would liketo see the brief given to LBS from Mr Ozouf and also know what sample was used to produce this report, the conclusions as reported merely reinforce government policy for growth, growth, growth..............do they seriously think that Jersey Finance can compete with the economies of the emerging markets in the far east.................it's like pouring money down the drain...............when will this government learn to budget and prioritise..........Nero and Rome is springing to mind!

There is a pertinent response to Mr Ozoufs 100% Mortgage nonsense from Peter Seymour in todays JEP, supporting my earlier comment on this blog............ No x from me for Phillip Ozouf just a plea to xit!