Tag: Bank of England
Carney in the Cameron Corner?
The (hired by Chancellor Gideon) totally impartial Governor Mark Carney of the oh-so independent Bank of England said today that if the United Kingdom left the Bruderschaft of the oh-so economically-stable #EU, the risk of leaving “could possibly include a technical recession”……….which by implication suggests that if we stay firmly wedged in Bundeskanzlerin Merkel’s ample #EU cleavage, the risk of recession will be gone! Good news !!
David Cameron then said the warning amounted to “a very clear message” of the dangers of Brexit.
Some have declared that the Governor was spouting unwarranted and unmitigated bollocks with several calling for him to be sacked.
In reply, the Governor’s spokesperson said the Bank had “a duty to make its judgments known.”
As the Bank of England has been so incisive and accurate in all of its previous economic judgments and predictions – the 2008 economic collapse, the subsequent recession and the collapse of RBS, to name but a few – I cannot think of any reason why we should not take Governor Carney’s latest prophecy (it’s NOT a prediction!) VERY seriously. 🙂
Camron and Karney the Head Banker – A Fable
(A government FAILS to persuade bankers to lend to the common people.)
The Gates to Economic Recovery and New Prosperity were being guarded by the Bankers.
A tired and bedraggled band of travellers stood before them. They were led by Camron, the legendary economic illusionist and Prime Minister of the Ukshire.
The Chancellor Gideon, the Cabinet and other Uks were busying themselves with trying to appear invisible – an ancient trick modeled after the mythical Bank Elders.
Camron raised his pink chin so as to appear less terrified than he really was. He tried one of his famed rictus-like smiles. “Please let us in! We have cleared The Mess!” .
After he had spoken, he looked round to his band of followers for their approval – for that was their job. They made the customary grunting and “Hear! hear! The Mess! The Mess!” noises of approval.
The Bankers were confused and even a little frightened but nevertheless, were obliged to follow their elders’ orders.
“You have to pay to come in,” oozed the Banker as he counted heads and flicked at his abacus. His fingers were a blur as he remembered: “…then there’s the insurance…..and other charges”. The abacus was smoking.
“But we have already collected and given you all the gold that we could find. And you did promise than when our coffers were empty, we could come in. It is getting so cold out here. We are tired and hungry and we can see that behind the gates there is sunshine and the New Prosperity. If you will not let us in, would you please lend us a little of our own gold back, so that we can eat . Many are dying – even the hard-working people”
” That is not our problem. WE hear that there are Food Banks for the poor! You enjoyed the Old Prosperity when we gave you more than we had and now, we have no more to lend. Anyway, you look as if you would not be able to repay it.”
” But who are all those smiling happy people who I can see through the gates?”
” They are the Bankers. It is the time of the Feast of Bonus and they are celebrating and making merry. Are you a Banker?”
” No I am not but there are occasions when I am speaking to an audience – I imagine that I can hear a whisper in the audience.”
” And what is this ‘whisper’ ?”sneered the Banker.
” It seems that there are some who think that I am a Banker – because that is the sacred word that imagine I hear. On some occasions, I can hear it several times. There must be many who think that I am a banker. Can I at least come in? Just to see?”
” Why should anyone think that you are a Banker? Do you receive a bonus? Do you have large expense account? How big are your share options?”
” I have none of the Sacred Trappings – I am merely the Prime Minister of the Uks but there are those who see me nearly as important as a Banker. In fact, sometimes I hear whispers which make me think that the people wish me to be in charge not only of the Cabinet, the country but of even …………………the Bankers.”
Camron immediately looked down at his feet because he sensed that he may have gone too far. His entourage cowered.
The Chancellor Gideon tried to make himself even more invisible and only just stopped himself from laughing by biting so hard into the back of his own forefinger that blood flowed from the wound. As you would expect, it was a clear liquid.
Shocked, the two Gatekeeper Bankers took a step back. They had never heard such a preposterously outrageous claim. “In charge of the Bankers???? Who? You?!!”
They knew in that instant that they were dealing with a “Dangerous” but decided to continue the dialogue and try to learn more.They didn’t usually have contact with people.
They had heard the legend that one day, a simple creature would come to the Gates and become “In Charge”. No-one quite knew what this strange phrase meant but they wanted to be sure.
Was this “The One?”. They doubted it because the legend of the god Euro suggested that the one who would one day be in charge, was to be a red-headed female called Merkil from the Land of the Goths.
But the pink-faced stranger had just used the sacred “In Charge” words!
It was a joke among Bankers because they knew that no-one but a Banker could be “in charge”…… They were the chosen ones. They used to serve the people but now the people served them.
” Are you ill? What are the people saying?” The Banker took out his Magic Blackberry and punched at some buttons. His eyes did not leave Camron’s pink face, who continued:
” Sometimes when I am speaking in riddles to the people of The Deficit and suchlike – I seem to hear not just “Banker” but also “King” Banker. That is the phrase! They call me a “Right King Banker”. That is the phrase I hear.”
” But can you talk in riddles? Can you make money disappear? Are you so self-serving, selfish and thick-skinned that you can ignore the criticisms of all those around you? How good are you at offering help to those who do not need it? Were you unpopular at school? Have you ever given money and then changed your mind and taken it back? Well…… have you. Do you have the Gift of Sneer ?”
It was like a bolt of lightning. Camron knew! He was The One !!
He tried his smile once again. Some recoiled in disgust but there were those within earshot who were also beginning to believe that perhaps Camron was “The One”.
Camron certainly believed it. He would ask for an Inquiry – just to be sure. He liked an Inquiry – that most holy of Ministerial Sacraments. Meanwhile, he decided to take the bull by the horns – he would assert himself.
” Bring the Head Banker to see me here at the Gates. Tell him that David of Camenor (for that was his real name) wishes to see him!”
There were gasps. Humans, Uks and Bankers looked at each other. For what seemed like an eternity, there was a cold, dark silence – just like the one which would follow a joke made by the Prophet Milibrand the Younger!
Just as suddenly, the beyond-dead atmosphere was broken by a commotion inside the Gates. Word had been sent to the Head Banker. There was no going back!
Eventually, a short man in a black silk pinstriped suit appeared at the gates. His gold tooth and diamond in his chunky gold pinkie ring flashed as he removed his Fedora. The black overcoat remained draped over his shoulders as he approached Camron.
Camron noticed that the Head Banker’s white silk tie matched the handkerchief tumbling out of his breast-pocket. He briefly imagined his own finger in the Head Bankers chunky ring!
They stood toe-to-toe. It was the Banker who spoke.
Camron felt more resolute than he had ever done in his life. This was his destiny! He would be the saviour of the people. This was his time. He cleared his throat.
” On behalf of the people, I command you to lend them the money so that they may enter the Gates of Prosperity.”
It was the briefest and most “to the point” statement that Camron had ever made – and he’d managed it without an Inquiry! He felt quite exhilarated and just in case someone was sketching this historic moment, he struck a heroic pose and focused his bloodshot piggy eyes on the horizon.
Karney the Head Banker moved even closer. They exchanged knowing smiles, although the Head Banker’s eyes retained all the charm of two bullet holes .
Almost imperceptibly, as Camron leaned to wards him, the Banker’s expression changed.
Swiftly, he brought his knee up.
FALLING INFLATION with Rising Prices?
When you are told that inflation is falling, you would naturally expect prices to be falling . That ain’t necessarily so!
Many years ago, when I worked for a very large bank, I sent a team of people into town in order to find out whether the average British adult understood percentages. The answer was a resounding “No!”
MOST of the people we interviewed had NO IDEA about percentages!
Banks, supermarkets and even the government know very well that most people are either thick or at best borderline thick as far as simple arithmetic is concerned and they take full advantage.
Supermarkets “mix and match” their prices, so that you need to have the brain of a Stephen Hawking to decide whether it would be cheaper to buy three bags of crisps for the price of two or perhaps two at a different price with one free or maybe six bags with 10% extra. By the time you’ve made several purchases like this, you can leave a supermarket mentally exhausted.
Banks will be paying you interest at anything from 0 .01% p.a to 3.00% with maybe an introductory offer of three months with an additional 1.5%. Interest on credits is calculated from the day AFETR your deposit but debit interest on withdrawals is applied on the day of the debit. When a bank returns a wrongly applied charge, will it also re-credit the debit interest? If it does – then at what rate? You don’t know? You’re not alone.
The Government will throw statistics at you through the medium of television, delivered by double-first Oxbridge Economics graduates who have absolutely NO idea how to explain economics concepts – except to other economists. Percentage increases in GDP, percentages out of work, percentage decreases in the annual inflation rate. Percentage, percentages and even more percentages!
Which is better? a 10% discount and then VAT added or would you prefer the VAT to be added first and THEN take the 10% discount? If your energy bill tells you that the discount on your Gas is 5% and the discount on the Electricity is 5%, how many percent savings will you me making in total? What is 12% of £60?
Today, we have been told that annual inflation is on the decrease BUT we all know that prices are on the increase. How is this possible?
I am going to try and explain but in very simple terms.
Assume you bought a radio in January 2013 and you paid £95.70. If you then went to the same shop in January 2014 (a year later) and the price of the same radio had increased to £100, the price would have increased or INFLATED by £4.30. which is an increase of 4.5%.
Let’s now go back to February 2013 when the price of the same radio was £100 and assume one year later, in February 2014, the price increased yet again, this time to £104. That means that the radio would have increased in price or INFLATED by £4, which is 4.o%.
So, coming back to this year, between January and February 2014 (in one month), the radio’s price has INCREASED by £4 but at the same time, inflation has DECREASED from 4.5% to 4.0%!
Therefore, we have a rising price but simultaneously, we see falling inflation.
The media are already mumbling something about “falling food prices etc” having caused the present fall in inflation.
It is nothing of the sort : Yes, falling prices do contribute but the way that the calculations are made can be the major contributor to the figure because it is calculated in discontinuous annual slices. Today’s inflation figure depends on what the inflation figure was a year ago.
Having said all that, on this occasion, the CPI has actually decreased in one month
Mind you, as usual, whatever the basis of the inflation calculation, it will still not stop the politicians from claiming all the credit.
(Unless, of course, the inflation rate goes up too drastically, which is when those pesky “external factors out of our control” come into play!
The new Deputy Governor of the Bank of England is to be JOHN CUNLIFFE. Currently, he’s the British Permanent Representative to the EU. As Head of the European and Global Issues Secretariat from 2007, he used to be Gordon Brown’s Advisor on International Economic Affairs and on the EU. He remained in the post until 2012 when he moved to Brussels.
Those Teflon Banks.
If the economy was purring along, companies were forming and not going bust, banks were lending properly (not statistically) and the government didn’t regard any GDP growth above zero as an achievement, most of us would not have any problem with those banker salaries and bonuses.
However, it is not sunny, manufacturing is down and we have a government which appears to be indulging in “Government by Accounting” as an increasingly panicked Chancellor justifies Welfare Butchery (in a newly-acquired Estuary English accent), to an assembled band of Morrison’s workers.
Meanwhile, senior bankers continue to pay themselves more than many of the largest and most successful corporations (the ones that make and export stuff).
As Chancellor Gideon might say these days: “Something ain’t right, innit?”
Since the largely-forgotten catastrophe of 2008, the incomes of many bank directors have increased by up to 60%!
So what else has happened to the banking industry since those far-off days? Oh yes………..they’ve had bailouts totaling BILLIONS, they have mis-sold an array of financial products and the Bank of England has handed-over BILLIONS in Quantitative Easing for a variety of reasons, ranging from the perennial “rebuilding of Balance Sheets” to “Lending to Small and Medium businesses” to “Increased Mortgage Lending” ……(Notice I have placed those increasingly creative QE euphemisms in inverted commas!).
Admittedly, the effect of credit defaults on the banking system leading to those 2008 issues was devastating but the problems were self-inflicted and a direct result of the banks’ reckless leveraging with financial instruments, such as mortgage-backed securities and credit-default swaps. Virtual money……just like Quantitative Easing.
The final straw should have been the LIBOR-fixing scandal…but the Quantitative Easing meant that the banks could easily afford the fines and legal settlements and still maintain those eye-watering incomes.
That wouldn’t be so scandalous if it were not for the fact that LIBOR is used to determine interest rates on student loans, mortgages and many other lending vehicles — and was “adjusted” in whatever direction benefited the banks’ bottom lines and the resultant profits upon which many of those bonuses were based.
The question is – what do the banks have to do in order to stop being the government’s poster boys?
They certainly do not have the confidence of the ordinary investor, because , let’s face it, they don’t really NEED savers and depositors because they can either make cash by “adjusting” and then plundering the equities and bond markets or be given it by indulgent and clueless governments. Small businesses are wary of them because they (quite rightly) fear being ripped off.
There will be further scandals, more fraud, more “faux-outrage” from government Ministers but no meaningful legislation, culture change or reorganisation.
They are truly The Untouchables.
ECONOMIC CHAOS ?
The piece below is over 2000 words long and I have just completed it for a client .
It is about the random nature of an economic system.
Have you ever wondered why ALL economic predictions are wrong? Have you noticed that in spite of a proven record of error, economists and politicians continue to bang their heads against the forecast-wall and refuse to do anything else but continue to predict outcomes which by now, they must realise will be incorrect?
They certainly use all the latest computer models which have been empirically derived and used for many years.
So, are there any incorrect assumptions about “fundamentals”?
Is the economic process Stochastic (a sequence of random variables)? Or is it Deterministic (when the output of a system is totally dependent on its initial state and subsequent inputs – and therefore, predictable)?
(Mind you, to add to the confusion, deterministic systems may occasionally produce random and therefore unpredictable results. )
Is economics a question of Stochasticity v Determinism?
Why do I ask the question? Because there appears to be a total absence the ‘stable equilibrium’ predicted by classical economists.
On the contrary, Market Economics behaves like a collection of dynamically unstable systems. The instability is attributed to external ‘shocks’ rather that any fault in the basic concept. There is what can only be described as ‘non lineality’.
One solution to this ‘non-lineality’ is CHAOS THEORY!
So far, no real evidence has been produced of ‘low – dimensional’ Chaos in economic processes but there are definitely discrepancies between the ‘expected’ according to classic economic models and the ‘observed’. Just look at any economic prediction within your memory. It was probably incorrect.
We still have a ‘mechanistic’ view of the world and economics as a ‘hangover’ from 18th century SCIENCE.
Scientific thinking is very simple: ‘Measure, predict and adjust until you no longer have any more surprises. Then keep measuring to confirm that what you measured in the first place can be replicated’.
Economics was conceived on that same principle . It was established as a ‘science’. That’s where the Determinism crept in.
It was at this time that man first considered the possibility of his own intellect being so unconstrained that he would eventually understand the ‘Universe and everything’ through the medium of scientific reasoning.
This principle was applied to all sorts of activities and thinking – including economics.
The so-called ‘Enlightenment Policy’ would help man in his pursuit of happiness. Especially in the sciences. Science was cool and now in the early 21st Century it is enjoying a bit of a revival.
Of all the subjects on offer, Physics became the admired Paragon for Enlightenment and so it continues.
The way Physics works is simple: Carefully describe an environment and you should be able to predict the outcomes of any experiment conducted within that environment.
Likewise in Economics: Know the initial environment and you should be able to predict outcomes based on subsequent inputs.
The belief stemming from that philosophy is that EVERYTHING is governed by ‘NATURAL LAWS’ which are a set of ‘cause-effect’ regularities. That means that everything can be predicted.
These same principles have been applied to Economics.
A simple scientific rule is that ‘The state of any system is a consequence of what it was in the preceding moment…..and so on.’
In the beginning, random occurrences had no place in such linear thinking. Everything was governed by Mathematics and Laws.
However, there is one major flaw in the way that we ‘do’ science: That is our ignorance of the CAUSES which generate phenomena and events.
For instance, we know the effects of gravity – which we can measure but we don’t really know the CAUSE.
However, in spite of our ignorance of the exact causes of events added to the imperfection of our analyses, we still cannot have 100% certainty about the vast majority of phenomena.
Economists also appear to have forgotten both the imperfection of analysis and their ignorance or (at best) of the exact CAUSES of events.
What is the solution? What is to be done about our comparative blindness?
Our ‘crutch’ is the science of probability. Chance.
Current economic thinking is a throwback. In economics, the world is still viewed as totally deterministic.
‘STOCHASTIC’ is non-existent – as is uncertainty because uncertainty is treated as ignorance or a failure to understand the deterministic rules of a very complex system.
Yet, with ALL our processing power, no-one has yet been able to establish those rules which should predict outcomes.
So, as Chaucer wondered in The Nonnes Priest Tale – Travelling from A to B: Freewill or Predestination?
Looking at the unpredictability of economic outcome, we move from linear to non-linear dynamics, from certainty to probability, from Economic Theory to Chaos Theory.
Theories of economics have been shaped by the assumption of ‘Rational Man’ who behaves in accordance with a known set of rules.
The evolution of economics into a science was ‘booted’ into becoming a science when it was ‘mathematicised’. Formulae arrived and suddenly, it became a bona fide branch of Applied Mathematics.
Many of the original people who translated economics into a mathematical form were physicists, engineers and mathematicians…… and it still shows. At that time, their view of the world was ‘linear’.
Does that work in economics? The short answer is ‘no’. That is why economists are struggling, interpreting and making excuses.
Marshall in his ‘PRICIPLES’ compared the study of economics to the study of tides. The number of variables affecting tides means it is impossible to create a consistent dynamic picture.
Even nowadays, there isn’t enough processing power to generate an accurate picture of such a dynamic system, especially as the number of variables affecting such a system is, for all intents and purposes – infinite.
Imagine random stones being thrown into the sea or small outcrops of rock or variations in the seabed. They all have an effect on the ‘shape’ and speed of the tide.
And so it is with an economic system: lots of rocks, stones and other variables.
It is not possible to formulate or predict a picture of such an infinitely dynamic system.
Currently, economic theory appears to predict that any shock to such a dynamic system will (obviously) have an effect on the system but that it will ultimately converge-to or seek either a new equilibrium or ‘tend’ towards its original equilibrium because, after all – that’s what ‘systems’ are supposed to do!
Economic Theory assumes a tendency towards stability and equilibrium with certain ‘oscillatory happenings’ on the way.
So we have a situation where economic thought was (and still is, in most cases) linear, deterministic and quasi-dynamic. That is to say, the ‘set-in-concrete’ notions of certainty, invariant economic laws and sameness……………..rather than approximation, probability and infinite variety.
For instance, the Bank of England predicts an inflation rate one year ahead, based more on hope than fact or perceived fact. But when such predictions are (always!) wrong, there is no revisiting of the thought process, merely another prediction with little or no basis in anything-in-particular.
Often, both ‘inputs’ and predicted outcomes are decided by committee and vote!
All predictions appear to be based on an assumption of an ultimate convergence of economic process to stability, via those periodic cycles which, although not understood are treated with a certain sense of fatalism.
Chancellors are so locked into predictions based on erroneous facts that they will even massage their outcomes in order to land somewhere near the expected landing point – purely in order to retain credibility not only for themselves but also for ‘the system’.
What cannot possibly be countenanced are the random fluctuations of what is most likely a permanently unstable economic system. We don’t do that sort of thing because it may suggest a lack of control!
Let’s have a look at non-linear Economic Dynamics.
Actual (REAL) economic results indicate little resonance with the symmetry and regularity suggested by a linear mechanistic dynamic system. (Something that moves predictably along a pre-determined path).
On the contrary, fluctuations and movements are totally unpredictable. That means that regular Deterministic Laws cannot apply.
If we look at an economic situation in say, the Eurozone at a particular point in time, we may try to predict an outcome in say, 10 years’ time.
However, a small variant or an incorrect assumption in our analysis of the initial economic situation will have an effect on the ultimate outcome. The earlier that variation occurs, the more devastating will the effect be.
For instance Greece’s hidden debt at the time of its accession to the Eurozone, undetected at the time, is having a huge effect on the Eurozone’s economic outcome.
Meanwhile, the economists, bankers and politicians crave and need the comfort of ‘stability’. They know that the further the Eurozone travels from the initial conditions at Greece’s entry into the Euro, the more anomalies“The Greek Effect” will generate. It’s a self-amplifying issue.
Consequently, the bulk of the work of Eurozone politicians is now concentrated on creating a series of ‘faux’ stabilities.
It is the fallout from Stochasticity which is causing fear with Determinism being their comfort and shelter.
It was only 60 years-or-so ago that stochastic considerations were appended to classical economic theory.
But the so-called New Classical Macroeconomics was no more than a compromise. “Let’s introduce a Factor X because we can no longer ignore it.”
Yet, the economists still needed their ‘models’ – because deep down they were still the mathematicians and physicists of old.
A formula was devised (SLUTSKY) which took the linear dynamic business cycle model and added random (not necessarily economic) terms which attempted to explain the real ‘actualités’!
At last, an attempt had been made to explain ‘exogenous shocks’ to an economic system by the introduction of nothing more than random error terms.
But what was REALLY missing in classical economic reasoning was the concept of NON-LINEARITY.
So, the battle was between a Linear Model with a Stochastic Term (a fiddle factor) versus a pure Non-Linear Model.
Obviously by now – 200 years from the beginning, we have to assume that the evidence for linearity in economics has been overestimated!
So, if we agree that we do need a new non-linear model of econonomics, what are we searching for? What are the other ingredients and how do we ‘work them in’?
Do we want a synthesis of economics, psychology, politics and sociology? Or do we simply stick to the notion of determinism?
Human evolution is viewed as a random process (although the way it is often expressed makes it seem as if scientists view it an ‘inevitable linear’).
The evolution of an economic system is also pretty random, except that, applying psychology, politics and sociology, it can never be a system that can develop naturally. (For example, Survival of the Economically Fittest).
Mind you, economists have already had several attempts at introducing the concept of non-linear economics.
Followers of Keynes developed theories which generated Real Business Cycle Theory but any exogenous shocks to the new non-linear system were considered as merely ad hoc disturbances.
Economists could NOT break away from LINEAR THINKING. Linear thinking was being applied in an attempt to imprison a loose and free system, which tended to CHAOS.
The result? More economic models that you can shake a stick at!
It is only fair to say that our understanding of economic phenomena has been greatly enhanced by all these models and formulae…… but still no cigar. No General Theory of Economics. No equivalent of E =mc2….+εe
So Chianella, Pun, Goodwin, Kaldor, Baldrin, Woodford, Barmal, Benhabib etc have all done their bit but we’re still NOT QUITE there.
Unfortunately, for all intents and purposes, many of the models did no more than introduce the concept of economic ‘white-noise’.
Chaotic systems generate their own randomness without need for external input. Therefore in a chaotic system, predictions can ONLY be very short term and even if there were deterministic rules within such a chaotic system, an inability or failure to 100% ‘book’ the initial conditions of the system will always yield forecasting errors.
This all suggests that economic forecasting (except that on a very short time-scale) is a nonsense. PLUS – the bigger the system, the bigger the CHAOS.
That would suggest that a proposal such as a EUROPEAN ECONOMY is a flawed concept because there is very likely to be an exponential amplification of Chaos.
The dynamic of a mega-economy is very different to a housewife balancing the books at home – although economists are still applying the same principles to both.
Unfortunately so far, classical economists continue to resist economic chaotic concepts.
The reason for this apparent intransigence is simple: it is very difficult to extract evidence of chaotic dynamics from economic data – especially on a meaningful scale. Especially if another dose of chaos is injected into the ‘mix’ by erroneous or spurious data.
In order to predict in a chaotic system a VAST (infinite) amount of data is required – far more than is normally available and so far, the search for Chaos in economics has not been successful.
Meanwhile it is Chaos which is making long-term economic forecasting totally impossible and increasingly sophisticated and precise measurement of ‘initial conditions’ incredibly difficult and potentially prohibitively costly.
If we imagine an economy to be like a cloud – subject to all those forces that clouds are subject to, we can see the impossibility of a mathematical model which can predict the size, shape and exact direction of the cloud or even its shape and volume as it travels.
Its ultimate shape will always remain a mystery.
Politicians, bankers and economists ought to be able to say ‘I don’t know’ without us constantly expecting magic answers which do not exist.
For example: ‘Mr Chancellor or Mr Banker – what will be the effect on the economy of billions in Quantitative Easing?’ Correct answer? ‘We don’t know.’
“The initial conditions of a system are always uncertain, while Chaos guarantees that these uncertainties make prediction impossible.” (Heisenberg)
THAT is the essence of Chaos within an Economics System.
Some may be wondering about the timing of Bob Diamond’s decision to “walk” from what is the best-paid and most high-profile banking job in the UK. Some may believe that he was hounded out by the banking establishment.
I reckon that he walked in order to free himself-up ahead of the ridiculous inquisition by the Treasury Select Committee. I sincerely hope that they leave their briefcases on the table in front of them and remember to wear tin hats – because Barclays Bob is going to give them hell. They will be forced to listen to a few home truths about the conduct of not-only Barclays but the entire politico-banking establishment.
Believe me, Bob knows where ALL the bodies are buried and he’s the first guest at the Wake.
As usual, we’ve had the puerile Punch and Judy exchange between the Prime Minister and the Leader of the Opposition. Both have diminished themselves through their conduct over the last wee. (If that was at all possible)
Meanwhile, the media (and I include the Social Media) have seen an outpouring of hysteria by individuals who hadn’t heard of Libor before last Wednesday. Mob hysteria at its worst.
Mind you, that is so typical here in the UK. First we “denounce”, then the Inquisition, followed by the Inquiry and then it’s back to normal as we look for the next victim.
If there have been transactions which have inflated profits, I hope that in their haste, government Ministers have not forgotten that there may be billions in the Exchequer which will have to be repaid if tax has been generated on illicit transactions. Inflated bonuses have also been subject to millions in taxation.
It’s not only the banks who are going to have a lot to unravel – but of course, these days no-one thinks before they act.
Starting with the baying politicians and media, a breathtaking lack of understanding of complex banking processes has clearly been demonstrated. The same lack of understanding which was exhibited by the Directors of Banks prior-to, during and certainly after the last bank crisis.
Make no mistake both the Bank of England as well as the Financial Services Authority have been complicit. Those pre-Lehmans LIBOR deals, probably saved the British Government from having to bail out Barclays and as other banks have also doubtless been guilty of the same misdemeanours, the Government will have saved billions on the 2008 bailouts.
(What I mean to say is that the banks were bailed out – but they weren’t bailed out enough. The last four years of “rebuilding balance sheets”, non-lending etc have clearly demonstrated that as usual, the government only did half of the job)
It is the Bank of England, the Financial Services Authority and the grubby British Bankers Association which should be standing shoulder-to-shoulder in the dock and hopefully after Bob Diamond has said what he really thinks and knows, they’ll be lined up and taken down.
Today, Mr Diamond, I’m on your side.
Show them Hell!
I have been predicting the collapse of the dollar followed by the collapse of the pound sterling for about 12 months. the phrase ‘double-dip recession’ has now gone into the language but again is one of those phrases which is quite meaningless because I do not believe that we ever came out of recession.
Economically speaking, we have all been whistling in the dark.
Today the US dollar plunged to its lowest level against the Japanese yen in 15 years and fell to its lowest level against the Swiss franc in 27 years.
The world currencies which are going to do well in the next 5 to 10 years of those which belong to countries who have something to sell, that is to say countries which have minerals and metals in the ground and/or any sort of manufacturing. Australia is such a country and today the American dollar fell against the Australian dollar to its lowest-ever level.
Again about 12 months ago I predicted that gold was headed for $2000 an ounce. Today it is already at $1360 an ounce. That’s what happens when the dollar plunges and investors start to buy gold by the ton!
World governments are plugging the odd financial hole here and there but, in the grand scheme of things, they are impotent to stop the meltdown of the dollar.
Apart from accelerating the value of gold, what else is the demise of the mighty dollar achieving?
There are only THREE major asset classes. Gold, commodities and currencies. As investors dump the dollar and rush for the exits marked gold, commodities and other- currencies-as-long- as-it-isn’t- the- dollar, there are two certainties. The first is that very soon the US government will have no choice but to devalue the dollar. The second is that the dollar’s plunge has put incredible pressure on the price of food as investors rush to invest in wheat, corn, soya etc.
By the end of this year, the United States and the United Kingdom will be leading the Western world in unemployment statistics as both economies are losing jobs at a greatly accelerating rate. In 10 days time, the British Chancellor will give the British unemployment statistics even more momentum by declaring thousand more public sector job losses. In the past four weeks, the United States has declared another 95,000 job losses.
Both the Federal Reserve and the Bank of England are inking the printing presses – ready to print even more dollars and sterling. That will inevitably lead to currency devaluation which in normal circumstances would inflate an economy . However, after the United States and United Kingdom, there is a long queue of countries also wanting to down-value their currencies. That way (if such a thing were possible), they could all default on each other’s debts. Never mind, perhaps the banks will bail them out.
As recently as two days ago, both the IMF and the G20 admitted that this is not the end of the world’s economic troubles but the beginning of something truly terrifying:
It is simply a question of who blinks first and which economy can print money the fastest.
So what of the investors? They will produce what is known as a self-amplifying problem. That faster governments print money, the faster the investors will dump any currency they hold and the faster they will invest in gold and commodities. That will inevitably give rise to chronic inflation and a very unpleasant end-game.
Will all these shenanigans affect the pound or dollar in your pocket?
Before you ask that question, make sure that you still have pockets that haven’t been picked by your government.
(THIS is from just over a year ago)
Double economic Trouble
The UK’s 2009 budget deficit is the worst in its history and the present government is doing very little to alleviate the potential problems and collateral damage because it is playing a waiting game. Instead of taking hold, the government is still bleating about bankers’ bonuses with most of its energies focused on an impending General Election.
It is very doubtful whether the government has finished handing money to the banks and it is very likely that the UK budget deficit as well as the rate of inflation will rise over the next two years.
The explosion in the supply of gilts would be bad enough if the Treasury only had to borrow enough to equal each year’s budget deficit but the time will come when the Treasury has to borrow enough to replace maturing gilts as well as enough to fund its deficit— and that means an even greater avalanche of gilts will need to find buyers each year.
The Law of Supply and Demand dictates that when you get a massive increase in the supply of anything, its value plunges — and United Kingdom gilts as well as US Treasury bonds are no exception.
So far, most investors have been willing to pay a relatively high price and accept lower yields but now even that is changing! The most ominous “noises” are coming from China which is the the single largest holder of U.S. debt. Last month China dumped more Treasuries than in ANY month since the US government started tracking the data in 2000. Unfortunately for the USA, China holds nearly one half of its debt.
Last week’s US Treasury auctions turned out to be a monumental failure, with demand extremely weak. The 30-year auction was especially weak: Indirect bidders — mostly foreign governments and investors — took just 28.5 percent of the bonds sold, compared to a ten-auction average of 43.2 percent percent. That is ominous.
As a result, prices slumped and yields surged. In effect, the U.S. Treasury had to bribe investors with higher yields to get them to buy. Immediately alarm bells began ringing at the Fed.
Four days ago, the U.S. Federal Reserve raised the discount rate on loans made directly to banks. The 25-basis-point (0.25%) increase was the FIRST hike in the discount rate since early 2006. Secretly, the Fed is in a panic to ward off a bond market collapse and the UK Treasury is concerned about a similar collapse in its own gilt market!
Sooner or later, the Americans MUST send the message that they’re serious about cutting back on their money printing. The same applies to the UK’s “Quantitative Easing”. There has been an announcement from the Bank of England to the effect that Quantitative Easing has stopped – for ever! The sad fact is, however that they don’t know whether to p**s or climb off the pot.
The danger of course, is that foreign investors could get an entirely different message: That Washington’s and London’s efforts to fight the most severe recession since the 1930s are waning or that they are deluded enough to think that their work is over.
If that happens, there will be turmoil — not just in the bond/gilt market, but in every other asset class. The two governments are between a rock, a hard place and more rock.
The Chinese are beginning to flex their muscles and have been especially vocal about surging U.S. deficits over the last year and have repeatedly warned that such deficits are unsustainable. As America’s largest financing nation they have also asked the Fed for some sort of guarantee on Treasury bonds. China owns over 40% of all outstanding U.S. Treasury supply – or more than $1 trillion dollars!
If U.S. Treasury bonds are an ideal short then Britain’s gilt market is probably an even better speculation on the short side. The United Kingdom is amassing piles of debt and there does not appear any end in sight. The transition to a “do-nothing” system is further compounded by the fact that some economists say that the UK should spend its way out of trouble whilst others say that government spending should be cut. Some say that the government should start making inroads into its deficit while others say that it should wait.
The U.K.’s financial system is essentially bankrupt – no matter what cosmetic pronouncements are made by a frightened government. In 2008, the aggregate cost of bailing-out its banks exceeded the entire value of England’s gross domestic product.
Quantitative Easing (QE), the Bank of England’s euphemism for a massive credit expansion, is no greater anywhere than in the United Kingdom and the Bank of England’s multi-billion bond purchases have triggered a rise in inflation. The BoE has been an aggressive buyer of British gilts since the end of last year – especially longer dated gilts.
The big question for gilts is what happens once the Bank of England finally terminates or slows its QE program? Who will absorb this supply? The odds are pretty high that the UK will have a hard time finding buyers to finance its ballooning budget deficits.
Both Anglo-Saxon economies represent the worst long-term inflation scenarios and shorting their respective government bonds ranks as one of the greatest speculations over the next decade. There’s lots of fun to be had by the Investment banks and foreign investors and yet another opportunity for the banks (once again) to destroy (at least) two economies.
Drain the swamp first.
The British economy is not is very good condition and we know that the unemployment trend is still upwards. Retailers are continuing to shut down and the manufacturing sector is still in a comparatively unhealthy state. Does it not therefore seem strange that one sector of the economy – the one that doesn’t actually MAKE anything is posting profits in BILLIONS?
It is said that if one sector of the economy is delivering improbable margins, then something is wrong.
The annual rate of inflation here in the United Kingdom is 4% and in spite of what Mervyn King, the Governor of the Bank of England is hoping, it is set to rise. He is about to write to the Chancellor of the Exchequer and tell him that the sudden inflation rise is a mere “blip”. The blip will continue until the big manufacturing economies such as China and India awake from their torpor and once more start to run their production machinery at full speed. That is when the price of commodities – everything from soya beans and wood to copper and oil will increase in price because there will be a higher demand.
The collateral damage will be our inflation rate because as demand for goods increases, so will prices of raw materials, followed by the cost of the goods in the shop; the goods we buy. That is also why the Bank of England’s tinkering with interest rates in order to control inflation has always been such a nonsense.
Let’s have a close layman’s look at Barclays declared £11.6 billion profit for last year. The figures are an approximation but will not be too far out.
It is generally accepted that these days, a bank generates most of its profit from its Investment Banking activities and as Barclays Retail Bank will soon be declaring write-offs of £9 billions-worth of bad debts, we’ll concentrate only on the profit derived from Barclay Capital’s dealing.
If we assume that the £11 billion profit represents a 20% margin on the stocks and shares purchased, that means that in order to have achieved a profit of £11 billion, they will have had traded assets worth about $55 billion.
We may be forgiven for thinking that £55 billion is a lot for them to have invested in business and commerce but in reality, they may already have sold that volume in order to realise their profits.
However, if their profits are simply “paper” profits and not hard cash, they will still be holding onto those investments which can now decrease in value just as easily (and quickly) as they may rise. Hence the new craze for deferred bonuses.
The £11 billion profit shown on their accounts as profit is just a “snapshot” of the company taken on a particular day.
There is another scenario which is a little more worrying – and this does not just apply to Barclays but to any bank and this is why just over a year ago, so many of them were shown to be organisations of the “all furs and no knickers” variety. Banks often borrow money in order to buy stocks and shares, hence euphemisms such as “gearing” and “leverage”. They both mean “borrowing money”.
That is why all banks ought to be obliged to disclose their Gearing Ratio so that we know how much of their invested cash is their own. If a bank is highly-geared and therefore has to service a large debt, it will be very vulnerable to sudden market downturns. That is what happened in 2008/2009 – their foundations were either too soft or non-existent. (The Gearing ratio is a straight comparison between a bank’s activities funded with borrowed money and those funded with their own cash).
When Mervyn King uses phrases such as ” the banks are rebuilding their balance sheets”, it is because many of them were holding too many “assets” which they had bought with borrowed money plus many of those assets became liabilities which many banks hid. They are now required to have enough of their own money and assets before they either lend or borrow. “Quantitative Easing” was designed to accelerate the process. Did it work? The jury is still out.
Mervyn, the Chancellor and the Prime Minister are watching the banks “rebuilding “ on the assumption that prior to the reconstruction, they fully drained the swamp.
Some of us still have our doubts.
There is every likelihood of yet another banking scandal and it seems that yet another piece of the banking jigsaw has fallen into place. This particular piece indicates that at least two banks were near-bankrupt at the end of 2008. Not just “in trouble” but BUST.
The Bank of England extended secret emergency financing to Royal Bank of Scotland and to HBOS during the banking panic last September and October – without telling the taxpayer or shareholders. Lloyds shareholders were being asked to approve the takeover of HBOS. Yet they were not told about the multi-billion cash bailout of HBOS.
From the beginning of October 2008 when the Irish Government guaranteed the liabilities of all its banks, HBOS needed life support, with RBS also seeking emergency lending on 8 October. There was a certain amount of scoffing at the Irish when the secret handouts were being made by the Bank of England.
By mid-month, the emergency liquidity assistance for the two peaked at £61.6 billion , indicating that insolvency would have followed had the Bank of England not acted. The two banks clearly could not meet their obligations.
“This was a dire emergency,” said Paul Tucker, deputy governor of the Bank of England, giving evidence to the Treasury Select Committee.
These loans were in addition to the measures which provided liquidity to the entire banking sector, suggesting that even those measures were not enough to sustain either bank.
In addition, both banks had access to the Bank of England’s special liquidity scheme under which banks could swap mortgage-backed securities for government gilts.
The obvious question to ask is how many more secret deals have been made between the Treasury, Bank of England and the banking industry.
You may recall that in 2007, the Bank of of England provided secret finance to Northern Rock.
So what has happened to transparency within the financial sector – or is it a case some being more transparent than others?
Financial Services Authority
So the toothless old tiger that is the Financial Services Authority is going to be ripping up the contracts of those investment bankers who are taking unacceptable risks.
More empty gesture politics from Gordon Brown and his band of drowning funsters.
Not so many years ago, professional investors, fund managers, hedge funds and even those City screen monkeys who are now being targeted were investing in a series of investment “instruments” which “spread risk”. Imagine parcelling-up lots of mortgages thus creating a quasi-fund and selling shares in it. Mortgages produce a steady income for a bank or building society so it had to follow that if several individuals “owned” those mortgages, then any risk would be “spread”.
The point is that most investments are not a risk – except in retrospect.
Those investments derived from credit were good for a few years before they began to unravel – so there was plenty of time for the risks attached to those investments to be calculated. Some individuals did regard Credit Derivatives as unacceptably risky but those individuals were either suppressed or their professional and/or personal reputations were destroyed.
Remember Eliot Spitzer? He used to be New York’s Attorney General and then Governor of New York. When he was Attorney General, he dedicated much of his effort into pursuing white collar crime and had investigated many of the investment banks that were subsequently the main players in the 2008 banking crisis. He was elected Mayor of New York but subsequently disgraced when he was implicated in the “Client No. 9 scandal”.
So here was a very public figure who two years previously had stated that financial institutions were exaggerating their worth by falsely inflating the value of their assets. As far back as 2003, he was prosecuting companies for “predatory mortgage lending”.He foresaw the problems which would result from irresponsible mortgage lending. Generally accepted practices at the time involved hidden charges, little regard to an individual’s ability to repay and a system floating on a morass of bribes and kickbacks. This was the time when the Bush administration had aligned itself with the banking industry. Spitzer was chasing investment houses for inflating stock-values and he also pursued AIG for fraud. Then he sued Richard Grasso, a former Chairman of the New York Stock Exchange. That was for Russo’s non-disclosure of his deferred $140 million compensation package. He attacked all of the issues which floated to the top of the cesspit that was (and still is) the global banking scandal.
In February 2008, Spitzer published an article in the Washington Post in which he criticised the Bush Administration for inhibiting State legislatures from prosecuting predatory mortgage lenders. On March 17 2008, Spitzer resigned as Mayor as a result of the “Client No 9” prostitution scandal.
He had rattled the Establishment and the Establishment destroyed him. He had taken a massive professional risk and lost.
So what is acceptable risk? If I invest in British Airways – is that a risk? Is it acceptable or unacceptable? BA has major cash-flow issues, a staff crisis and it looks as if they might merge with Spanish Airline Iberia. Should I take a risk?
Not so long ago I invested in a small company whose shares began a vertical descent two days after I had acquired them. I telephoned the company’s CEO who told me that the company’s long-term prognosis was good so I took a risk and bought a load more shares. Three weeks later, the share-value soared to three time the price that I had paid – because the company had announced that it had secure additional finance. I got out immediately. Three more weeks later, the company’s share were suspended by the Stock Exchange and they went bust.
I had taken an unacceptable risk but had made a huge profit. Would the FSA pick that up and rip up my contract (if I had one)? Or does the Government REALLY mean that the FSA will be allowed to tear up a contract but only if the investment banker takes an unacceptable risk which subsequently loses money.
This latest announcement at least shows that the Government and its advisers DO have something in common with bank executives. They do not understand the nature of risk. They proved it during the “mortgage years of plenty” and they’re still proving it through their intransigence.
As far as “unacceptable” risk is concerned – unacceptable to whom? How did the FSA’s Chief Executive and ex-investment banker Hector Sants become a multi-millionaire during his stints at UBS , Warburg Dillion Read, Donaldson, Lufkin & Jenrette and Credit Suisse First Boston?
The government says that is is encouraging business and entrepreneurship. Again, they do have that in common with the banks. A total lack of appreciation of what entrepreneurship is all about. Risk.
It is the entrepreneur who puts his house, factory, cash and family on the line. The indulgence in unacceptable risk is what an entrepreneur does for a living. The banks don’t understand and do not want to be bothered by the small-to-medium entrepreneur because business-risk does not have the gilt-edged backing of a dazed Treasury and a “still-in-shock” Bank of England.
The “feast or famine” life of the small entrepreneur is an anathema to those working within the banking system because their own particular brand of feast or famine comes with salaries and bonuses. They have responsibility without accountability, whereas the entrepreneur has both and unfortunately, on many occasions, the accountability is to a bank.
There are those within government and the banking industry who do know where the bodies are buried and where the risks are – but the Spitzer affair tells them that dissidence is not worth the risk.
The FTSE 100 index held its value yesterday – that’s in spite of the bad economic news and the announcement that the United Kingdom is still very much in recession. The FTSE 100 seems to be almost impervious to any bad data that can be thrown at it. GDP data should have shocked the market because it showed that the UK economy unexpectedly contracted in the third quarter. Sterling tumbled more than a cent against the dollar and gilts jumped. On the face of it – nothing seems to make sense any more. Read More
Conservative Party Conference week.
Boris Johnson once again has showed his leadership credentials by being approachable, witty and engaging. He does make the rest of them look a little bit pedestrian. In spite of his shambolic image, you can sense a rod of steel running through both his speech and personality. One to watch for the future. Imagine a TV debate between Boris and Gordon Brown. It will never happen – but what a prospect.
- Boris Johnson and friend
George Osborne’s department lined up like a row of fairground ducks was quite diverting. George Osborne is gradually shaking-off his Tim Nice-but-Dim image.
It’s very brave of David Cameron to allow Ken Clarke a voice – bearing in mind his strong Euro-sceptic stance. The Conservative Euro-sceptics should not attempt to embarrass David Cameron at Conference. They all seem to think that the next election is already won.
Custom dictates that when any Party is in the middle of its Conference, the other Parties keep quiet and do not make any pronouncements. So, Alistair Darling’s crudely populist announcement of cutting the incomes of GPs and other high earners leaves us in no doubt that the Election campaign is now in full swing.
Retirement at 66? Purleeeze George – you can do better than that! Many will still retire at 65 and most of those who have not retired will be out of work – unless there is a local B&Q. The ACTUAL money saved will be negligible and it was hardly worth the leak.
It appears that as far as cutting Public Expenditure, the main Parties are now engaged in what can only be described as a peeing contest.
It was good to see that old duffer Kenneth Brown. So there is life after death!
The Editor of the Sun did not have to buy a single drink in the Conference bar last night. Hardly surprising but the Sun’s move to withdraw support from the Labour Party caused some disappointment among Conservatives. About as much disappointment as finding out that Gary Glitter can’t babysit tonight.
On a completely separate subject, the annual yakfest that is the 11th Pride of Britain Awards took place last night. One is never sure why only some kids with cancer attend the show, why only the kids whose parents managed to inform the media of how their brave 2year-old “dialled 999 whilst motherwas having a seizure in the bath” receive bravery awards and why Gordon Brown has to make a “surprise” appearance. We all like proper heroes but nowadays it seems that we have developed a real “need” to worship – as long as it involves lots of celebrities. If Michael Caine is made to feel any more ” ‘umble” I shall throw up. Having said all that, I’ve never managed to watch the show. This year there is a teacher whose Maths lessons contain RAP (one presumes that the “C” is silent). Then there’s the lady who stood between a small child and a Rottweiler. The best one is an ex-heroin addict with 176 convictions who now helps “young people to change their lives”.. As long as Simon Cowell, Tess Daly and Davina are there plus a room-full of tear-wracked luvvies we can rest assured that all’s well. Now where can I buy a Rottweiler? I’ve just noticed something and it is the final piece of jigsaw in a theory that I have been working on for some time. Here goes. I believe that Christopher Biggins is God. Why? because God is everywhere.
Safety campaigners are saying that if the Conservatives axe speed cameras, the accident-rate will increase. Here’s a compromise – and it will be comparatively cheap to implement. How about a sign that says “SPEED CAMERA IN 50 YARDS” on either side of every single speed camera in the country. Not a good idea, I hear you say. Why not? Oh I see. What you really want is speeding motorists that produce a revenue and not necessarily slow motorists who do not.
Sir James Dyson managed to look like a prat when his autocue failed. A Dyson Vacuous.
Liked the announcement today that the Conservatives will begin a process of ridding us of Government forms and red tape. THAT’S the sort of thing we like to hear.
Conservatism SHOULD be the politics of giving everyone in Britain the ability, opportunity and tools to look after themselves and their families – without the smothering State intervention that is the hallmark of Socialism – even when it is wearing the thin veneer of New Labour. That should ALWAYS be, of course, coupled to the State taking care of its weakest citizens. Call it benevolent Conservatism if you like. Simple. THAT is the message that David Cameron and his rejuvenated Parliamentary Party should be promulgating. Needless posturing and name-calling should have no place in the modern Conservative political toolbox. David Cameron should look straight down a camera lens and explain what modern Conservatism is. Unsurprisingly, there are those who have never heard exactly what modern Conservatism represents because their views and opinions are still being distorted and influenced by New Labour spin.
George Osborne is looking very promising.
So why DOES Jordan look as if she’s wearing a gumshield? Is in “hommage” to her cross-dressing new beau and professional thug Alex (Max – you’re running out of crap copy!) or has she been “done”. I think that we all know the answer to that one.
David Cameron has been photographed with a glass of champagne. Big deal! I shall simply repeat a previous report: The biggest consumption of champagne at Conference time is by Labour. That was told to me by a former Chief Barman at the Grand Hotel in Brighton. Hypocrites.
Today, all the Socialist rags are laying-into George Osborne who has introduced a bit of realism into our understanding of the economy. One suspects that once the Conservatives are in power and manage to have a good look at the books, they will see that things are far worse than has so far been admitted by ther present incumbents.
We are still living in cloud-cuckoo land as far as the economy is concerned. The FTSE is UP. House prices are UP, Gold is UP, Tesco shares are UP. In fact – everything is UP. Sounds great doesn’t it? So why aren’t we all feeling more positive. The fact is that the FTSE is up because money is being invested on the Stock Exchange as a result of bank savings rates being so derisory plus, much of the money currently being invested is foreign so it could leave us at any time. The money that is being invested by British banks is not all real money. Some of it is the stuff that has been printed by the Bank of England and handed to the banking system. Mr Quantitative Easing strikes again. Gold has been creeping up for months. It is normally viewed as a “hedge” – somewhere to run when equities and commodities are down in price. That is not the case at present. Something that has gradually been creeping into our collective peripheral vision is the slow-collapse of the dollar. There are strong rumours that very soon, oil will no longer be traded in dollars – there is foreign plotting afoot! Once the dollar really does go into freefall, share and commodity prices will tumble very quickly. The British economy has much to fear because the factors that it has traditionally relied-upon to buttress the economy have all but gone. The City of London USED to be the world’s financial centre. That is no longer the case. WE used to MAKE things and export them. Nowadays, that is down to about 17% of the country’s total economic output. Finally, the British economy and Governmemt are “over-borrowed” with little realistic prospect of repaying much of what was borrowed. If George Osborne had been in possession of ALL the facts, I don’t believe that he would have wished to even beigin his speech yesterday. He did very well and reminded us that we need to take a more collective and inclusive approach to heal the economy.
Yesterday I said that I would probably throw -up if Michael Caine was once-again “umbled” at the Pride of Britiain Awards. Apologies to Michael as it was Joanna Lumley’s turn to be “humbled and overcome”. Please make it stop.
So Boris and Dave are ex-Bullingdon boys and used to piss it up, throw bread rolls about, get toffed-up and pose for silly photos. Go to any Comprehensive School on Prom Night (American import, I’m afraid) and watch scores of youngsters, toffed-up, arriving in ridiculous stretch limos and being encouraged to be extremely silly. So where’s the difference between our Grease wannabees and the Bullingdon Boys. Apparently, it’s only OK to dress like a posh prat and behave outrageously if you’re NOT a posh prat. It seems that those aspirational working classes are being herded by the Labour media back towards a concept which one hoped had been left behind – The Politics of Envy.
There was a great photograph of the Pride of Britain winners outside No 10 Downing Street. Sarah Brown looked very vivacious – so why did Gordon Brown look as if someone had inserted a six-inch ruler between his cheeks? Oh I see. Smile, eh? Wow.
Are we, as a nation, losing our sense of humour? We all remember Boris Johnson insulting Liverpool, Portsmouth and rather bizarrely – Papua New Guinea. He acknowledged all that in the introduction to his speech at Conference this week. Whatever you think of Boris, you have to admit that he carries a very mischievous sense of humour. That reminds me of a pilot who was censured by his bosses for the following Tannoy announcement: “Ladies and gentlemen, we are about to fly over Liverpool. Would you please ensure that you have placed your hands over your wallets.”
She used to work at Little Ted’s Nursery and is a pervert. Although her husband does have our sympathy, one cannot help but think that at some stage during the marriage, he would have benefited from a visit to Specsavers.
The Conservatives have announced that they will deal with binge-drinking and teenage violence through the medium of taxation. Surprisingly, this is the first Conservative initiative that I disagree with. Remember that some drugs are far more expensive than alcohol, yet, money is still found for them. The alcohol genie is so far out of the bottle that there are no initiatives that will ever change the Brits’ uneasy relationship with alcohol. Social Engineering through taxation does not work. Let’s face it, Brits drink to get drunk – and then they drink some more. A few more pence on booze will make no difference whatsoever. Practical tip: The increased tax will be on cider and strong lager so do what kids do already, buy normal lager and tip cheap vodka into it. Now what?
Could it be true? Avram Grant is returning to Portsmouth as Director of Football? That should cheer the place up. Here is a photo of Avram practicing his Gordon Brown smile.
- Sharon Shoesmith has launched judicial review proceedings against Haringey Council, Ofsted and the Children’s Secretary Ed Balls. She was in charge of Haringey Social Services during the Baby P murder. One of the great British traditions is that if there is a screw-up on your watch then you fall on your sword. Ms SHOESMITH DID HERSELF NO FAVOURS during her few TV appearances when the Baby P affair was at its peak. She seemed aloof, smug, unrepentant and unapologetic. ” I was following orders” is the usual excuse. Hers was “We followed all procedures”. That neither exonerated her, nor did it go down well with the public. Had she cried, begged forgiveness and made some sort of admission, the public would have been a little more sympathetic. As it was, Ed Balls did exactly the right thing in instructing Haringey to sack her without compensation.
Labour bleating noises have been heard again today. General Sir Francis Richard Dannatt, GCB, CBE, MC is our most distinguished soldier and tomorrow (Thursday) he will be officially announced as a Conservative Life Peer who will be advising the Conservatives on defence. General Dannatt was our highest-ranking soldier and Chief of General Staff. He was going to be promoted to Chief of Defence Staff , which means that he would have become head of all of our armed forces – not just the Army. However, Gordon Brown personally blocked the promotion and General Dannatt was instead given the consolation prize of Constable of the Tower of London. Traditionally the Chief of Defence Staff is principal military adviser to the British Government. Gordon Brown was miffed because of General Dannatt’s “repeated calls for better pay and conditions for servicemen”. So General Dannatt’s sins? Speaking his mind, not being a Brown “yes man” and caring about his soldiers’ safety and welfare. Gordon Brown really has no idea whatsoever – probably because he was dealing with a proper leader. It’s patently obvious that Brown does not recognise the species. He should learn that leadership is much more than Benito Mussolini-type posturing with overworked, overtired, adjective-free, moribund speeches.
Obama wins the Nobel Peace Prize. Quite right too. Climate, Democracy, Nuclear Disarmament – in fact, everything that he has touched so far. It looks as if Zimbabwe’s Morgan Chanderai was the runner-up. There is already talk and discussion of whether Barack Obama deserves the Nobel Peace Prize with only nine months in office. The fact is that the Nobel committee can see that in spite of the fact that Obama’s actual achievements so far are comparatively modest – he is by far the most influential individual on the planet as far as the short and medium term futures of the Earth are concerned. The progress that he has made in the last nine months is nothing short of remarkable.
It appears that today is probably the last posting day for Christmas. If you want to send cards abroad, you’re too late. Christmas parcels should have been posted by March 31st. Why didn’t Crozier stick to football. This is yet another case of a Business Model triumphing over the Customer. Perhaps Royal Mail should be renamed Royal Lemming.
Friday October 2nd 2009
- Ethiopia has suddenly become the focus for all anthropologists. An ancient skeleton was found in 1992 and it has taken 17 years for the research team to rebuild it. Why all the excitement? The skeleton belongs to an in-between species of humanoid about 4.4 million years old. It has been designated Ardipithecus Ramidus. It is not “the missing link” but by extrapolation, it appears that it is probably about 9 million years since the division between apes and humans. So where was John Prescott this week?
- The East of England Minister Barbara Follett is to stand-down from Parliament. She is (was) Minister for Culture, Creative Industries and Tourism. Her reasons for leaving? Yes, it’s the old chestnut: “For family reasons – to spend more time with my family”. Heard her name before? She’s the MP who claimed £500 to repair a Chinese rug ( don’t we all?) and she also claimed £25,000 “for security reasons”. She has since repaid all of the money. So how could she afford to sign such a large cheque? Her husband is millionaire pulp fiction writer, Ken Follett. Barbara and Ken epitomise the “champagne socialist” and are chums of Tony and Cherie Blair.
- Jobs for the boys. Former Northern Rock boss, Adam Applegarth is now an advisor to Apollo Management. They are an American Equity firm. Adam is advising them on the purchase of bad loans, including parts of Northern Rock bank, the former Building Society he brought to its knees. Perhaps a touch ironic but perfectly legal. He will earn about 200,000 per year which is a lot more than the thousands of people who lost their jobs at Northern Rock. It’s all very worrying.
- Today, Ireland will vote in favour of the Treaty of Lisbon. It’s their second attempt. The Irish economy is currently in such an appalling state that they appear to have little choice. However, if they do not support the Treaty, then it’s curtains for the Treaty.
- The International Monetary Fund (IMF) is predicting that the British economy will grow by 0.9% next year. That’s about four times the current politicians’ prediction. House prices have returned to their pre-crunch 2008 levels, the FTSE 100 index is UP. As one of the few people who predicted nationalisation of the banks, I am still not sure whether to put the Bolly on ice just yet.
- Vanessa George, Colin Blanchard and Angela Allen. They are the three baby-abusing perverts who are spread all over the newspapers today. Angela Allen is the one from Little Ted’s Day Nursery in Plymouth. She photographed herself sexually abusing babies as young as 12 months. Whichever prison they end up in, they are guaranteed some very close attention from other inmates. The burglars, drug dealers, fraudsters etc look almost honourable professionals next to these degenerates. I do hope that the other prisoners are not too gentle with them.
Thursday October 1st 2009
A survey has just been published of the world’s top Broadband Countries – taking into account speed etc. The United Kingdom is languishing in 25th place. The top country? South Korea. Is this another indicator of the rise of the East and the slow eclipse of the West?.
The Daily Mirror has adjusted its reportage of the Tories today – presumably in response to the Sun’s decision to back the Tories. It’s going to be a right mess leading up to the election. The gloves are off
BAE systems is about to be prosecuted for dishing out hundreds of millions in bribes. You may recall that when Tony Blair was in charge , there was a bit of a bribery scandal involving Saudi Arabia, but as they say – all charges were dropped. There is one thing that both our Government and Judicial System would do well to remember and that is that greasing the cogs of commerce through the medium of bribery is normal in many countries – especially hot ones. Many years ago, I sold a yacht for a $1million to an Arab Prince and we shook hands on the deal and arranged to complete the paperwork the following day. That night , my phone rang. It was the Prince’s “Private secretary and advisor”. This is what he said: “Although the Prince is a very rich man, alas he is not a generous man. You will also understand that he always seeks my counsel and almost always heeds my advice. I have yet to advise him as to whether he should complete this purchase – but I am sure that we can come to some sort of arrangement.” I was outraged! I told him that I did not make a practice of dishing out bribes and that I would report our conversation to the Prince. I never saw the Prince again. Some time later I realised that the Prince had probably been sitting next to his Secretary when he had made the call and it was probably his way of getting a few thousand off the price. I also recall another yacht-owning Middle Eastern client. Whenever we presented him with an invoice, I would ask the staff to make sure that it was itemised and added-up wrongly, but in his favour. Usually by either £50 or £100. Before handing over a wad of cash, he would add-up the bill himself, realise that it was incorrect , say ” Yes, that appears to be in order” and pay. He was happy and I was happy but more importantly, honour had been satisfied, he had won a little victory and he always came back to us because he enjoyed our little game. We should NOT always be so po-faced about the way that other nationals do business. It may not be pretty but it works.
Is it really the end of the Labour Party Conference? Thank You, God. Harriett Harman is not too chuffed about the Sun’s decision to support the Tories. She said: “Let’s face it, the nearest their political analysis gets to women’s rights is Page 3’s news in briefs.” It’s only a matter of time before Harriet gets the call from Hugh Hefner.
At the Labour Conference yesterday, the jurassic Tony Woodley, leader of UNITE, was cheered when he tore up a copy of the Sun. One presumes that he had looked at the pictures first. He said: “I suggest the rest of the country should do exactly the same thing”. Labour should persuade more progressives such as Tony Woodley to give voice to their views – that way they’re absolutely GUARANTEED to lose not only the next election but several after that. During Tony Blair’s tenure these Brylcreemed 50s throwbacks used to be kept in a darkened room or padded box until after Conference. A dignified silence without even a platform-mention of the Sun would have been far more powerful.
Financial Analysts seem to be confusing the state of the FTSE 100 with the British Economy. The fact is that many of the billions invested in the Stock Exchange consists of foreign money. That’s where many of the profits are going – abroad. Instead of flying to Monaco to play the tables at the Casino, many foreigner “investors” are winning lots in the Casino that is the London Stock Exchange.
The FTSE 100 has experienced its biggest quarterly rise in 25 years. Once again, this is being hailed as some sort of success. It simply means that lots of bets have been placed. The punters will be taking their profits soon. Then the Government can once again blame the bankers. Let’s hope that they don’t break the bank again.
Politicians are always saying that it is the Pension Funds and Insurance Companies own most of the assets traded on the Stock Exchange. In fact, between them, they only own about 25%
Today the national minimum wage rises by 7p an hour to £5.80 and for 18 to 21-year-olds, the minimum wage increases by 6p to £4.83 per hour. This is also the day when the government legislation on “tips” has changed. From today it illegal for bars, restaurants and hotels to use tips or service charges to make up a minimum salary. That is all very well but in the grand scheme of things, it is a comparatively trivial matter and possibly not a terribly cost-efficient move by the Government. Especially as the Government has already conceded that the changes governing tips will lead to an estimated £60m in extra costs to ensure the legislation is implemented properly. The new code will also lead to higher National Insurance payments. This is an inflationarymove because bars , restaurants etc will simply “up” their prices to maintain their margins. The British Hospitality Association (BHA) estimates the new rules could lead to an additional £130m in costs and up to 5,000 job losses. There are those of course who feel that a tip should be a customer’s expression of appreciation for good service and should not be used by an employer to bring wages up to the minimum. Mind you, both the Federation of Small Businesses and UNITE are both in favour of the changes. The only people who will be really affected are the tippers and the tipees. The customer tippers will experience increased prices and the waiter tippees may suffer up to an estimated 5000 job losses. There is a saying: ” If it ain’t broken – don’t fix it.” Needless to say, one of the few groups who will not be affected is Politicians. You may have heard that when they eat out or stay in hotels – it tends to be on expenses.
Friday September 25th 2009
Friday September 25th 2009
The mole who leaked the MPs’ expenses information to the Daily Telegraph has revealed what motivated him to do so – apart that is, from the £110,000 fee that he was paid. It now appears that his primary motivation was not money but the fact that serving soldiers were “moonlighting” at the House of Commons. They were working in the Security department and protecting the Civil Servants who were dealing with confidential matters – one of which was Members’ expenses. Apparently, it wasn’t long before the soldiers realised the extent and extravagance of MPs’ expenses and so glimpsed the comparative opulence and excesses of the politicians’ lifestyles. The very people who represented them and who had sent them abroad to be shot at. The sums of money involved in the claims that they either saw or were told about were further amplified by the fact that the soldiers were doing this extra work in order to buy decent boots and body protectors and other items which would make their soldiering duties easier and safer. It is currently very easy for us to feel very emotional when they hear stories such as this – but we should proceed with extreme caution because it now seems that the mole is trying to justify his actions in leaking the information. He appears to be telling us that he now feels vindicated because of the “poor” soldiers and because MPs have to-date returned over £500,000 in mis-claimed expenses. Planes bearing dead blown-to-bits soldiers, processions through Wootton Bassett and full-page photographs of a recently mutilated soldier paying his last respects to his blown-up dead buddy certainly do tug at the heart-strings. Great propaganda andimmaculatetimingbyourmole. Now the facts: The mole received £110,000 pounds from a right-wing paper. Currently each soldier receives Osprey lightweight body armour and£3500 – worth of state-of-the-art equipment – including boots and shoes. The mole’s motives for leaking the information would not be in question had he not accepted such a large amount of money – which one presumes has been donated to the Army Benevolent Fund. I am not a great supporter either of this Government or of the pointless shenanigans in Afghanistan but sometimes there are over-sugared pills which are just too difficult to swallow.
One question remains: Why were security men -serving soldiers or not- allowed to either view or be given confidential information.
China , India and Brazil are to play a more prominent part in G20 and will also have more IMF votes. Currently, China wields 3.7% of IMF votes compared with France’s 4.9%, although the Chinese economy is now 50% larger than that of France and in spite of the fact that China has over 20 Provinces which each has a population greater than that of France. This looks very much like the dawn of the Eastern or New economies and the inevitable sunset for the once all-powerful West. Regrettably, not only is it a question of size and manufacturing power but the West is currently “in hock” to China. Chinese and Indian savers enabled all of us to be borrowers. Now economists are saying that the East has to create the same free-spending and borrowing consumer society that we have enjoyed for so many years: just look where WE are now! Are we really so well-placed as to be dispensing economic advice?
Another New Labour piece of legislation which has been languishing in the long grass for a while is the changing or possibly the removal of the Statutory Retirement Age. It is a shame that there are ex-teachers, ex-managers, ex-engineers who happen to be over 65 and who are now either shelf-stacking, working at B&Q or watching Countdown. What a waste. The Government says that the matter will be dealt-with in 2010, in other words, by the Tories. Meanwhile, at least 300 over 65s are taking ex-employers to Tribunals and yet again, lawyers have become involved. That is New Labour’s one big success – through their intransigence and incompetence, they have produced the best-ever Lawyer Job-Creation Scheme. The Brits have always been obsessed with 65 being their time to stop work, relax, take long holidays etc. Unfortunately in many cases it’s retire, sit around for a bit, die. We are changing as a nation and it is not purely because of the recession or plundered company pension schemes that people wish to carry-on working. Our “retirement mentality” has gradually been disappearing and people genuinely WANT to work for as long as they can. OK, there are very physical jobs where at age 65, you’re clapped-out. For instance, building, mining or farming. You can punish your body to such an extent that by the time you are 50, you start looking forward to the day when you can stop. However, nowadays many of us are engaged in non-physical work which means that we SHOULD be as fit at 65 as we were at 45. Policies should not be driven by a Government with one eye on unemployment statistics because as usual, public opinion is against them. It’s now time for the Statutory Retirement Age to be abolished.
Iran is the world’s fourth-biggest oil producer. No wonder they need to make such a vast investment in nuclear energy. You never know! Or, could it be that the Mullahs want to produce nuclear warheads in order obliterate Israel and/or the USA. That’s not possible because the Koran says that Muslims want us all to be their chums. Here are three quotes directly from the Koran (or Quran if you know your Peking from your Beijing). Here goes: “O you who believe! do not take the Jews and the Christians for friends; they are friends of each other; and whoever amongst you takes them for a friend, then surely he is one of them; surely Allah does not guide the unjust people.” (5.51) or :“So when you meet in battle those who disbelieve, then smite the necks until when you have overcome them, then make (them) prisoners, and afterwards either set them free as a favor or let them ransom (themselves) until the war terminates.” (47.4) or “The punishment of those who wage war against Allah and His apostle and strive to make mischief in the land is only this, that they should be murdered or crucified or their hands and their feet should be cut off on opposite sides or they should be imprisoned; this shall be as a disgrace for them in this world, and in the hereafter they shall have a grievous chastisement” (5.33) As I said – nothing to worry about. They’re just misunderstood. Talk of fundametalist Muslims being a bunch of fanatical murdering misogynist psychos is very naughty. They want to love us – as we love them. It says so in the Quran. Let them build their nuclear power stations bombs. It’s for our own good. Just think about all that cheap electricity.
Nearly forgot: “O Prophet! urge the believers to war; if there are twenty patient ones of you they shall overcome two hundred, and if there are a hundred of you they shall overcome a thousand of those who disbelieve, because they are a people who do not understand.” (8.65)
The often misunderstood and misinterpreted thing which suggests that when a Muslim blows himself up for the cause , he will be rewarded in Paradise with 40 virgins to shag (presumably) -is wrong. Martyrs in Islam are classified as people who die for their religion whereas people who blow themselves up for women are dying for their own lusts. It’s Hell for them. Presumably you need to die with a hard-on. Not impossible – many men do, apparently.
These are Iran’s main Nuclear sites:
Thursday September 24th 2009
The Government has criticised the Football Association for not reforming itself. It has also asked the F.A to spend more time and resources on ethnics and women as well as telling them that they should provide better leadership. Perhaps when the F.A has completed its restructuring it can then give H.M Government a few tips. Talk about Pot-Kettle.
A recent U.S survey shows that many Americans think that Tony Blair is the British Prime Minister. Someone ought to tell them who the real UK Prime Minister is. Darth Mandelson.
Mandelson has been quoted as saying that Gordon Brown ought to “lighten up” a bit. Not THAT smile again PLEASE!!!! NOOOO!!!
What is it about meetings beginning with a “G”? Why is our expectation level do low? Is it because we know that the post-meeting statement has already been written? Is it because all previous meetings were such a monumental waste a waste of resources, time and money? Anyway – who DOES write that n-page statement which announces the next meeting in 6 months? Gordon Brown’s LAST such meeting.
Is it true that Obama snubbed Gordon Brown? Obama has had one-on-one meetings withotherleaders. Why not with our own Prime Minister? Is it because of the Megrahi affair or could it be because of the increasingly prominent sell-by date on Gordon Brown’s forehead?
Banks are currently reducing their assets and hoarding cash because of liquidity requirements. Put in simple terms, that means that the magic conjured-up money – the so-called Quantitative Easing is making it in through the banks’ back doors but the front doors remain only slightly ajar. READ REST OF ARTICLE
In 1998, the Saville Inquiry began its investigations into the shooting of 29 Civil Rights protesters by soldiers of the 1st Battalion of the British Parachute Regiment. Five protesters were shot in the back and two injured protesters were run down by Army vehicles. Fourteen people died. This was the Bloody Sunday Massacre which took place on 30th January 1972 in Derry. The original Widgery Tribunal concluded that the soldiers actions could be best described as “bordering on the reckless” . Unsurprisingly, the Widgery report was widely regarded as a whitewash. Hence the Saville Inquiry. Now we hear that the Saville Inquiry will report in March 2010!!! Apparently, there’s a printing issue that needs to be resolved. Once again , this 11-year inquiry brings into focus two great British institutions – queueing and inquiries. Not to mention a steady income for a whole “shark” of lawyers.
The anniversary of Lehman Brothers going down the toilet has passed anditisnowayearsincethesolidsreallyhitthe air-conditioning big time. For those who do not really understand finance – and who really does these days, here’s the deal. Politicians and bankers knew for at leat 18 months before the collapse that there was not enough cash in the system andthatmost, if not ALL banks were now standing on foundations of sand. It was only when Lehman had to admit that there was no real money – only paper ” instruments” which could be worth cash , that it was realised that the real currency that the banks had been dealing-in was bullshit and promises. Politicians are now beginning to strike heroic poses as they tell us how they saved the banking system and that they only-just managed to avert a financial Armageddon. The real fact is that they knew what was happening all along and lived in the HOPE that somehow (they did not know how), the financial system would self-adjust or self-regulate itself back to stability . It didn’t and the solution that is being applied today is exactly the same as that which caused the collapse. Imaginary money. Eighteen months ago, bankers and politicians were HOPING that the system would sort itself out and that is EXACTLY what they are hoping for today. What is really needed is a total restructuring of the banking system but there isn’t the global political will to make that first all-important move.
There’s a (denied) rumour that Gordon Brown is going blind. Obviously we all hope that he is not. In spite of the fact that he has all the leadership qualities of damp Kleenex, he is a decent man. The rumour that he is blind has obviously been started by someone who is confusing his eyesight with his policies and management style.
Wednesday September 23rd 2009
Apparently, there is a small but statistically significant rise in patient deaths when junior doctors start work in August. Perhaps the same survey should be done with slightly different parameters: Before pubs open and after closing time.
A friend sent me a cartoon yesterday which, for the first time, explained the constant Midde East conflict . Jewish man looking up at the sky saying, “Now, let me get this straight God. The Arabs get the oil and you want us to cut the end off our what….?”
This snippet explains better than anything the anonymous nature of the Liberals’ leader. Nick Clegg will be delivering the Leader’s rabble-rousing Conference for the THIRD time!! He will attempt to come cross as a TOUGH leader. Doesn’t compute, does it? He always looks as if he’s just taken a “NICE” pill.
Justin-lee Collins has said what many are thinking: Bruce Forsyth should have stopped TV presenting three or four years ago. There’s a touch of the Emperor’s New Clothes about the whole thing. So much so that no-one appears willing to say ” Brucie, you are now coming across as an old twat. Piss off”. Instead the poor old bugger is being patronised, allowed to be unfunny (obviously from the tumbleweed school of humour) and worst of all, he’s being referred-to as “sprightly”.An adjective every man dreads because it is THE word which signifies the beginning of the end. It is NOT a compliment. It means that you are past-it and when you attempt to tap dance avec embarrassing Sammy Davis Jr-esque gurning, you look like a swinging cadaver with a ferret up a wet trouser leg.
I have just discovered that Chas & Dave have split up. p.s. I am writing this on Beachy Head.
Kristna Rihanoff whose Strictly Come Dancing partner is Joe Calzaghe celebrated her birthday yesterday. Rumour has it that Joe and Kristina have grown very close. I wonder whether he had any difficuty in wrapping her present?
More meaningless military “sincero-talk”today. Acting Sergeant Michael Lockett was blown up by a roadside bomb in Helmand Province. “There’s now a gap in our ranks that will be so very difficult to fill” and “Sgt Lockett’s raw bravery and seflessness cost hm his life but undoubtedly saved that of one of his soldiers.” are just two more examples from the Army Book of Fine Words. Meaningless twaddle. Sgt Locketthas left behindastrickengirlfriend and three children aged eight, seven and five. “We take solace in the fact that he died doing a job he was born to do” was more puke-inducing bollocks – this time from his father. Stop this pseudo-heroic crap and bring ALL of our young soldiers back here to the United Kingdom, where they belong. The Taliban certainly do not see these young soldiers as heroes – more like fairground ducks.
When will the Vatican be called to account over the tens of thousands of children that have been abused by pervert priests? The Catholic Church has been accused at the United Nations Human Rights Council of a systematic and long-standing cover-up. The Vatican is in breach of its obligations under the United Nations Convention on the Rights of the Child. Handing out MILLIONS in compensation is really not the way forward. It’s customary to pay for sex up-front , not ten, twenty or thirty years after the event. Let us hope that one day there will be a time when the Vatican can close its child-abuse fund and get on with the business of religion.
Nothing about Gordon Brown today because he hasn’t said anything new or original. Situation normal.
Tuesday September 22nd 2009
Did you see Darth Mandelson being questioned on the subject of bankers’ bonuses last night? As Business Secretary, he has the power to stop the bankers in their tracks. But he cannot and he would not answer any bonus-related questions.
General Stanley McChrystal, the top US commander in Afghanistan has warned that the war there could be lost unless there is an increase in troops within a year. He is asking for an additional 30,000 troops. This is truly developing into another Vietnam. Currently, there are 100,000 troops in Afghanistan, 62,000 of whom are American. Time to talk.
The United Kingdom is needlessly wasting resources by sending too many average and some downright thick students to University. In fact, there are too many Universities. Hence the current funding crisis. The solution is so simple that even an Education Minister ought to be able to work it out.
The worldwide recession and the resulting drop in consumer demand has had a profound effect on industrial production. That has had an unexpectedly welcome effect on greenhouse gas emission – it has fallen by over 40%. Perhaps the Global Warming Mullahs will take this opportunity to shut up.
Anish Kapoor, the 1991 Turner Prize winner has a solo exhibtion the Royal Academy. This event is unusual because Anish lacks the traditional qualification for such a exhibition. He isn’t dead. If you enjoy abstract sculpture and/or you like spouting pretentious arty bollocks, then this exhibition is for you. Here’s a nosegay from Anish himself: “That sense of the poem being put together as word objects relates to sculpture in a very fundamental way. Sculpture also has this ability to be what it isn’t. It’s kind of about the illusory and the real.”Quite. Anish is very keen on vaginas so do look out for the odd wobbly red letterbox shape.
The media seem surprised that construction companies and builders have been ripping-off Local Authorities and other organisations which are spending other peoples’ money. It’s been going on for years. This is from April 2008 – CLICK HERE– and it includes a scene from the Coconut Club, which you will be hearing more and more about over the next few weeks.
This week is Climate Week – a crucial week in the quest for a global climate deal. World leaders are meeting at the UN in New York and a G20 summit in Pittsburgh. Meetings such as this have been going on for a few years now so let us hope that the current series of meetings produces something that has been sadly missing from previous encounters. Action. In December the Copenhagen environmental conference will hopefully be the real turning point and turn meetings into agreements into action.
Global Warming: Predictions are made using computer models and although the general consensus is that Global Warming is occurring, there are scientists (the so-called “deniers”) who have alternative models which suggest that the Earth will cool before its becomes hotter. Regrettably, the religious-like aspects of Global Warming, treat scientists who deny Global Warming as heretics who are often lampooned andmarginalisedby both the scientific and political communities. The latest of these is a Professor Mojib Latif, from the Leibniz Institute of Marine Sciences at Kiel, who has suggested that the long-term warming trend could be masked – perhaps for as long as 10 or 20 years – by a temporary cooling caused by natural fluctuations in currents and temperatures called the NorthAtlanticOscillation. It all seems to depend on which set of data is plugged into which computer model. However, it is the politicians who are the true believers who only appear to read data which supports their dogma.
Helen Goddard , music teacher has been jailed for 15-months as the result of a lesbian affair with a 15-year-old pupil. How modern. Not nice – but definitely “of the age”.
Rumour has it that Louis Walsh, the Irish spud and pop manager from the X-factor is going under the knife in order to improve his looks. There must be a long queue of knife-sharpening volunteers. Surprising that he hasn’t yet benefited from sitting so close to that pair of BotoxedBookends – Simon Cowell and Danni Minogue – by osmosis.
Sir Bobby Robson’s Memorial service must have been an ordeal for Paul Gascoigne. There was only one photo of Gazza that the snappers wanted – and they got it.
This is the sort of medical research that we like: If you have alcohol in your bloodstream, you are far less likely to die from a head injury, says Dr Ali Salim from Los Angeles. The findings are based on a 5-year study of 38,000 people. You can’t be too careful. Cheers.
Nothing in the Press about Jordan today. Max Clifford must be on a long weekend break.
Attorney-General Baroness Scotland is still facing an uncertain future. Gordon Brown, her boss is being his usual decisive self. This is what he said this morning: “We will have to find out what has actually happened and I will have to wait for that report this morning and she will want to answer the questions that are put to her. We will have to make decisions.” Brown obviously has not been watching the news or reading his Daily Worker. The fact is that Baroness Scotland employed someone who did not have authorisation to work in the United Kingdom. In fact, her papers expired five years ago. As usual, the long grass is quivering in anticipation.
Monday September 21st 2009
It now appears that Womens World 800m champion Caster Semenya was tested ages ago and there has been concern over her sex for months. The issue did not suddenly materialise at the last Word Championships. The whole thing has been handed so badly that there is every likelihood of IAAF resignations.
Baroness Scotland will probably resign this week. If every politician who made a mistake resigned, Westminster would be empty by now.
It looks as if Megrahi is going to be the first criminal to be retried on the Internet. We’re still awating an intervention from God and the miracle recovery. There has been one previous miraculous recovery by a convicted criminal. Ernest Saunders (1980s Guinness Scandal) was freed by a judge because he was suffering from Alzheimer’s. So far, Ernest Saunders in the first and only recorded case of a total recovery from Alzheimer’s. The recovery took place soon after he was released from jail. Speaking of miraculous recoveries – Ronnie “released on compassionate grounds” Biggs has been seen out and about on his mobility scooter. Megrahi or Biggs? I’m off to Ladbrokes to make a small investment.
The Liberals are having their occasional rush of blood and putting themselves forward as a party of government. Remember David Steel in 1981? “Go back to your constituencies and prepare for government.” Forget it boys and girls. There’s Vince Cable and Norman Baker and after that it all becomes a bit anonymous. Nick who?
The Liberals want to tax home owners whose properyis worth in excess of a million. They will be the only Party whose policies will be derailed by a property crash andonthatbasisalone, this policy has the depth and solidity of a closing-time back-of-a-beermat “I really lovvve you” concept. They’re not sponsored by the Royal Institution of Chartered Surveyors, are they? This new policy is the Liberals’ biggest-ever lurch to the left. The sort of thing that New Labour would have done when they were Proper Labour.
The elephant in the room – the one that no-one is talking about is still there. I am of course referring to the economy.
Several big companies, including a couple of large builders as well as the Royal Bank of Scotland will be coming to market very soon to raise many billions. Watch those share prices. Here we go again.
Have you noticed how Kerry Katona’s nose is looking more and more like Danniella Westbrook’s last nose-but-one?
The Education bods are gettinng a bit twitchy at Ed Balls’ suggestions of swingeing cuts in Education. It is the designer-suited BMW-driving “advisers” at County Hall who should think twice before renewing their gym membership or booking that holiday in Tuscany. CLICK HERE
I did not see Alesha Dixon’s debut on Strictly Whatsit but it sounds as if she had a list of pre-prepared crap written down, dispensed it quite randomly and personalised it by adding bad grammar.
Rules are being published this week which will exempt family and friends from being prosecuted after assisting in a suicide. It is purely coincidental that these rules are being rushed through just before Gordon Brown’s conference speech.
Manchester City manger Mark Hughes is complaining that too much time was added on at the endofyesterday’sderbygame with Mancheser United. Michael Owen scored Man Utd’s winning goal in he 97th minute. Hughes forgets that his team had the identical extra time in which to score.
Monday September 7th 2009-Friday September 18th 2009
Friday September 18th 2009
- There has been some concern that Romell Broom may have suffered mental anguish when two Ohio State officials failed to find a vein in order to deliver a fatal injection. According to Broom’s lawyer, Broom had suffered both “mental and physical injuries” and apparently became distressed and appeared to cry. Broom was convicted of raping and then killing a 14 year-old girl.
- We’re too fat, we drink too much alcohol, we’re unfit, we ingest female hormones in our meat and weedkillers from our vegetables and we’re too stressed. Paradoxically, our life expectancy is increasing.
Alistair Darling is engaged in a series of meetings in order to decide where spending cuts can be made. If you’re expecting decisions within the next few months – stop being so silly. Although professional pundits do now have the opportunity to make pointless predictions.
Andy Burnham is suggesting yet more NHS changes. The God of Change strikes again! This month’s idea is that we will all be able to choose our GP. I would like one that’s qualified, understands human anatomy and is sober.
Baroness Scotland should know that in a Court of Law, ignorance is no defence. Mind you, the Baroness is the Attorney General. Hopefully, hiring someone called Loloahi Tapui(clue!) with out-of-date papers was just an oversight and as such, does not generate a witch-hunt. Oh yes – there’s an enquiry. There’s always a feckin’ enquiry.
Suddenly, Jordan doesn’t want to talk about “the rape”. It seems that her PR people are running out of interesting stories. The only remaining possbilities are either ” I was abused as a child” or “I was abducted by aliens”.
Bit of a “to-do” about unofficial sperm donors. Apparently, ladies can contact a sperm donor on-line, arrange a meeting and either be handed a container-full of the stuff or on occasion have it delivered direct through the medium of sex. Hence the phrase : “”Bottled or draught?” Sounds like an excellent service as well as an interesting career move, although it could mess-up the old CV, especially if the CV is printed on a sheet of Kleenex. Just realised that if this type of work is a career, the phrase “hand job” begins to make sense.
How would the management at Student Loans UK feel if they were told that because of administrative incompetence, their September salaries will be paid at the end of October. They would probably be quite upset. Next question: How do young kids with the incredible stress associated with leaving home feel-when they’re told by Student Loans UK that their University grants will be paid “about” four weeks late? Why is the beginning of the academic year ALWAYS a surprise? For the record and to help Student Loans UK: The next academic year will be starting in October 2010. Hopefully, that’s enough notice.
Scientists at Newcastle University have produced human sperm in the laboratory. Didn’t know that there was a shortage. Just take a chipping hammer to any Confessional carpet.
Gordon Brown said today “Cooperation between nations at the G20 summit will be crucial to ensure global economic recovery” That is probably the twentieth version of the same sentence . It is a truism and it’s boring. Here’s another sentence which I hope Gordon finds as interesting as his own deep thoughts: ” The sun is in the sky”
Here is a quote from this evening’s No 10 bulletin: “The Prime Minister is launching a brand new podcast series this week talking directly to you about the big issues of the day. The podcasts, which will be available on our iTunes channel andonYouTube, will be recorded at Downing Street or around the world when the Prime Minister is travelling.” Wow! That Gordon Brown is so “street” -using that Interwebthingytoconnectwith the YouTube dudes. Way to go, MC Gordo! Soon, he’ll be buying a pair of those really cool Levi Strauss blue denim casual trousers with the turn-ups, copper rivets and the little red label. Sound! Should go well with the black brogues.
Remember what I told you about the American dollar going into freefall. Soon. Read More
The Phony Economy
The approximate position of the British Economy
One of the great questions of our age is “Have the billions handed over to the banks had any affect on the economy?”
Some say “YES”, some say “NO” and others say ” IT’S TOO EARLY TO TELL”
Currently , we appear to be living through what can only be described as a Phony Economy. The Footsie looks much healthier and there is sort of “whistle in the dark” pretend-confidence in the markets. Pundits are talking-up the markets, politicians are beginning to make soothing noises some are even daring to think about non-economics-related topics. It’s all very disconcerting. Read More
Mervyn’s Tea Party
Monetary Policy Committee
David Blanchflower sits on the pointless Bank of England Monetary Policy Committee.
The MPC is supposed to be acting and thinking independently but it always seems that whatever they say has been sanitised so as not to upset the neighbours.
David Blanchflower says that in his opinion, two million people will be out of work by the end of the year.
That’s more like it! We need some realism. We need truth and not the platitudinous crap that Merv and his chums keep dishing out.
Blanchflower goes on to say that the MPC seems misguided in sitting there and worrying about inflation when the whole economy is in imminent danger of collapse.
He also says, quite rightly that the BoE’s forecast of “broadly flat” economic growth has a great deal of wishful thinking attached to it.
He also thinks that there will be a fall in property prices in excess of 30%. Bravo! Tell it how it is and how it is going to be!
The very worst that could happen at the next MPC meeting is that Mervyn might splash soup on his silk tie but otherwise, whatever they decide will be irrelevant.
As we have said many times before, they should be making things happen but sadly it looks as if the are simply wondering what happened.
See what Spygun wrote on 15th May 2008
Mervyn’s little pump
” Mervyn King”
Mervyn King and his band of funsters at the Bank of England are attending their irrelevant monthly monetary policy “dither” committee again. Why “irrelevant”? Because it is the British Bankers Association ( known collectively as the Wunch”) that decides consumer interest rates. Any change in the Bank Base Rate is irrelevant because the only direction that the BBA will alter the rate in today’s climate is upwards.
The balloon of inflation has two pumps sticking in it.
The first is our own little pump which inflates and deflates the balloon through price and interest rate variations. This is the pump that Mervyn and his gang have a bit of control over when they are in the mood to get their hands dirty. (They spend three hours deciding whether or not to sit on the fence).
The bigger pump (by far) which has been growing over the last few years and has recently started inflating the balloon at a great rate of knots is totally out of Mervyn’s (and the Government’s ) control. This is the massive steel stirrup pump of world commodity prices. Control of that pump is in the hands of organisations such as OPEC, Governments such as Russia and the USA and individuals such as commodity traders and speculators.
Mervyn’s little plastic bike pump is fast becoming an irrelevance but I am sure that today after their game of bullshit tennis, they will have a good lunch before Mervyn settles down at his battered old Remington and types “the letter” to Gordon Brown.
Sorry mate but you know that 2% inflation nonsense that you used to bang on about? I think that it’s time to stick a “one” in front of the “two” because that’s where we really are.
The good news is that the high figure does not apply to individuals who purchase a 42″ plasma TV every month.
p.s. Sorry about the red ink. That’s all we use these days.
British economists are divided (?!) – depending whether they base their calculations on Keynesian Theory or the (currently favoured) back of a Marlborough packet.
In spite of the fact that they all rely on what is essentially the same computer model – half say that the rates should come down and the rest say that they should either stay at 5% or be increased.
Here’s a wake-up call boys: It doesn’t matter.
When you have oil and commodity prices swinging by between 10% and 60%, a small 0.25% tinker with the BBR is not going to amount to anything at all.
It would be like John Prescott chipping an ice cube off the iceberg that sank the Titanic. Or as it is known nowadays – New Labour.
Spygun predicts zero action from Merv and the boys (and girls). Rates to remain at 5%.
Le Crunch and Hedge-cutting
The primary driver behind the financial Chernobyl that we are currently experiencing is promiscuous lending by irresponsible mortgage “securitisers”.
The term Credit Crunch has been on our lips for several months now but it has joined phrases such as ” learning curve” , ” hedge fund” and “police intelligence” : phrases which we like the sound of but have no real idea what they mean.
Most of us survived the crash of 1987 and since then, Governments all over the world have become very adept at bailing out financial institutions and corporations by means of subsidised credit, warm words and as we have seen with Northern Rock – panic bailouts. The mere whispher of “Credit Crunch” instills blind panic – especially in politicians.
This is how a Credit Crunch works. Firstly, there is a shortage of money and the banks begin to run out of hard cash. Secondly, as a result , credit dries up. Thirdly, a recession takes place and inflation cools. If you think about it – it is bound to cool – unless other unforeseen events conspire to upset the economists’ models.
However, in a Global Economy a Credit Crunch can lose some of its crunchiness because there is always money to be found somewhere. It is unusual NOT to be able to find money and until recently, you were able to buy-in money from somewhere in the world.
It would cost you but the money was there. Unfortunately, several credit disasters soon put paid even to that.
Even those beacons of turbo-charged capitalism, the Hedge Funds are suffering. Here’s a quote from one:
“Current market volatility and lack of market liquidity with respect to subprime lending markets have caused adverse conditions with respect to the liquidity and market-risk exposures on the company’s underlying portfolio of investments.”
“We are in the shit because we cannot find any cheap money to buy any more dodgy investments and so we will have to rely on emergency funding which is expensive and we will also have to sell off some assets. That means that we’re not going to have much of a profit this year.”
There is a God!
Here in the UK, as well as the USA the situation has been complicated by two opposing forces which are muddying the picture and giving both politicians and economists a head pain:
The collapse in the property market is deflationary, whereas the rises in fuel and food costs are inflationary.
Logically, if you take a long-enough time line, exceptional scenarios such as the current one are BOUND to occur from time-to-time.
The fan is being hit from all directions.
Economists all over the world panic because they still do not realise that the whole system is self-adjusting and like 1987, will soon become a mere blip on a chart .
The first thing that will happen is that OPEC will open the oil tap to “MAX” and everyone will fell a bit happier.
In years to come, reminiscent of the Normandy veterans of WW2 ; bankers, traders and economists will go all misty-eyed as they sit round the patio-heater and recount the camaraderie and individual acts of gallantry during the “troubles” of 2008-2010. By then, these hard days will be remembered as but a fleeting moment when a large cloud temporarily blotted out the sun .
95% of the world has bought into democratic capitalism as the way forward. This current crunch will test the ideology and durability of the world’s political and economic will. Capitalism is not a stable entity and by its very nature will bite occasionally.
We are all now all riding the tiger. Currently, the tiger is unhappy and hungry.
Best not to climb off just yet.
CRUNCH BANKS COIN IT.
Banks will unveil billions of pounds in profits next week, while their cash-strapped customers battle with the credit crunch.
The banking giants are raking in up to £350 every SECOND in profit- more than a MILLION pounds an hour, according to analysts.
The eye-watering sums prove hard-up Brits are shouldering the cost of the credit crunch, as greedy banks protect their profit margins by hiking up interest.
David Kuo of money website Fool.co.uk said: “The one thing that banks are good at is making money. After all it’s dead easy to make money when you already have lots to begin with. With the credit crunch, banks can’t easily lend more cash, so they are charging more for what they do lend.
“They are they are hiking the cost of mortgages, credit cards and loans to try to sort out their balance sheets.”
HSBC is expected to win the income war by revealing profits of £5.5 BILLION in the first six months of the year- or £350 every second.
And next week Royal Bank of Scotland group, which includes NatWest is expected to report profits of £3.68 BILLION, or £234 a second.
Lloyds is predicted to notch up a £1.9 BILLION surplus, which is more than £10 million a day, or £120 every second.
And HBOS – which includes the Halifax and Bank of Scotland – is expected to reveal profits of £1.78 BILLION. That’s 9.76 million every day, or £113 every second.
Reproduced by kind permission of SOPHY RIDGE – News of the World
Answer: “A Wunch.”
Yesterday, the Chancellor was snubbed by the bankers.
Several of the biggest players in the banking system were invited to come along an talk to the Chancellor about how they were going to help the poor borrowers who are unable to repay their mortgages.
Would he manage to persuade them to lower their interest rates or maybe tell them to be gentle with borrowers in arrears and not throw them out of their homes?
When the meeting finished, the follow-up publicity from the Treasury PR machine was very muted. It was muted because effectively, the Chancellor had been told to bugger off.
The banking fat-cats are untouchable plus Alistair Darling had made a very basic negotiating error. He had already asked the Bank of England to arrange a £50 billion handout and then expected something in return. What he should have done is to have had the meeting with some sort of “ace in the hole”. For instance:
” Listen guys – you lower the rates, give the “genuine hardship” mortgage borrowers a short payment holiday and I shall arrange to bail you out and promise to pay off your collective gambling debts.”
Instead, this former Edinburgh Solicitor, up against some of the biggest sharks in commerce gave them the help that they needed and then thought that he could appeal to their good nature. It was a no-contest.
The wunch knew that the Government could not afford another U-turn so they went into the meeting with the Chancellor knowing full well that he would not risk the threat of withdrawing BoE support. They had him by the shorts.
Mr Darling was told it will take ‘quite some time’ for the BoE rescue package to make a difference.
and ‘For now, mortgage pricing will remain high. If anything, it will increase in the short term.’
The ‘stubbornly high’ cost of raising money in the money markets was blamed.
This was from the guys who make the money markets.
Let’s get one thing straight – LIBOR is the London Inter Bank Offered rate and is the rate at which the Banks borrow money from each other. The rate is set by the British Bankers Association. It is a rate which is controlled by the banks and could be changed at any time. Once again, they have stitched-up the Chancellor.
Alistair Darling said he hoped that lenders would ‘continue to take their responsibilities towards customers seriously’.
While Alistair is “hoping”, the fat-cat banker is lighting up another Monte Cristo as the houseboy counts the bonus. The banker is not thinking how he can help Mr “In the Shit” Borrower. He has far more important things on his mind. Those share options are not looking as attractive as they did a few months ago. Perhaps he should wait before cashing them. After all , once this free gift from the BoE takes effect, the share price should rise quite nicely……….