Spygun Snapshots for 20 June, 2013
8:25 am GLOBAL WARMING: We should always question and be suspicious of ANY belief system which is over-reliant on consensus rather than evidence. Consensus-building is a socio-political and not a scientific process. The alarmist global-warning "faith" is a fine example of the phenomenon. Having said that, the so-called "scientific evidence" can also be flawed. You may not realise it but even the "peer review" process of scientific papers is subject to consensus. It too is subjective and on many occasions...selective. In the same way that consensus is built on selectivity, there are still occasions when scientific results which do not follow the "mainstream" can be ignored and buried. (DISCLAIMER: Other consensus-driven belief systems and faiths are available!)
I have pointed out on several occasions that many of our politicians but specifically our Prime Minister, David Cameron have fallen into the habit of using a new kind of language. It purports to be all about ACTION, delivered in extremely weird exhortary terms which give the (false) impression of achievement and initiative. It is anything but.
Here is the transcript of the so-called Lough Erne Declaration on tax evasion. There are no dates, no specific responsibilities and certainly no action points. In short….it says NOTHING.
I have highlighted the ”SHOULD” word, which the Coalition Government and its leaders continue to confuse with action or “WE WILL”.
(The first paragraph is just full of “truisms”…..what some might call BS :
The Lough Erne Declaration 18th June 2013
“Private enterprise drives growth, reduces poverty, and creates jobs and prosperity for people around the world. Governments have a special responsibility to make proper rules and promote good governance. Fair taxes, increased transparency and open trade are vital drivers of this. We will make a real difference by doing the following:
- Tax authorities across the world should automatically share information to fight the scourge of tax evasion.
- Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.
- Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.
- Developing countries should have the information and capacity to collect the taxes owed them – and other countries have a duty to help them.
- Extractive companies should report payments to all governments – and governments should publish income from such companies.
- Minerals should be sourced legitimately, not plundered from conflict zones.
- Land transactions should be transparent, respecting the property rights of local communities.
- Governments should roll back protectionism and agree new trade deals that boost jobs and growth worldwide.
- Governments should cut wasteful bureaucracy at borders and make it easier and quicker to move goods between developing countries.
- Governments should publish information on laws, budgets, spending, national statistics, elections and government contracts in a way that is easy to read and re-use, so that citizens can hold them to account.”
A WISH LIST disguised as an ACTION LIST.
Spygun Snapshots for 14 June, 2013
7:11 am From the Office for National Statistics: Between February and April 2013 , unemployment fell by 5,000 to 2.51 million (7.8% of the workforce). The number of people in employment rose by 24,000 to 29.76 million (71.5 % of the workforce) the highest since records began. (They omitted to mention that the population is also the highest since records began in 1971) ............ BTW, if the number of "people in employment" is 71.5% of the workforce, doesn't that leave 29.5% of the workforce NOT in employment? We remain confused by government arithmetic.
By CHARLES FORELLE and MARCUS WALKER
The recent turbulence rattling global bond markets is unmasking an unpleasant notion in Europe: The eurozone’s problems aren’t solved.
Government bonds have recently taken a hit around the world, now that investors are preparing for the possible end of central banks’ boundless economic stimulus. And those bonds of the weakest euro-zone countries have shown some of the biggest drops.
That suggests that the bonds of Spain, Italy, Portugal and Greece might be susceptible to bigger swings in the future, as the flood of cash that has poured into financial markets recedes, leaving their economic warts more exposed, market participants say.
Thanks to the European Central Bank’s pledge to support markets—and to the ocean of cash from central banks—those bonds saw extraordinary rallies for the better part of a year. But in recent weeks, the course has shifted somewhat.
Yields on the 10-year Greek bond, which had strengthened remarkably since last summer, ended Thursday at 10.03%. That is two percentage points higher than where they stood on May 22, when the U.S. Federal Reserve signaled its giant bond-buying program might slow this year. At 6.47%, the Portuguese 10-year is more than one percentage point above its May low. Bond yields rise when their prices fall.
The 10-year Spanish bond, which was near 4% in early May, closed Thursday at 4.61%, flat on the day. The Italian 10-year, a hair stronger Thursday at 4.35%, also is off over the month. The spread—or the amount of additional yield investors demand, above that paid by benchmark Germany—also has risen for both countries over the period.
To a degree, the rising yields reflect the same tidal forces that once pulled them down: Easy money drew investors to those bonds; its possible end pushes them away. The rally was “more technical than fundamental,” says Carl Norrey, head of European rates securities at J.P. Morgan in London. “I can’t help but respect it, but I don’t see how Europe gets out of the crisis this easily.”
Behind the problem is a macroeconomic euro-zone picture that has deteriorated, not improved, during the period of falling yields.
“The liquidity dynamic is unfavorable, and you have to frame that in the context of these markets having extreme social, economic and political risk,” says Gregor Macintosh, head of global sovereign debt at Lombard Odier Investment Managers in Geneva, which has $42 billion in assets under management.
Mr. Macintosh has been paring his exposure to Europe’s weaker countries over the past month. “The reality is that the underlying fundamental situation is still gravely worrying in these countries,” he says. “In a crux, you have to be nimble.”
To be sure, the rally in weak-country bonds has been impressive, despite the slide of the past month. Last summer, Spain and Italy were facing a dire situation: so little demand for their bonds that they risked needing to turn to their euro-zone peers for help. The euro zone isn’t in that situation today, and the ECB’s summer pledge to step into markets if needed remains potent. The euro zone’s politics are still thorny—Germany holds elections in the fall, which have stirred up anti-euro sentiment—but the bloc’s crisis management is improved.
“German elections aside, things are far less bad than they’ve looked for some time,” says Bill Street, head of investments for Europe, the Middle East and Africa at asset manager State Street. He points to signs that trade imbalances are righting themselves and a possible plateau in the euro zone’s lofty unemployment rates. The debt of a weaker euro-zone country, with its extra yield, he says, “still holds a place in a diversified portfolio.”
But economic pressures, especially gross domestic product that has fallen faster than expected, have heightened concerns about the countries’ debt burdens. Debt that grows too fast, relative to the economy, is the principal risk for most of Europe’s weaker states—and for their bond investors.
“With Spain and Portugal, if you look at debt-sustainability models, you are going to need much higher growth,” Mr. Street says.
Italy, Portugal and Greece all have especially high ratios of debt to GDP. Spain, which began the crisis as a low-debt country, is on its way to being a high-debt one. By next year, Italy’s debt-to-GDP ratio will reach 132%, while Spain’s will hit 97%, according to the European Commission. That compares with 127% and 84% in 2012.
Arresting the rise is exceptionally hard in a shrinking economy, and European authorities have begun to reckon with this by slowing the pace of fiscal cuts, in the hopes of supporting economic growth.
But a larger problem may be looming: In order to restore their economic viability, weaker countries must improve their industries’ competitiveness by pushing down wages and other costs, relative to Germany and other northern countries. But the German economy appears to have settled into a pattern of low growth and low inflation.
That means Italy, Spain and the others need more of this so-called internal devaluation. And devaluation makes it harder to pay down debt.
Spain and Italy “need prices to rise less rapidly than in Germany to rebuild competitiveness, but they need a measure of inflation to ensure debt sustainability,” says Simon Tilford, chief economist at the Center for European Reform, a nonpartisan London think tank. “Something has to give.”
Many economists say the solution will have to take the form of higher demand and inflation in Germany, large-scale debt restructuring in southern Europe, or sharing debts at the European level. But the euro zone’s creditor countries reject all of those options, leaving no clear way out of the debt crisis.
A version of this article appeared June 14, 2013, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: “Rising Bond Yields Rekindle Euro Fears.”
Spygun Snapshots for 13 June, 2013
Usually an organisation the size and scope of RBS has a few things in place which lesser companies do not. One of those is Succession Planning.
Yesterday’s announcement of Hester’s departure suggests that whoever made the decision for him to quit, made the decision in a hurry, with no backup plan in place. That clearly points to a sudden and very serious difference of opinion between Hester and Osborne. So, the question of whether Hester jumped or whether he was pushed (clutching a very substantial parachute!) is largely irrelevant.
However, we do know that just a couple of weeks ago the RBS Chief Executive was talking as if he would be steering RBS back to private ownership …..so what has suddenly happened? What is the root cause of his sudden exit?
The root cause is the same one which is motivating politicians to bully Google (and others) into paying imaginary tax debts.
The Treasury and Chancellor Gideon are desperate for revenue.
Hester would have told Chancellor Gideon that RBS is not yet ready to be “flogged-off ” merely to produce much-needed cash, (in an immediate Wonga Payday Loan sort of way) for the Treasury’s empty coffers…….. or Google (which continues to act perfectly legally) being told by politicians that it becomes liable for tax “at point of sale”.
The upshot is that the Chancellor will appoint a “yes-man” to sell RBS – probably at the bottom of the market and Google will continue to argue quite correctly, that its primary responsibility is to its shareholders and NOT to an increasingly desperate, discredited and panicked Chancellor presiding over a destitute Treasury.
“Britain is open for business”?
Don’t make me laugh!
Spygun Snapshots for 12 June, 2013
3:36 pm The Prime Minister told Parliament today: "We should use the G8 to try and bring pressure on all sides to bring about ... a peace conference, a peace process, and a move towards a transitional government in Syria." (Notice the use of the word "SHOULD"............ He never says "We WILL" plus, he is going to "TRY".)......Still, it makes a change from his favourite: "MUST!".....Here are some more fine examples of the art: http://www.spygun.com/richard-ruzyllo/the-mess-we-were-left-yawn
It is frustrating that we are ruled by a generation of politicians who obviously do NOT understand the basic principles of driving their countries forward because they cannot find the controls! Until they either learn or are replaced, whole economies are destined to remain in the doldrums.
We need a powerful new narrative – one that motivates us – not the dry “utilitarian” politically-guarded statements of the current crop of politicians.
So what should a motivating narrative focus on?
It certainly should NOT be about austerity, cost-cutting, job creation, creating profit or economic competition.
The New Narrative ought to be about creating value, realising potential and unlocking talent. It ought to be about Inclusion, Innovation and Inspiration.
Unfortunately, those very special political skills are extinct – driven out and killed by the study of history and balance sheets rather than embracing and understanding the human condition.
A good company boss will not motivate his staff to achieve by talking about the company profits or exports. He will address the hopes and fears of the individual.
The trick is to allow the individual to “see” himself taking charge of his or her life and understanding their place and opportunities in the (his) New Society. So what should be the starting point?
Political empowerment and economic (and social) opportunities stem from the same base – the spread of knowledge. Real knowledge – another aspect of our lives which has been atrophying for the last couple of generations.
Unfortunately, we are still living and being governed by the conventions, behaviours and organisations which we inherited from industrial society.
Nowadays, attitudes are very different but we even persist, for instance, in organising our commerce and public life around a several hundred year-old military model with ranks, officers and “privates”.
In the last few years, we have consciously moved even further backwards by being governed by those “Sons of Generals” who are rapidly showing themselves to be totally incapable of any empathy with the majority of the population.
The rise of UKIP and especially Nigel Farage is clearly demonstrating what happens when the “plebs” are unhappy with their lot. They search for a new direction and a new Messiah. It’s a civilised revolution!
If there’s no leadership, plebs tend to create or seek their own new leadership. An “Organisation within the Organisation” develops with increasing levels of dissent – then there’s trouble. Don’t believe me? Have a look at the Middle East or Syria……and now, the new fast-developing “organisation” in Turkey.
In the UK, the “Organisation within the Organisation” is UKIP. It began as no more than a “grain of sand” within the Tory Party. Now, it has its own rules, customs, myths, rituals, doctrine, morality and distinct community. It even worships and follows its own Prophet!
The solution to all this is comparatively simple to understand but somewhat more difficult to implement.
We should develop a culture which encourages entrepreneurship, innovation, risk-taking and diversity, within a cosmopolitan and liberal community. But all this to be within the cocoon of public institutions (by “public”, I mean belonging to everyone) which provide the infrastructure of culture, education and welfare, designed to nurture, protect and empower.
Our present government has perceived a glimmer of what needs to be done. Hence “We’re in this together”, Enterprise Zones, The Big Society etc. but it has shown itself totally incapable of delivering such a massive project.
So, we continue to live in an “old-school” (and ageing) society built on industry, labour and capital and it is NOT working (in ALL senses of the word!).
The New Society should be built on knowledge, inclusion , meritocracy and radicalism.
All we need now is the catalyst.
Meanwhile, beware of false prophets…or if you’re a banker…beware of false profits.
We know that (at least) the USA’s NSA (National Security Agency) has direct access to the PRISM companies’ servers. Above is what used to be a secret slide which describes its intent very clearly.
But what is PRISM – apart from its obvious connotations to spying, terrorism or Ian Fleming’s SPECTRE!?
It is the codename for a US government surveillance programme and has been in existence since 2007 . Its purpose is to monitor foreign communications which pass through US computer servers.
There has already been a lot of debate about the existence of this proactive programme designed to spy – and not only on possible terrorist or criminal targets. The scope of PRISM is far greater because to identify the bad guys, it is inevitable that the government also has to snoop on the good guys. Why? Because the bad guys don’t only communicate with other bad guys so it is inevitable that perfectly innocent messages and site visits are monitored- but that it not the most serious issue.
The most frightening issue is that a government has given itself powers and IT IS NOT WITHIN A GOVERNMENT’S MANDATE TO GIVE ITSELF POWERS.
Any democratic government’s powers must come from the people. Unfortunately, on this occasion, we are too late and the seeds of tyranny have already been planted.
This genie is well-and-truly out of the bottle!
The “terrorism” excuse has previously only been used in order to excuse illegal invasion, destruction or state-sanctioned assassination. But, because we have now become totally conditioned into believing the “as long as the word ‘terrorism’ is in the sentence, it’s for your own good” excuse, we all have the status of potential terrorists.
Make no mistake, this is no “one-off”. Here is a list of what is under surveillance (and don’t forget – it is indiscriminate).
Audio and video chats, photographs, e-mails, documents, and connection logs… Skype can be monitored for audio when one end of the call is a conventional telephone, and for any combination of “audio, video, chat, and file transfers” when Skype users connect by computer alone. Google’s offerings include Gmail, voice and video chat, Google Drive files, photo libraries, and live surveillance of search terms.
So the next time you are considering an intimate SKYPE “one-on-one” with your boyfriend, girlfriend (or both!)…..think! There could be a government operative at Langle, Beijing, the Kremlin or GCHQ watching (purely for “terrorist” and “for your own good” reasons, of course!).
Finally, PRISM’s first collaborator was Microsoft – way back in 2007. Here’s another slide showing the timeline of when the others came aboard.
Spygun Snapshots for 8 June, 2013
7:39 am As I predicted two years ago, recession has reached the core countries of the Eurozone. It was inevitable and didn't require Keynes , Hayek or Friedman....just simple arithmetic. The other inevitability was the over-reliance on virtual money once there wasn't enough proper trade-earned money to go round. Question: Would Eurozone states be as happy to remain members, if the Euro was called the German Mark? This self-perpetuating con trick cannot continue indefinitely.
Spygun Snapshots for 7 June, 2013
7:06 am EUROPEAN UNION: No! No! No! THAT'S IT!! ENOUGH!! The British Bankers' Association, through negligence and the FSA, through incompetence, cocked up LIBOR but THERE SHOULD BE NO WAY that we hand over LIBOR administration to some faceless Euro wonk! http://reut.rs/19M1gLW Apologies to all you well-meaning Europhiles but we need to dump those Euro losers ASAP!
Spygun Snapshots for 6 June, 2013
2:24 pm What do we expect from a leader? We want to see and feel an uplifting El Dorado vision of what our society could become! Just a tantalising glimpse of the New Atlantis would do! Not another serving of the Dystopian morass of negativity we have become conditioned to. What grand vision have we been warmed with today? What was the Labour leader's impassioned call to arms? Here it is: "We intend to cap Welfare Benefits".
7:06 am Finland slipped into a recession in the three months to March. It is the latest member of the Eurozone to succumb to the currency area’s longest postwar contraction that appears set to continue. Finland is regarded by economists as a member of the euro zone’s stronger “core”.
By PAN PYLAS
LONDON (AP) – Several economic figures for the 17 EU countries that use the euro all showed the same thing Wednesday – there’s no sign of a recovery from recession.
Eurostat, the European Union’s statistics office, confirmed that the eurozone’s economy as a whole shrank 0.2 percent in the first quarter of the year from the previous three-month period, with most sectors declining. Both companies and consumers have shown little willingness to invest and spend as they struggle with high debt, tight credit markets and record unemployment of 12.2 percent across the eurozone. As a result, the bloc’s economy has shrunk for six straight quarters.
Though the performance is not uniform across the eurozone and was slightly better than the previous quarter’s 0.6 percent contraction, Eurostat confirmed that nine of the region’s 17 members have seen their economies shrink for at least two quarters, the common definition of a recession. They are Cyprus, Finland, France, Greece, Italy, the Netherlands, Portugal, Slovenia and Spain.
The economy is not likely to improve much in the current quarter, either. In a separate survey, Eurostat said eurozone retail sales fell by 0.5 percent in April. That’s the third straight monthly drop in a sector that is key to economic growth.
Separately, a monthly survey of business activity from financial information company Markit pointed to a further drop during May. Though its composite purchasing managers’ index of the manufacturing and services sector rose to 47.7 points from April’s 46.6, the number is still below the 50 mark that would indicate expansion.
The figures paint a grim picture just as the European Central Bank’s governing council prepares to discuss what to do to get the eurozone economy growing again. It is not, however, expected to announce major new measures at the end of its meeting Thursday. Last month, the ECB cut its main interest rate to a record low of 0.5 percent.
“There is little in the latest batch of data to suggest that the eurozone economy is about to pull decisively out of its prolonged recession,” said Jonathan Loynes, chief European economist at Capital Economics. “Indeed, while our forecast of a 2 percent drop in GDP this year may prove a bit too pessimistic, we still think that the consensus forecast of a 0.5 percent contraction is significantly too optimistic.”
Though the eurozone’s current recession is not nearly as deep as the one it suffered in 2008-9, which ran for five quarters, it is now the longest in the 14-year history of the euro.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
China is NOT happy – especially as over there the European Union’s decision to impose duties on Chinese solar panel imports, looks like no more than the twitch of a desperate and dying economy whose economic clout has long dissipated.
This is how it works on Planet EU: Countries such as France receive heavy EU agricultural subsidies which enable it to “dump” vast quantities of cheap wine in China. Chinese solar panel manufacturers receive subsidies from heir own government which allow it to dump cheap solar panels in Europe. So what does Europe do? It objects and then imposes import duties on the solar panels. But why?
The EU says that it is to safeguard jobs. Quite right too! Until you realise that the vast majority of EU solar panel manufacturers are in…..Germany!
Not surprisingly, China has retaliated and just announced its own anti-dumping and anti-subsidy investigation into imports of European wine. It is NOT Germany but France and Italy who will suffer.
EU Job protection? Yes – but mostly in Germany.
This is what the Chinese Communist Party’s official mouthpiece, the China People’s Daily says: “Times change and power rises and falls. Still this has not changed the deep-rooted, haughty attitudes of certain Europeans.” ………Bitchy!
China knows that a EU in trouble is a dangerous EU but it is also acutely aware that the EU is punching way above its weight.
The EU-imposed import duties will be a severe blow to Chinese companies such as Trina Solar Ltd, Suntech Power Holdings Co. Ltd. and Yingli Green Energy Holding Co. Ltd. The upshot for Europe will be inflationary with a big increase in solar panel prices.
China’s next likely target ? Probably French-based Airbus manufacturer EADS. That will mean even more headaches for President Hollande because the potential losses to France could be astronomical.
Never mind, as long as the EU continues to protect Germany’s interests.
Spygun Snapshots for 3 June, 2013
11:36 am FUNDING FOR LENDING and The Law of Unintended (but inevitable) Consequences: NO increase in lending to SMEs but Mortgages are cheaper, thus pushing up house prices and making it MORE difficult for first-time buyers to join in the fun! Those banks!
11:28 am ED BALLS' idea of scrapping heating allowance for some "olds" is a sound one. If a few more old dears "pop-off" through hypothermia, it'll liven up the Antiques Trade with more Art Deco gear coming onto the market in the Spring. The Heating Allowance has played absolute havoc with the Antiques and Second Hand Furniture trades.
Spygun Snapshots for 28 May, 2013
7:34 am European Union: The United Kingdom and France have finally managed to persuade the rest of Europe agree to the supplying of arms to Syria. A sad day, especially as once again, politicians fail to learn the lessons of (recent) history and begin the process of creating yet another pile of rubble in the Middle East. Mind you, it IS an extremely creative way to boost exports - especially for France......and just think of the reconstruction contracts when this is all over! New roads, new schools, new hospitals, new limbs.....Another nice little earner...
Spygun Snapshots for 27 May, 2013
12:27 pm USA friends: I know that your President appears to have fallen asleep at the wheel but could you please give him a nudge. Today, the British Foreign Secretary, William Hague is about to recommend to the European Union that it should indirectly arm Al-Quaeda in Syria......and those EU Muppets are very likely to sleepwalk into yet another war. Obama needs to speak - unless of course, one of your own American Senators or ex-Secretaries of State has already bid for Syria's reconstruction.
9:45 am There's a very simple principle in Risk Assessment: Identify the Root Cause of a problem and deal with it. Saddam, Gaddafi, Mubarak and now Assad are (or were) the root cause of each of their country's social and political problems. Unfortunately, in its constant quest to keep its hands clean, the "United" Nations will NOT address any root problem once it has exhausted the "initial talks", followed by the obligatory "condemnation" followed by yet another pointless UN resolution. Those root causes don't listen! As none of the above has ever worked, why continue with a pointless process? Arming insurgents and rebels is never the solution - unless the primary motivation is commercial rather than political. Take down the bad guy - or , in the continued quest to keep our own murdering hands clean, are we happier to watch the rebels capture, humiliate and murder a despotic leader with our contribution being merely arms and arms-length connivance.
9:31 am After the Woolwich murder and the ensuing media-fired "Muslim Terrorist Under the Bed" scare, Prime Minister David Cameron will lead us towards that place where we Brits are at our greatest. He will form a committee! TERFOR will be the "Tackling Extremism and Radicalisation Task Force". That'll teach all those psycho bastards such as Adebolajo!! What Cameronshould be doing is imprisoning all the anti-West venom mongers such as Omar Bakri and throwing away the key. It's time to stop pussyfooting about.
Spygun Snapshots for 23 May, 2013
8:39 am What happened to President Obama's 2008 campaign pledge to close the Guantanamo Bay prison? Lately, the whole debacle has been highlighted by more than 100 of the detainees being on hunger strike with dozens of them being force-fed to stop them from dying. A good start would be to set the innocent ones free and deal fairly with the rest. .....and perhaps stop preaching to others about freedom and democracy.
6:57 am For as long as we continue to stick our colonial-mentality noses into places where they don't belong - because we used to be a world power, we will experience the occasional violent episode such as yesterday's horrific murder. We are not halting but provoking the spread of terrorism. The meeting in Cabinet Office Briefing Room A (COBRA) will no doubt result in yet another knee-jerk ruling, finger-pointing and more macho political posturing by the Prime Minister or Foreign Secretary. How about (for a change) a short statement, followed by a dignified silence? (...and LESS of the "Muslim Bogeymen" talk. A nutter is a nutter in ANY religion)
6:44 am I still cannot believe that the BBC's Political Editor, Nick Robinson managed to get away with: "The attackers were of Muslim appearance". Presumably, they were on camels, eating couscous and pointing towards Mecca. He could have added: "....and the Police had that Church of England air about them..." Shocking.
6:33 am The Vampire Squid, otherwise known as Goldman Sachs says that the current mad bull market will continue through to 2015. What ARE they up to? Mind you, when there's only one game in town......
David Cameron on yesterday’s barbaric murder in Woolwich: “On our televisions last night, and in our newspapers this morning, we have all seen images that are deeply shocking. The people who did this were trying to divide us. They should know something like this will only bring us together and make us stronger.”
Sorry Dave but this was a numbingly tragic murder of a young soldier by a psycho. It was not the Blitz or the Battle of Britain.
This was a nutter dispensing uber-violence to an innocent serviceman who was in the wrong place at the wrong time – so please do not imbue the crazy bastard with any higher motive such as ”.…trying to divide us”, followed by a shockingly bad speechwriters “counterpoint” : “…bring us together”.
DC’s short “speech” outside No.10 was scrotum-shrinkingly embarrassing and inappropriate. It was “Speechwriting by Numbers” at its very worst.
In future, can we please dispense with the pseudo-Churchillian platitudes and soulless “sincero-talk”. Thank you.
p.s. Either hire a decent speechwriter or next time, ask Boris to do it.
Spygun Snapshots for 22 May, 2013
7:00 am Today, Deputy Prime Minister Nick Clegg, will say that he & DC remain "absolutely committed" to maintaining their partnership - although admittedly, the bridegroom is spending a lot more time working away from home.... :)
Spygun Snapshots for 21 May, 2013
6:00 pm The Consumer Prices Index for April 2013 was 125.9 and for March 2013 it was 125.6. The means that prices are INCREASING. However, inflation APPEARS to be going down because the CPI for April 2012 was unusually high. (Inflation is measured in discontinuous annual slices and gives a distorted (and meaningless) inflation figure ). Here is today's publication. Have a look at Page FOUR: http://www.ons.gov.uk/ons/dcp171778_308425.pdf .........EVERYBODY's analysis of the "fall in inflation" is wrong. The Government is quite right in assuming that 99% of the population does NOT understand statistics!! As usual we have the situation of prices going up and inflation going down!! Using the CPI figures above and "annualising" the increase, gives us an inflation rate of 2.87%.
Spygun Snapshots for 20 May, 2013
3:36 pm Eurozone Crisis: The next Eurozone catastrophe will occur when there is a general loss in confidence over FRANCE. Remember, this is an economy where more than half of the voting population is employed (directly or indirectly) by the state. They've already started setting fire to cars. Sheep next!
2:48 pm EUROPE: The current European Union argument is NOT really about "renegotiating" the terms of our European Union membership. It is about David Cameron's deep–seated delusion that the gulf between Britain and the rest of Europe, on the future shape, direction and terms of reference of the European Union, are ever capable of being bridged. They can NEVER be bridged. Since WHEN have we ever consistently agreed with Germany or France? The British have always represented an independent spirit which is at its most comfortable and potent when ploughing its own lonely furrow.
2:34 pm And finally, this is John Major speaking in 1997. His speechwriter? Bet you can't guess! "We believe that in an uncertain, competitive world, the nation state is a rock of security. A nation’s common heritage, culture, values and outlook are a precious source of stability. Nationhood gives people a sense of belonging" "The government has a positive vision for the European Union as a partnership of nations. We want to be in Europe but not run by Europe."
2:29 pm European Union. This is John Major speaking on 7th December 1994: I don’t have a shred of doubt that our interests are for us to be in the European Union, building the sort of European Union we want. Where would so much of your trade be if we were not? What would be the position if we found ourselves outside real influence? What would happen in terms of the regulations and directives if we were not in there pitching? I doubt there’s more than a handful of people in this room who don’t believe that our interests emphatically lie in Europe. It is about time some of you got up and said that loudly and clearly. It is about time you stopped having this debate run by a handful of people who are fundamentally opposed to Europe and who seem to turn every part of the debate against what is happening in Europe. NINETEEN YEARS ago, DC!!
2:25 pm This is John Major addressing the Tory Party Conference on 11 October 1991: “We can’t go on as we were in terms of Europe: we should be at the centre of Europe if we are going to properly protect our interests”. “But being in the centre of Europe doesn’t mean we’ve sold out, doesn’t mean we’ve suddenly become Europhiles and adopt every fetish that emerges from the European Commission. Of course not”. “What it does mean is that we are in a better position to influence the way in which Europe goes”.................Sound familiar? They haven't made much progress in 23 years, have they!! You'd think that they would have sorted all this out before they came back to power!!
Spygun Snapshots for 15 May, 2013
10:45 am Just realised why Theresa May is announcing "Life means Life" sentences for cop killers TODAY. After her reception by the Police Federation's conference last year, she needed something to give them! Mind you, it will doubtless be one of those "subject to......" announcements with any inquiry not reporting until after May 2015!............. Note to Theresa: The Police Federation are NOT stupid. DON'T patronise them.
Spygun Snapshots for 14 May, 2013
6:15 am Today, the Conservative Party will be publishing “draft legislation” which will (hopefully) write into law David Cameron's "European referendum by 2017" pledge made earlier this year. Surprising, because 24 hours ago there wasn't even a hint of such a publication. The only remaining question is HOW will the proposed legislation be presented? On a beer mat, back of an envelope or Marlborough packet? (Nick Clegg's reaction should be interesting!)
Spygun Snapshots for 13 May, 2013
6:12 pm European Membership/Referendum: The time has come for David Cameron to specify WHICH aspects of British membership of the European Union he intends to "renegotiate". The Annual Contribution? Immigration Issues? The "Too Many Chiefs" aspect..or what? The electorate needs specifics. Not the sweeping generalisations and bulls**t to which we have become accustomed. No more procrastination - just a list please, Dave!
1:01 pm David Cameron's promised referendum on the United Kingdom's continued membership of the European Union will not take place until after the next General Election. That is because he is leader of a Coalition government and the Liberal Democrats, his coalition partners, are anti such a referendum. To add to Cameron's problems, there is talk of a vote on an amendment which would enshrine the promised referendum in law. Many MPs are criticising the fact that there was no mention of a referendum in the Queen's Speech whereas the traditionally pro-European Lib Dems have said it is not a coalition policy to legislate for a EU vote in this Parliament. Meanwhile, UKIP leader Nigel Farage continues to pour fuel on the Tory fire by reminding everyone that it is perfectly legal and acceptable for election candidates to stand for two parties. For instance a Conservative - UKIP ticket! That Nigel really is a very naughty boy..... :) (By the way, what happens in the unlikely event of yet another Conservative/Libdem coalition in 2015? Referendum or NO Referendum?)
11:19 am Eurozone: When the European Central Bank (ECB) has completed the inevitable move to negative interest rates and ECB's very own Il Duce, Mario Draghi has used up all versions of "Whatever it takes......" and the Eurozone's crumbling economy has turned to dust, there will be only one "Whatever it takes" left - Money Creation. Quantitative Easing will become the only option. The only question is this: How will they distribute the printed Euros - according to needs or according to means?
9:29 am A few months ago, David Cameron led a trade delegation to China. Then he cleverly followed up by having a meeting with the Dalai Lama - which really pissed off the Chinese and screwed up any goodwill he may have accidentally created in Beijing. Today, he is in Washington, meeting President Barack Obama. Does anyone know when DC is meeting Al Quaeda or does he have Iranian President Mahmoud Ahmadinejad popping into No 10 for prayers and afternoon tea?
8:13 am Obama "launches campaign". Obama "seeks donations for healthcare law". Obama "urges Congress....". Those are the verbs of a struggling leader. Getting the increasing feeling that The President's power is dissipating and he is gradually becoming purely ornamental.......
8:05 am Malta's banking sector is eight times larger than its GDP; about the same as it was in Cyprus before the rescue. Nevertheless, the official line is that Malta unlikely to follow Cyprus, Ireland, Greece, Portugal and Spain into crisis. That's a relief! ......NOTHING can possibly go wrong in Malta....Financial shocks?....."We spit on financial shocks!" Remember...you read it here first. Malta is safe....(!)
7:25 am It's good to see UKIP's Nigel Farage maintaining a dignified silence whilst the Conservatives begin the process of gentle EU in-fighting which will inevitably culminate in a challenge to David Cameron's crumbling leadership. The bonus being that if DC goes, then so does Chancellor Gideon. Now who's a clown?
7:14 am Defence Secretary Philip Hammond has joined Micheal Gove in giving David Cameron a major EU-headache .....and this may only be the beginning. One wonders how many more of the Cabinet will "come out" in the next few weeks. The only other thing that Gove and Hammond have in common is that each sees himself as future Conservative leader.....so their perceived duplicity is not as straightforward as it seems. Mind you, there is a member of the Tory High Command who will definitely NOT share in any Cabinet "I am Spartacus!" moment. It is DC's very own "Uncle Tom", Grant Shapps. The Manchester Poly "old-boy" is playing the long game.
Several months ago, I wrote about the strange new exhortary but meaningless style of oratory designed in the 1960s by the Soviets for use by their shiny-suited Party apparatchiks. It expresses no commitment or intent but cleverly disguises non-commital nonsense as both achievement and the promise of future achievement. SEE HERE.
Eventually, this hortatory nonsense was seized-upon by Eurowonks and has now been in European Union use by Brussels Commissars for a few years.
It has now been adopted by our own David Cameron!
In its simplest form it is the art of saying “We MUST” and never “We WILL”
As an example, here’s an extract from the last week’s Queens Speech Debate:
DAVID CAMERON: “That is what this Queen’s Speech is all about: rising to the challenge of preparing this country for the future. We are in a global race and the way we will win is by backing families who want to work hard and do the right thing. To do that, we must get the deficit down, not build up ever more debts for our children. We must restore our competitiveness so that British businesses can take on the world. We must reform welfare and pensions so it pays to work and pays to save, and we must reform our immigration system so we attract people who will benefit this country, and we clear up the mess we were left by the Labour party.”
Neither he nor Chancellor Gideon have ever said “We WILL get the deficit down”, “We WILL restore our competitiveness” etc…..and notice the standard government cliché which ends so many of the Coalition’s sentences these days! (underlined above).
Two minutes and three paragraphs later in the same speech, the Prime Minister delivers a variant:
DAVID CAMERON: “We need to get the deficit down, so we will complete a spending review by the end of June. We will legislate to abolish needless bureaucracy such as the Audit Commission. We will pass laws to raise revenue by stopping tax abuse. We need to restore our competitiveness…………”
The only times when definite intent is expressed is also demonstrated above: “We WILL complete a spending review,” and “We WILL legislate”.
Legislation is what a government DOES! Overused Reviews, Inquiries and Commissions are all substitutes for proper decision-making. They are this government’s 9ct hallmark and will be their legacy.
Must try harder.
Spygun Snapshots for 9 May, 2013
9:40 pm Britain, U.S. and Australia hunt for tax evaders is yielding leads says Chancellor Gideon! There's nothing like plenty of warning!! http://reut.rs/10eezAJ
9:30 pm The United States of America is about to demonstrate that you CAN have a free trade agreement with Europe WITHOUT adopting the Euro or contributing BILLIONS towards a Brussels bureaucracy!! Soon the rather clumsily named Transatlantic Trade and Investment Partnership (TTIP) will be negotiated! One cannot feel that perhaps Transatlantic Investment and Trade System (TITS) would have been more appropriate. http://reut.rs/147vK72
Spygun Snapshots for 3 May, 2013
12:03 pm After yesterday's lesson at the hands of UKIP, Conservative politicians can no longer allow themselves to be perceived as a privileged, out-of touch, unfeeling bunch of posh twats. Otherwise, they will definitely lose the 2015 General Election. Paradoxically though, Boris may be the answer.
It used to be said that one of the biggest corporate lies was “I like a man who speaks his mind!” Nobody likes someone who tells it straight – especially if there’s an element of implied criticism.
When a company director says to an underling “Tell me what you really think about our latest initiative” what should the response be? You honestly believe that it is a crock of shit but you also know that it was the directors “baby”. If you’re wise and familiar with office politics, you tell the director exactly what you know that he wants to hear. On the other hand, if you’re a highly principled idiot, you are likely to tell the truth (your truth). That sort of response can come under the heading of “a novel way to resign”!! It is not worth the risk.
UKIP leader Nigel Farage is a straight-talking man and tells us what we want to hear – but he is obviously no idiot. He tells it straight and his disciples continue to multiply. He has two things which give him a great advantage over other party leaders. Firstly, he has what Boris Johnson has – Charisma….a carefully-cultivated roguish old-school, charm……. and he smiles a lot. Yes…it’s THAT simple!
Of course, he has the added advantage of an Establishment-led Coalition government which gives the perception of being utterly incompetent. The Labour Opposition has no discernible “bite” and is led by yet another charmless product of Planet Politics. The other bit of the Coalition (the small bit) is already in terminal decline – a full two years before the next general election. For our mate Nige, it’s like shooting fish in a barrel.
Nigel Farage can do or say whatever he damn-well pleases and there’s no-one around with the balls to censure him. He is the enemy of all the other political parties, and coincidentally they are also the voters’ enemy. But more importantly, he is the sworn enemy of the self-serving bureaucratic edifice that is the European Parliament.
His election campaign started not a few weeks ago but leapt into life months ago in Brussels as Farage demanded of Van Rompuy: “Who [the f***] are you…..?” That was the moment when many of us , whether we agreed with his politics or not, fell in love with Uncle Nigel. [The parentheses above and their content are mine!]
There was none of the political correctness which constrains David Cameron. If pushed, you can imagine Nigel saying “Barroso! you’re a twat!”- not that he would….but he has imprinted his personality on the national psyche so powerfully….that we now believe that he WOULD say what many of us are thinking.
Farage’s other great plus-point is that although he is the son of a stockbroker and attended Dulwich College, he went to work(!) (as a City commodities broker) at the age of 18. He has exactly the sort of background that the Conservatives would dearly love their leader to have.
So, as Nigel and his disciples march out of the wilderness into the political sunlight and as UKIP party contributions and sponsorships accelerate, what’s the future for the other parties?
Make no mistake, the Tory Starchamber’s Illuminati are looking very closely at their own Party leadership, as are the Trade Union leaders who set the drumbeat for the Labour party.
In the first instance, we can expect a clumsy lurch to the Right from David Cameron in a desperate attempt to woo back former Conservative supporters and hopefully, the other Miliband bought a return ticket.
Whatever the mid-term future holds, we are in for a very interesting two years.
May 2015 will be upon us very quickly!
In tomorrow’s Local Elections, too many United Kingdom voters are going to “dump” their votes. They are going to dump them either by voting for a fringe party or (hopefully!) for an Independent.
In the United Kingdom, fringe parties (quite rightly) are tolerated but that doesn’t necessarily make them all acceptable. Many are a joke and are meant to be a joke.
Let us have a look at Local Elections – they tend to be the ones with the lowest voter turnout, yet on a day-to-day basis, we are affected far more by our local politicians that by the Westminster Mob.
Currently, our perception of Members of Parliament has taken a big “hit” and we now regard them as a load of unscrupulous, self-serving, incompetent Muppets and some may say that the same could apply to local Councillors.
There was a time when party politics had nothing to do with local elections. Hopefully, one day, local politics will return to the election of individuals who are best suited to manage and control local issues and budgets. Unfortunately, the local politician, much like his Westminster cousin is a pack animal rather than a free thinker with your interests at heart.
Every Party has individuals that we can all admire, irrespective of our own political affiliation. There are examples of politicians who are or were good at what they do, but importantly, their skills and abilities have little to do with their political allegiance or Party.
You should not be voting Labour in your local election because , for instance, you have a good Labour MP within your constituency or because you have a shrine to Ed Balls. You should not be voting Conservative because your mum was once photographed with Margaret Thatcher. You should not be voting Lidem because Nick Clegg once shook your hand and you should not be voting UKIP because you heard Nigel calling Van Rompuy a prat in Brussels.
Neither should you be voting for a total unknown of indeterminate political persuasion because he “looks nice” or withhold your vote because you have been upset by the Westminster expenses scandal or by the excesses of a particular Conservative, Liberal or Labour MP.
Try to avoid the “They’re all the same waste of f*****g space!”Syndrome.
At local level, we should all be asking ourselves just one question: “Can this individual be entrusted with the responsibility of representing me effectively in on the Council and will he (or she) have my best interests at heart.”
Forget expenses, forget David Cameron’s leadership issues, forget the fact that the Tory front bench is portrayed as a bunch of “yaboo-sucks-to-you” Toffs, forget Chancellor Gideon’s perceived incompetence, forget Clegg’s silly hair, Miliband’s scary looks or even the fact that Nigel seems like a good bloke.
Vote for a local candidate that you believe will do his best for YOU.
Having said all that, there is far too much political posturing at local level – too many of them fantasise about being at Westminster. Consequently, they attempt to ape their Westminster heroes, so that too much energy is given over to political in-fighting rather than concentrating on the needs of the local voter – but that’s all part of the present game!
Finally, remember that not all Liberal Candidates are vegetarian lecturers and white-collar public-sector workers. Not all Conservatives are barristers, middle-managers and skinheads, not all Labour candidates are teachers, media people or union members and not all UKIP members are ex-BNP nutters or disaffected, deselected or dumped Tories.
At local level, vote for individuals and not (just for the hell of it) for the wrong political party – and certainly don’t bother with the “we need to send a message to Cameron” type vote. Trust me – he will not hear your message
To be on the safe side, find a good solid Independent candidate – just beware that he or she isn’t a main party supporter in temporary disguise!
Spygun Snapshots for 30 April, 2013
12:53 pm Recalling the time when the IMF's Christine Lagarde thought of Chancellor Gideon as a real "vainqueur" (winner, conqueror). Now realising that it was probably just a matter of mispronunciation. Just like de Gaulle's wife who once announced that the most important thing in her life was "a penis". (She meant "Happiness"). http://bit.ly/ZHJi5P
9:54 am Hopefully Justice Minister Chris Grayling's pre Local Election nonsense about prisoner rights and privileges has more "legs" than his October 2012 pre PCC Election "announcement" about the now terminally watered-down "Bash a Burglar" initiative. Talk about "transparency", or should I say, blatant electioneering! We all look forward to the next election and future Grayling pre-election announcements. One suspects that Public Banker Flogging would be an overwhelming favourite, Chris! http://bit.ly/1849e2c
8:11 am The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts: "Investment in infrastructure is crucial for stimulating economic growth. However, the Treasury's Infrastructure Plan is simply a long list of projects requiring huge amounts of money, not a real plan with a strategic vision and clear priorities." Over to you, Gideon!.........http://www.govtoday.co.uk/politics/27-growth-reform/15749-mps-publish-report-on-planning-for-economic-infrastructure
8:03 am It is no coincidence that in this election week, Justice Secretary Chris Grayling is announcing prison regime-changes. After all, there are wavering Tory right-wingers who need to be coaxed from the fence. A good old-fashioned "Macho-up" of policies should do the trick. What's next? Perhaps we should reopen the hanging debate or perhaps a Wednesday announcement about keeping all foreigners out and the internment of all those with foreign-sounding names? Well.....at least until about 8 p.m. on Thursday.
7:51 am Italy's new Prime Minister Enrico Letta said yesterday that his right-left coalition government would press for a change to the European Union's focus on austerity and pursue economic growth and jobs. Obviously already reserving his place in the queue behind Spain.
7:31 am Yesterday I had an encounter with a Local Election candidate. I won't tell you which Party he belonged to but let's just say that he believed with all of his heart and soul that the European Union was Satan . As a result of my conversation with him, may I humbly suggest that perhaps Bus Queues outside mental institutions do not provide the best source of prospective candidates. Wibble.
7:24 am The imaginary Eurozone recovery remains just that....so the only question this week is by how much the ECB will cut interest rates. Luckily, as there's no clear definition and because we must NOT "upset the markets"..... the phrase "Economic Depression" will not be used. However, in spite of politicians' warm words and wonderfully creative statistics and extrapolations, that is exactly what many people are feeling.
7:01 am The European Union is drafting a law which will make losses for larger savers a permanent feature of any future banking crises. (They looked at Cyprus and they liked what they saw!!). However, they also say "Depositors should be the very last to suffer losses when a bank collapses." This type of "double-think" is another example of the legislators failing to deal with fundamentals. The Root Cause of past , present and future banking crises is very straightforward. It is the banks' headlong rush for profits which can only be achieved through sucking cash out of the real economy. Banks should NOT be making such vast profits - all they really need is a reasonable operating margin. Banking is a business whose only TWO functions are to protect and redistribute money. Currently, they are doing neither very successfully.
Spygun Snapshots for 29 April, 2013
11:32 am (Reuters) - Five years after the onset of the global financial crisis, the world economy is in such a chronic condition that the European Central Bank might cut interest rates this week and the Federal Reserve is likely to indicate no let-up in the stimulus it is providing the U.S. economy.... http://reut.rs/Y6R8sk
11:26 am UKIP: Nigel Farage on BBC Radio 4’s World at One: "I’ll be honest with you, we don’t have the party apparatus in a very short space of time to fully vet 1,700 people. We have made people sign declaration forms, expressing the fact that they’ve never been part of political parties that we consider to be wholly undesirable. By that I mean the BNP. And, you know, we ask people if there is a problem with a criminal record or whatever else it may be, please tell us. I have no doubt that amongst those 1,700 one or two people will have slipped through the net that we’d rather not have had."
Spygun Snapshots for 26 April, 2013
7:03 am The Barclays Bank AGM provided a few fireworks, courtesy of Mrs Joan Woodward of Spalding. This latter-day St Joan spoke up for everyone as she berated greedy bank executives. Barclays' chairman Sir David Walker said that he was "sympathetic" to her concerns. Here is a Daily Mail article which describes the encounter. It is worth reading..........http://www.dailymail.co.uk/news/article-2314785/You-bunch-crooks-Widow-75-speaks-millions-stands-Barclays-AGM-attack-greed-bankers-pocketing-sky-high-pay-packets.html If only Dave, Gideon or Vince had her balls!
6:40 am The Coalition government continues its programme of lashing out at everyone and everything that it can blame for its own pooadministrative performance. Society's disadvantaged are already in its sights and now its the turn of the accountants. PwC, Deloitte, Ernst & Young and KPMG are our four biggest accountancy firms and for a very long time, they have had a discreetly symbiotic relationship with Her Majesty's Revenue and Customs. But if between them, these companies employ 9000 who help businesses to optimise their profits and HMRC only employs 65 staff to ensure fair-play, that is hardly the accountants' fault! The Treasury Select Committee continues the government's "bleat" about the exploitation of tax loopholes and "insider" knowledge by the very companies which assist government in formulating our tax laws! UK tax law is outdated and has become an out-of-control Frankenstein. There comes a time when there is only one viable solution....but (and it pains me to say this!) don't blame the accountants.....but we do like the phrase "Tax Avoision"... :)
Whenever man has struggled with solutions to big problems, he has turned to his God, who has consistently said that if man endures deprivations and suffering on this Earth, he will get his just reward in Heaven.
The weird thing is that here we are in the Year 5PL (Post Lehman) and our politicians are behaving just like those prophets of old. WITHOUT any proof and relying solely on faith, they say “Endure the austerity and soon you will be transported to the economic heaven.” Meanwhile they (the prophets) search for “signs”. For instance, a small statistical variation in economic data is seized upon as a “sign” that all will soon be well. (Chancellor Osborne did it again yesterday when he announced “encouraging signs that the economy is healing” HERE In fact, he repeats the holy phrase.)
Is that true? Have we been offered any proof? Do we have to accept the words of the prophets without question or are we being heretical and behaving like Doubting Thomases?
If the New Religion is true, then we have been witnessing the longest Resurrection ever!
There is much talk of “positive sentiment” and Central Bankers accept gifts and many sacrifices from the people and prophets….but, is there really room for faith in economic thinking?
Currently, it would appear that it is all we have.
(As you listen to the Chancellor, notice the total lack of numbers and dates in the affirmation of his faith)
Spygun Snapshots for 25 April, 2013
1:48 pm One of the parameters which affects GDP is the state of the Black Economy - ".....but we don't want to talk about that, do we, John?" A stubbornly low tax "take", in spite of the very large increase in Private Sector employees, coupled to a moribund official GDP suggests that the Black Economy is thriving. ("Do you accept cash?")
9:00 am According to the preliminary guesstimate, GDP is up by 0.3% for Q1 2013. Firstly apologies for pre-empting the figure this morning in a previous post (below). Here is the official document. Note the downward trajectories in Production and Construction. http://www.ons.gov.uk/ons/dcp171780_308066.pdf Hopefully, Chancellor Gideon has learned his lesson and there will be minimal preening and other unseemly display behaviour.
7:02 am UKIP: Had an encounter with a UKIP Local Election candidate. A well-spoken, ex-Conservative businessman but unfortunately exhibiting a common failing. It's something which too many politicians and prospective politicians suffer from. Very poor listening skills. Remember: Telling is NOT Selling! Moaning about the fact that the only thing everyone talks about is Nigel, blaming the media and talking like a SINGLE ISSUE anti-Europe Party will not win proper votes - just the dumped ones from disaffected Tories - and that type of vote has a very limited shelf-life!
6:40 am This morning, there is lots of excitement in the media about the United Kingdom's GDP figures for Q1 2013. The figures will be released at 9.30 a.m. but there is already talk of the "triple-dip" recession!! I repeat (quarterly!) - there will be NO triple-dip recession. Why? Because the United Kingdom's economy has been in recession for over THREE YEARS. The odd +/- 0.3% is neither here nor there. GDP calculation is not an exact science - it is, essentially "Bucket Chemistry" PLUS today's number will be based on less than half of the data available and will be revised several times for up to the next two years. We are rapidly approaching the time when Chancellor Gideon will announce that the basis upon which we calculate GDP is flawed and that, in fact, the economy is growing!! It's the only option left! The REAL conundrum is that the government has "created" over ONE MILLION private sector jobs which so far, appear to be having a negative or at best, neutral impact on GDP......
Spygun Snapshots for 24 April, 2013
2:14 pm A University Professor can depart on a six-month lecture tour before anyone notices that he's missing. Likewise a senior lecturer can absent himself for about three months with no discernible effect on the smooth-running of a department. An ordinary lecturer may be able to take off about a week with minimal but measurable disruption. But if a lab-assistant disappears just for one afternoon, the whole place is in chaos. This principle also applies in the corporate world.
11:20 am EUROZONE: Italy's new Prime Minister Enrico Letta, a former minister under Massimo D'Alema's centre-left led government in the late 90s, is the nephew of one of Berusconi's closest aides, Gianni Letta. This should be very interesting, as is the make up of the new government. It will be a coalition which will include Berlusconi's party Popolo della Libertà (PDL), Partito Democratico (PD) and outgoing PM Mario Monti's centrist Scelta Civica. The PD holds the majority of seats in the Chamber of Deputies but not in the Senate and refused to strike a coalition deal with the PDL..............Four weeks ago, Italian Foreign Minister Giulio Terzi resigned........Silvio for the FinMin job? Now THAT would make Merkel's day!!!
10:05 am Yesterday, The French lower house of Parliament passed the so-called Marriage for All bill. The law was one of Socialist President François Hollande’s main campaign promises. "Ooh, le le!" There is also a parallel Bill which will allow gay couples to adopt. France has a strong Catholic tradition so inevitably, the twin Bills have been the subject of protests but more crucially there has been intelligent debate - unlike the UK where there was little debate but a lot of bigotry, sloganism, homophobia and Bishops.
7:15 am Goldman Sachs chief, Lloyd Blankfein, who has received $13 million in shares and a $5.7 million cash bonus on top of his $2 million annual salary says, " In a flat economy, lending money to businesses is one of the riskiest things you can do.” A bit of a Catch 22 situation!!!! ..........In many circles, GS is known as "The Vampire Squid" - as the result of this quote from an article in a 2010 edition of Rolling Stone Magazine: " Goldman Sachs is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." Nice. http://bit.ly/140Qz84
6:56 am Lending to SMEs: If you are in business and manage to be granted an audience by your Bank Manager - rather than meeting one of those cheap-suited "Business Advisors" or "Relationship Managers", ask him or her about their "Discretionary Lending Limit". You may be surprised to hear that they don't have one. They used to. The sad fact is that the majority of operatives that you will meet in your bank have no decision-making powers whatsoever. That has been one of the major banking changes of the last 20 years....................... "I'd like to help you but the computer says 'No!' "
6:44 am The Archbishop of Canterbury, also known, rather unfortunately as the "Primate of All England" is an ex-City man and wants to see the banks broken up and regionalised. I nearly agree with him. Because the banks appear to have forgotten all about business lending, what we really need is a set of Regional Stock Exchanges where SMEs can compete for investors' cash. Reorganising and "retraining" the banks away from their "The Computer says 'NO!' " mentality would take too long.
6:32 am The Chancellor's "wheeze" for stimulating the economy - the so-called Funding for Lending Scheme (FLS) has done extremely well in providing the banking industry with yet more cheap cash, as well as some little-needed capital for big business. Unfortunately, since the scheme was launched in the Summer of 2012, banks such as RBS, Lloyds and Santander have withdrawn more loans from business than they have approved. They siphoned off the money and have used it to provide cheaper mortgages. Today sees the announcement of a new and improved FLS! Banks will now be allowed to borrow an extra £5 from the FLS for every £1 they lend to a small or medium-sized enterprise (SME). In 2014, they will be able to borrow £10 for every £1 they lend during 2013! Quantitative Easing in disguise! Lending much-needed cash to SMEs should NOT be a "scheme" - it should be the norm. Banks have shown consistently that the "carrot" approach does not interest them. Time for a major rethink!
Spygun Snapshots for 23 April, 2013
10:17 am The European Commission has blamed "a lack of bank lending and record joblessness" for delaying an economic recovery. It would appear that they are still confusing CAUSE with EFFECT...... Just like last year, the recovery will be next year: http://reut.rs/ZJKkyj
Spygun Snapshots for 22 April, 2013
6:27 pm (Reuters) - HSBC's Chairman Douglas Flint has warned less well-off customers could lose access to basic financial services if lenders are overburdened by unnecessary regulation. "I do worry that we are beginning to see the industry move towards serving higher net worth individuals and moving away from the bottom of society," Flint told the City Week banking conference. The rules are meant to ensure advisors are better trained and that fees for financial advice are more transparent. However, several banks including HSBC have responded by withdrawing advice to customers with less than £50,000 to invest. Flint said overzealous regulation could reverse the expansion of financial inclusion seen in recent years. "It becomes more and more difficult to sell simple products to the lower income part of society and I think it would be retrograde if we end up effectively making the system safer by excluding the people that we brought into the system," he said........................... (Reporting by Matt Scuffham and Alice Baghdjian; Editing by David Cowel)
2:41 pm Quite a few Americans (including media people) still thinking that Chechnya is the Czech republic. Mind you, here in the UK, we had some thick yobs daubing "PAEDO" on a paediatrician's front door....
2:33 pm Central Banks have been comparatively quiet since the beginning of the year. I reckon we're approaching both an interest rate cut by the ECB as well as a shed-load more Quantitative Easing by everyone else who can. Then........ when pumping yet more money into economies hasn't worked, we have the spectre of negative interest rates. Denmark introduced a negative deposit rate last year.
12:23 pm I shall miss Mervyn King when he retires and his place at the Bank of England is taken by Mark Carney. But looking on the bright side, I'm sure that we shall be treated to a whole new set of metaphors. Mervyn used to be very keen on meteorological figures of speech (gathering storm clouds and headwinds) whereas, Mark Carney looks as if h'll be adopting a more modern scientific approach. Sample: "The UK economy has not reached escape velocity”. #cannotwait
11:59 am In spite of the fact that the entire economic world now accepts that Chancellor Gideon has overdone UK austerity - all in the long lost cause of a pat on the head from Moody, Fitch and Standard & Poors, there is NO WAY that we should be lectured by the IMF's Christine Lagarde! La décence commune m'interdit de vous dire où it peut se la mettre, Christine.
11:45 am I am NOT a qualified economist (I'm far too clever for that!). However, I will say this: The austerity burden currently being imposed on our society has been unfairly apportioned. Consequently, the wrong group has been unfairly encumbered. There are sectors of society which have neither "discretionary spend" nor "disposable income". THEIR income is spent almost exclusively on Food and Shelter. The current campaign by an over-conservative Coalition government does not appear to understand this. We may all be "in this together".....but some are now more "in it" than others. Time for an overdue rethink, Chancellor Gideon........ Otherwise F.O..........Foreign Office.
The head of Barclays investment bank, Rich Ricci is about to retire after having received an £18 MILLION bung from the company. The payment was announced on the last Budget day – probably to ensure that the news was well-and-truly “buried”, with the Chancellor taking on the role of temporary Barclays shield.
Mr Ricci was at the helm when the LIBOR-rigging scandal broke but it would seem that a quiet gold-plated exit rather than recrimination, continues to be the favoured option for senior bankers.
No-one has suggested any “naughtiness” on Mr Ricci’s part - but at worst, the LIBOR stitch-up was a major breakdown in management – by him, by his boss (Bob Diamond) and the Barclays Board. That begs the inevitable questions:
What does a senior banker have to do to face sanction or prosecution? What exactly is the message which the Government and the Regulation Industry wish us all to hear?
It’s probably: “Screw the system, screw the clients, say sorry and piss off with a handful of wedge.”
Or are we missing something?
Here’s a Mirror assessment of Mr Ricci from two years ago: http://www.mirror.co.uk/news/uk-news/inside-the-life-of-barclays-banker-rich-115678
Spygun Snapshots for 18 April, 2013
8:12 am UK UNEMPLOYMENT No amount of spin will make the United Kingdom's unemployment figures look anything less than tragic. But why? Probably because UK business cannot hold onto non-productive staff for any longer? It has been hanging on for too long already. It has become increasingly obvious that the Government is merely marking time in the vain hope that the economic cavalry will be appearing any minute now! Economies have always had a habit of eventually healing themselves in spite of politicians. Unfortunately, we may now be in a completely new and different game....and we don't quite understand the rules.
7:42 am GREECE: Prime Minister Antonis Samaras, addressing the Economist΄s conference yesterday said "Greece shall recover and the signs of the exit from the crisis will be appearing soon." Soon!?....... How does he know? I love politicians' predictions!!!!
7:05 am ENTERPRISE ZONES: Keep an eye on Eric Pickles. He may end up as the "fall guy" in the Case of the Moribund Enterprise Zones. He's already had one bollocking at the 26th February Cabinet meeting, as did Maria Miller for not rolling-out broadband fast enough to the 24 newly-created Zones.
6:37 am Just watched VT of Tony Blair greeting mourners on the steps of St Paul's. I wonder what he said whilst shaking European Commission President José Manuel Barroso's hand? "...and what do you do? " WE know the answer to that.
6:32 am You don't HAVE to be a psycho if you want to buy a gun in the United States of America - but it certainly won't harm your case. The 2nd Amendment is for EVERYONE, including the criminally insane. That's Democracy!
6:27 am SMEs still not getting a fair slice of the cash which the Bank of England dished out to the banks. Want to know why? The banks prefer to use the cash for mortgage lending. Why? More margin for them. In 2009, the Brown government made the mistake of condition and sanction-free bailouts to the banks. It's still happening.
6:21 am Chancellor Gideon's Enterprise Zones were going to "kick-start" the United Kingdom's economy. So far, they have produced about 1700 jobs, many of which are "churned" i.e. produced by existing companies moving into EZs in order to take advantage of cheap Rates etc. The number of jobs created is about 5% of the projected figure, so statistically, only another 20 years to go! BTW, the projected figure is about half of the latest increase in unemployment. (I'm not one to say "I told you so"!!)
Never mind all that “Debt as a percentage of GDP” nonsense. Here’s a picture of government debt on a simple picture, courtesy of ukpublicspending.co.uk.
It is OUT OF CONTROL.
All steep graphs are scary, no matter which way they’re pointing. Make no mistake, the above graph is so scary and the Chancellor is running out of options so fast, that we are about to reach a very significant and critical moment in Britain’s social and economic history.
Because Chancellor Gideon has well-and-truly painted himself into a corner and is greedy for cash, he will soon become like a schoolkid with his nose pressed up against the sweet-shop window. But what will he be looking at? Surely, there’s nothing left to plunder.
Currently, our savings are languishing in banks, gradually losing their value. Investment rates are lower than inflation and currently it seems as if the differential will continue to increase. THAT will erode our savings at an accelerated rate.
Dormant bank savings accounts have already been looted in order to fund one of the Chancellor’s rapidly growing array of “schemes” to stimulate the economy. On this occasion, the booty (up to £400 MILLION) will be destined for the Big Society Bank (remember?) which has now been rebranded BIG SOCIETY CAPITAL (BSC). Forty percent of BSC shares are owned by Barclays, HSBC, Lloyds Banking Group and RBS (They are preference shares which means that in the event of a collapse, the banks will have preference over other shareholders).
So what could the Chancellor and the banks be planning next? What happened in Cyprus ought to give us a clue.
As a country, we are not spending enough. One way to encourage us to spend would be to threaten our savings either by way of a levy (tax) or seizure.
You may be thinking “Yes, but surely, our savings are protected?” Yes, they are. The capital is protected but our cash is not protected against taxes.
Within four to five years, the government will have to find about £70 BILLION per year JUST in order to fund the interest payments on the money it owes. So where will it find the money?
It is there somewhere. Here’s a clue:
The richest 1% of our population, many of whom famously squirrel away their cash offshore, won’t be affected and neither will the large corporations - they pay tax when they want to plus they are also lucky enough to be able to decide how much to pay.
That leaves the ordinary Saver and Depositor.
The only thing that the government needs to decide is how to present the raid on our money so as to disguise what essentially will be a tax. There are several ways in which the exercise can be delivered.
For instance, a Cyprus-like levy. Simple and straightforward.
There may be some sort of government share-offer, designed to relieve us of our cash or even a mandatory Government Bond which those with a certain level of savings will be bound to purchase.
I would suspect that even Pension Funds are no longer safe.
But the really scary thing is that because this will be a concerted and choreographed international assault by governments and banks, there will be nowhere to run.
We are well and truly “All in this together”………well….most of us.
Spygun Snapshots for 17 April, 2013
9:19 am IN FOUR YEARS, the number of the United Kingdom's self-employed has increased by 367,000! Does that include those sitting in the spare room, staring at a PC screen waiting for their redundancy cash to run out?
This has been one of the most cited stats in the public debate during the Great Recession. Paul Ryan’s Path to Prosperity budget states their study “found conclusive empirical evidence that [debt] exceeding 90 percent of the economy has a significant negative effect on economic growth.” The Washington Post editorial board takes it as an economic consensus view, stating that “debt-to-GDP could keep rising — and stick dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth.”
Is it conclusive? One response has been to argue that the causation is backwards, or that slower growth leads to higher debt-to-GDP ratios. Josh Bivens and John Irons made this case at the Economic Policy Institute. But this assumes that the data is correct. From the beginning there have been complaints that Reinhart and Rogoff weren’t releasing the data for their results (e.g. Dean Baker). I knew of several people trying to replicate the results who were bumping into walls left and right – it couldn’t be done.
In a new paper, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst successfully replicate the results. After trying to replicate the Reinhart-Rogoff results and failing, they reached out to Reinhart and Rogoff and they were willing to share their data spreadhseet. This allowed Herndon et al. to see how how Reinhart and Rogoff’s data was constructed.
They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second, they use a debatable method to weight the countries. Third, there also appears to be a coding error that excludes high-debt and average-growth countries. All three bias in favor of their result, and without them you don’t get their controversial result. Let’s investigate further:
Selective Exclusions. Reinhart-Rogoff use 1946-2009 as their period, with the main difference among countries being their starting year. In their data set, there are 110 years of data available for countries that have a debt/GDP over 90 percent, but they only use 96 of those years. The paper didn’t disclose which years they excluded or why.
Herndon-Ash-Pollin find that they exclude Australia (1946-1950), New Zealand (1946-1949), and Canada (1946-1950). This has consequences, as these countries have high-debt and solid growth. Canada had debt-to-GDP over 90 percent during this period and 3 percent growth. New Zealand had a debt/GDP over 90 percent from 1946-1951. If you use the average growth rate across all those years it is 2.58 percent. If you only use the last year, as Reinhart-Rogoff does, it has a growth rate of -7.6 percent. That’s a big difference, especially considering how they weigh the countries.
Unconventional Weighting. Reinhart-Rogoff divides country years into debt-to-GDP buckets. They then take the average real growth for each country within the buckets. So the growth rate of the 19 years that U.K. is above 90 percent debt-to-GDP are averaged into one number. These country numbers are then averaged, equally by country, to calculate the average real GDP growth weight.
In case that didn’t make sense let’s look at an example. U.K. has 19 years (1946-1964) above 90 percent debt-to-GDP with an average 2.4 percent growth rate. New Zealand has one year in their sample above 90 percent debt-to-GDP with a growth rate of -7.6. These two numbers, 2.4 and -7.6 percent, are given equal weight in the final calculation, as they average the countries equally. Even though there are 19 times as many data points for U.K.
Now maybe you don’t want to give equal weighting to years (technical aside: Herndon-Ash-Pollin bring up serial correlation as a possibility). Perhaps you want to take episodes. But this weighting significantly reduces the average; if you weight by the number of years you find a higher growth rate above 90 percent. Reinhart-Rogoff don’t discuss this methodology, either the fact that they are weighing this way or the justification for it, in their paper.
Coding Error. As Herndon-Ash-Pollin puts it: “A coding error in the RR working spreadsheet entirely excludes five countries, Australia, Austria, Belgium, Canada, and Denmark, from the analysis. [Reinhart-Rogoff] averaged cells in lines 30 to 44 instead of lines 30 to 49…This spreadsheet error…is responsible for a -0.3 percentage-point error in RR’s published average real GDP growth in the highest public debt/GDP category.” Belgium, in particular, has 26 years with debt-to-GDP above 90 percent, with an average growth rate of 2.6 percent (though this is only counted as one total point due to the weighting above).
Being a bit of a doubting Thomas on this coding error, I wouldn’t believe unless I touched the digital Excel wound myself. One of the authors was able to show me that, and here it is. You can see the Excel blue-box for formulas missing some data:
This error is needed to get the results they published, and it would go a long way to explaining why it has been impossible for others to replicate these results. If this error turns out to be an actual mistake Reinhart-Rogoff made, well, all I can hope is that future historians note that one of the core empirical points providing the intellectual foundation for the global move to austerity in the early 2010s was based on someone accidentally not updating a row formula in Excel.
So what do Herndon-Ash-Pollin conclude? They find “the average real GDP growth rate for countries carrying a public debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0.1 percent as [Reinhart-Rogoff claim].” [UPDATE: To clarify, they find 2.2 percent if they include all the years, weigh by number of years, and avoid the Excel error.] Going further into the data, they are unable to find a breakpoint where growth falls quickly and significantly.
This is also good evidence for why you should release your data online, so it can be probably vetted. But beyond that, looking through the data and how much it can collapse because of this or that assumption, it becomes quite clear that there’s no magic number out there. The debt needs to be thought of as a response to the contigent circumstances we find ourselves in, with mass unemployment, a Federal Reserve desperately trying to gain traction at the zero lower bound, and a gap between what we could be producing and what we are. The past guides us, but so far it has failed to provide an emergency cliff. In fact, it tells us that a larger deficit right now would help us greatly.
[UPDATE: People are responding to the excel error, and that is important to document. But from a data point of view, the exclusion of the Post-World War II is particularly troublesome, as that is driving the negative results. This needs to be explained, as does the weighting, which compresses the long periods of average growth and high debt.]
Spygun Snapshots for 16 April, 2013
3:10 pm We all know that prices are continuing to rise. The headline news is that the Consumer Prices Index is "holding steady" with inflation unchanged at 2.8% . Look at page 4 of the attached ONS publication and you will see that the CPI rose from 125.2 (Feb) to 125.6 (March). That's 0.32% in one month. Annualise that by multiplying by 12 and the rate of inflation is 3.83% That's ONE PERCENT higher!!.......... http://www.ons.gov.uk/ons/dcp171778_306185.pdf