Spygun Snapshots for 26 January, 2012

10:56 am Are we currently in the middle of a transition from our Western system of Capitalist Democracy to  a form of  Chinese-style State Capitalism?  Certainly it would seem that the Eurozone has gradually embraced the concept of a more critical role for the State in its very direct impact on economic output. Am I the first to notice? It's all certainly beginning to feel as painful as a revolution!

10:36 am  There isn't a single person in Europe or indeed the world who understands what is currently happening to the European economy. For those who do not believe that the Eurozone can collapse, I would point out that there was a time not so long ago when it was inconceivable that the USSR would collapse - but it did and what's more to the point - there is life after economic death. If there is to be a collapse, then political leaders should embrace it , because this pre-Wall Street crash atmosphere cannot be allowed to go on forever.

9:58 am Yet another meeting today between Greece and those IIF  agents. Prediction: " We're close to an agreement". Then - another meeting. Then......anything to postpone that inevitable market collapse....

9:49 am Economy not so good? It's the weather, the Royal Wedding, Labour's mismanagement , Eurozone crisis, Global economic meltdown and world commodity prices - especially petrol and food. In other words, it is as we've suspected for a long time - our government has no control over the economy.

9:40 am Greece is going to have to legislate in order to force the private debtholders ( the hedge  funds mostly) to accept the badly-needed "haircut " on the value of the bonds which they are holding. The private investors, represented by the toothless IIF would prefer Greece to default so that they can trigger their Default Swaps.

9:36 am The very wise George Soros has said that the IMF who should be taking the lead in the the Eurozone  fiasco and not Europe's new self-appointed taskmasters  - the Germans.

9:34 am Greek banks need to be recapitalised very soon and to a decent amount. Whatever happens in the next few days, weeks, months (who knows?), there is every likelihood of a massive run on Greek banks as the Greek people withdraw their cash as will institutional investors.

9:31 am I am getting a weird feeling of unease about the attitude of Angela Merkel and her cohorts in respect of Greece. Perhaps I'm being paranoid but is it possible that Frau Merkel and her chums are operating behind the scenes and doing everything that they can to limit any collateral damage which may be caused by a total Greek default? Does that explain the delays and half-hearted promises?

9:26 am More worries about the UK  Border Agency and its work practices. For instance, last year the private security company G4S - an outside contractor provided guards to accompany detainees to Jamaica. 104 "escorts" accompanied the 35 detainees. On a similar trip to Lagos in Nigeria 131 escorts accompanied 53 detainees. Those trips and many more were on planes chartered by the Border Agency. The current spat is not about the expenditure on repatriation of undesirables but the verbal and physical abuse that they are subjected to .

9:05 am Nick Clegg's announcement today about raising tax thresholds is already in the Government's plan. He has been given "permission" by the Treasury to take a bit of the credit in telling us all about it in advance of the March Budget. Is it right that a Deputy Prime Minister has his work checked by the Treasury like naughty schoolboy and only then given permission ?

8:07 am In spite of political promises, UK economic growth will remain near-enough flat for the next 5-10 years.  Once that has been accepted, progress of some sort can be made. As an aside, there will definitely be more Quantitative Easing by the Bank of England. Inevitable.

8:04 am The Government looks to be between a rock and a hard place. There will soon come a time when there will have to be increased government expenditure in order to generate some(any) sort of economic growth. Those Enterprise Zones were nothing but a brave schoolboy attempt to tempt budding entrepreneurs to take a risk in return for decreased rates!! Not much of an incentive but as usual, the Enterprise approach has been very useful to established companies who needed to save a few quid. Well, at least the removal and relocation companies have benefited. If the Chancellor does start to pump serious money into SMEs and Mid-sized businesses, he knows that the Labour Government will start bleating "We told you so!!!". Yet another example as to how Party Politics can be a major block to economic progress.

7:54 am Mid to long-term the United Kingdom has to stop its ridiculous love affair with Degrees. We all know that  - but our education system is now totally geared towards degrees  and "qualeefeecashuns". That is producing too many young unemployed and far too many graduates having to compete for McJobs instead of launching any kind of professional career. Germany loves its engineers and production workers. We love letters after our name. In this case, we should follow Germany's fine example.

7:44 am Angela Merkel at the World Economic Forum in Davos: " We need more Europe". She meant "We need more Germany"

Spygun Snapshots for 20 January, 2012

4:39 pm Greek negotiations: They're probably debating whether a 70% write-down is a de facto default. The hedge funds want to activate their CDS.  BUT....it is The International Swaps and Derivatives Association (ISDA) which has the final say on whether a "credit event" has occurred. Only their agreement will trigger the payment of default insurance taken out on Greek bonds via the credit default swap market.

12:29 pm Europe is very keen to introduce a transaction tax and would seemingly do ANYTHING to tempt-in the United Kingdom.  The latest "wheeze" is a "bourse tax" which is essentially a tax on stock markets. As the name of the proposed tax suggests, this has Sarkozy's fingerprints all over it. At the present time, there is little indication as to what the purpose of this tax would be. The original Tobin Tax was to have been used to help the poor and the environment - but those objectives may well have been watered-down by now. In addition, there are some of us who believe that the markets will crash very soon, anyway!

12:11 pm International Debt Inspectors are in Athens while Greek Finance Minister Evangelos Venizelos continues the third day of talks with private creditors. He is asking them to agree to a €100 billion  write-down on their Greek bond-holdings. A deal is necessary if Greece is to get the next batch of bailout cash that would prevent a devastating debt default. Greece does not have enough money to cover a €14.5 billion bond repayment in March.

11:24 am Is there someone in Government who is keeping an eye on those Chinese Sovereign Wealth Funds? The amount of money which they have available means that they can buy-up whole countries!  The latest is the China Investment Corporation. It has bought 8.68% of Thames Water. Time for us to wake up because this could be the start of maybe just a trend or possibly a full-blown revolution. Possibly a good case for re-nationalisation? Over the last few years, our Utilities have been  imperceptibly "creeping" into foreign ownership.

11:15 am Looks as if the lawyers are going to run the Eurozone because the Germanisation of Europe is continuing . This is a leak from a draft Euro-proposal: "the EU's highest court will be able to fine any country that does not adopt a balanced budget rule in its constitution with a penalty of up to 0.1pc of GDP." Look for a whole new Euro Organisation, probably with its own President. Its job will be to flip-flop from country to Euro country as de facto economic policeman. " You vill obey das Rules!!"

11:02 am Whatever the outcome of the talks between Greece and its creditors, the Greeks are unlikely to come out of the meeting smiling. However, it would seem that Greek negotiators are not allowing themselves to be rolled over, either by greedy Hedge Fund managers nor nervous bankers. Here's a great quote from Greek Finance Minister Evangelos Venizelos : "Now is the critical moment for the final battle." Has he got them on the run?? As we know, Greece's "Ace-in-the-hole" is their ability to simply say " OK, guys!  That's it!  We're defaulting on the whole lot!!" In that scenario, the only winners would be the Hedge Fund boys who would simply call in the Credit Default Swaps and then go to the pub.

10:51 am PORTUGAL: It is surprising that not too many people appear to be paying attention to Portugal's economic woes, with the focus remaining firmly on Greece. Last week's S&P downgrade of  Portugal to junk status means that its borrowing costs are now sky-high and unsustainable. Nevertheless, economically, Portugal remains under the radar. The free-market government of Pedro Passos Coelho is also a big fan of over-sharp fiscal cuts. That particular strategy is looking more and more self-defeating and most likely to pile austerity upon austerity  - as has happened in countries far stronger than Portugal.

10:39 am Let us hope that neither our Prime minister nor the Chancellor starts the customary preening after the publication of the ONS December retail figures. UK retail sales figures showed a strong rebound as retail sales volumes rose 0.6% on the month to give an annual rise of 2.6%. The December rise is directly as a result of the pre-Christmas give-away. Retailers were slashing prices by up to 75% in order to keep their cash-flows going. Profit was certainly a secondary consideration and that is exemplified by the number of retailers who are now going to the wall. No doubt, someone somewhere will claim that the excellent December retail figures are somehow a vindication of the United Kingdom's austerity measures. Nothing could be further from the truth. It was no more than a seasonal flash-in-the -pan.

Spygun Snapshots for 17 January, 2012

4:17 pm After that December 2011 European meeting during which British Prime Minister David Cameron flounced out, several decisions were taken. In future, automatic sanctions will be imposed on countries with a large deficit, unless the sanctions are vetoed by a "qualified" majority of member states. Countries with excessive debt will be required to lodge and deliver detailed reform agreements agreed with the European Commission. Any country failing to adhere to the new requirements may be prosecuted at the European Court of Justice. All sounds very regimented and inflexible. Almost Germanic.

4:03 pm Sarkozy's obsession with a financial transaction tax will continue until he has introduced the tax in France - perhaps unilaterally. Today he said: “I say financiers should have to pay tax, and a group of leading countries should adopt it to encourage everyone else to do it as well.” Sarkozy would do well to remember that it is the "financiers" who will end up digging him and the rest of the Euro Gang of 17 out of their current mess. Or does he still imagine that he can extricate himself and France out of the crisis through increased taxation? Plus, one hopes that he recalls his speech a year ago in which he earmarked the financial transaction tax as a source of funds for the fight against poverty and to improve the environment. http://buswk.co/sRYwWj

3:21 pm HERE'S A LESSON IN "ECONOMIC GRAVITY":  Austerity reduces economic growth. Reduced economic growth reduces tax revenue growth because of decreasing earnings and increasing unemployment.  Reduced tax revenue growth worsens any budget deficit problem.  A worsening budget deficit problem results in more government borrowing  which eventually  makes economic growth impossible. So what does the government do? It introduces even more austerity and the cycle repeats.

3:03 pm Quantum Hedge Fund boss Jim Rogers on the Eurozone crisis: "The best way to get out of it is to go ahead and to let people go bankrupt, let the people who made mistakes take their losses, the banks who made the bad loans, the people who invested in the bad banks – they should take their losses and start over."

3:00 pm  Last December the CPI was 121.7. It rose from 121.2 in November. Nevertheless, as is customary, the government is booking a DECREASE from 4.8% to 4.2%. Why doesn't the Government simply publish the CPI Index? It's a ridiculous situation when prices are going UP but the official figures show that inflation is on the decrease.

2:55 pm  Leveson Inquiry, from Ian Hislop: "If the state regulates the press, then the press can no longer regulate the state! "

Spygun Snapshots for 16 January, 2012

9:33 pm Trouble ahead or is  Germany's Der Speigel making mischief? They report that an internal IMF memo says that Greece's economic free-fall has made international lenders’ plans obsolete.

9:26 pm Credit rating companies Standard & Poors,  Moody's and Fitch are beginning to behave more and more like an extension of the United States government policy department.

9:23 pm Quantum Hedge Fund boss Jim Rogers said today: "........you should not bother to pay any attention to the rating agencies. Everything they have done in the past 15 or 20 years has been wrong" and on the Eurozo0ne crisis: "The best way to get out of it is to go ahead and to let people go bankrupt, let the people who made mistakes take their losses, the banks who made the bad loans, the people who invested in the bad banks – they should take their losses and start over." Sensible guy!

9:16 pm Both the farce and subjectivity of the American credit rating companies have been confirmed today. Moody's has left France's rating untouched at AAA.

9:09 pm Today, the markets have been comparatively calm - even after the massive downgrade-fest by Standard and Poors. Could it be that S&P has cried "Wolf!" once too often and has now been consigned to the role of  an irrelevant pantomime villain?

8:56 pm Eurozone: Very little news being handed out. Cliché , platitude and metaphor shortage? Whatever the reason, it is good of Euro politicians to keep a low profile for a few days. Could they have finally realised that the markets are much more stable when they hear nothing?

8:50 pm Watching a recording of the red carpet pre Golden Globes nonsense. What an amazing exercise in mindless superficiality. Just watched Brad Pitt and Angelina Jolie arrive. They really do believe that they're Royalty - without the class. "What are you wearing?" is the question. The answer has to be the name of a couturier. Incredible little ritual. Here in the UK, that type of question would seem incredibly rude and common.  Elle McPherson was just asked how she keeps so trim. Horseriding and water-skiing. Fatuity personified.

Spygun Snapshots for 14 January, 2012

10:03 pm Did Greek debt start on Wall St? Goldman Sachs  made Greek  derivative deals 10 yrs ago and wrote its debt off balance sheet. Any other American Banks still hiding stuff?

Spygun Snapshots for 3 January, 2012

8:55 am Pushy self-publicist, chick-lit pulp fiction writer, and MP of 20 mths @LouiseMensch (who has NOT had plastic surgery!) wonders why she has not yet been promoted to (at least) a Junior Ministerial post. She is what passes for Tory totty these days and obviously feels that being on the telly and asking the Murdochs a few questions on the telly, followed by being on the telly should be enough. The scary thing is that she COULD be right! Mrs Mensch , before becoming a Cameron Cutie had been a member of New Labour, maybe with aspirations  to Blair Babedom ?

7:53 am Germany's Chancellor Merkel ended  2011 as she means to carry on during 2012. More fine words: "The road to overcoming this won't be without setbacks, but at the end of this path Europe will emerge stronger from the crisis than before." She reiterated that her government will do "everything" to bring the euro out of the slump. However, there were no specifics. There's is only ONE definite. There will be LOTS of meetings.

Spygun Snapshots for 24 December, 2011

1:19 pm The ECB's donation of  €489 billion in 1% loans to Eurobanks will achieve NOTHING except maybe buy a couple of months of valuable time while the next Euro Ponzi Scheme is designed.

1:16 pm PricewaterhouseCoopers is expected to be fined up to £1 million in respect of seven years of auditing JP Morgan Securities. Next time, don't send juniors to carry out the audit!!

1:14 pm The lingerie chain La Senza and the gift retailer Past Times are both on the brink of administration , leaving thousands fearing for their jobs over Christmas. What a pair of tits!

1:10 pm Governor of the Bank of England,  Sir Mervyn King has used his position as vice-chairman of Europe's "early warning watchdog" to warn that the developing debt crisis is causing a dangerous "dependence on central banks". He's good!!

1:08 pm Lorenzo Bini Smaghi, European Central Bank executive board member, has called for “quantitative easing” to be used to boost the eurozone economy. Inevitable!! Especially as the alternative (economic growth) is not an option!

1:05 pm This should please Vince "Grinch" Cable. In lieu of the contentious annual City bonus, stockbroker  Daniel Stewarthas  pays its 57 staff,  a monthly "retention payment"  - equivalent to what their bonus for the year would be. Put that in your pipe............

12:59 pm Lloyds Banking Group has sold a portfolio of debt valued at more than £900m to Lone Star, a US private equity firm. Let's hope that they don't find themselves buying it back at some time in the future in a different-flavoured repackaged form!

12:58 pm Standard & Poor’s has risked further criticism after the ratings agency was forced to retract a ‘downgrade’ for the politically-powerful US investment bank Goldman Sachs.

12:56 pm The Dutch finance ministry has given its support to Britain’s efforts to prevent a financial transactions tax being imposed across Europe.

12:48 pm It is generally accepted that entrepreneurs create not-only wealth but jobs too. Unlike, corporate entrepreneurs - for example investment bankers -  who create wealth but NOT jobs. On the contrary, at the present time, they are contributing to a shrinkage of the workforce.

12:39 pm Not all rich people, for example, very successful bankers  - are bad people. There are £65K per year politicians who have done more damage to the economy that millionaire bankers.

12:35 pm According to CIA data, income inequality in the United States of America is greater than of China or Iran.

Spygun Snapshots for 23 December, 2011

5:19 pm The ECB's 1% bank-handout is a no-strings attached  dispersal of what really amounts to being public money. The Banks will  now make huge profits at no risk  , using the same market methods and motives that produced the crisis of debt, excess, and fear of Euro and sovereign failure in the first place. Hopefully, this will then not be followed by governments, lulled into a sense of false security, once again failing to provide control through regulation with increased bank and financial market transparency and accountability.  One can but hope.

12:30 pm Whenever there are modern protests, there are winners and losers. For instance , consider the tented village near St Paul's in London where they appeared to be protesting about those City scallywags and their unfeasible bonuses. The loser  is the Church of England and the winner? Millets.

12:10 pm Fed up with listening "Happy Xmas (War Is Over)"  by John Lennon. This is an 0ld melody called "Stewball the Racehorse" and  was NOT written by Lennon. To prove it, here is a version of the original by Peter Paul and Mary: http://bit.ly/ulZq8B

12:02 pm John Lewis, the big shop for nice people is doing exceptionally well and its profits have increased by about one fifth in the last 12 months. This was reported as an example of the economy perhaps not doing so badly after all!  Are the statisticians taking a leaf out from government's book and assuming that Socio-Economic groups  C2-down are best ignored for the moment? The A's have it!

11:57 am Just received a letter from my bank telling me that my free banking period on a business account is coming to an end. However, the account is being set to the Business Free Automated Transactions Tariff. This is accompanied by a menu indicating a list of charges. I never used to find the word "free" confusing. Does it mean something different in Bankworld?

Spygun Snapshots for 22 December, 2011

4:46 pm Today's positive activity on the markets further confirms the complete dislocation between stock exchanges  and the real world. The money which the ECB handed out to over 500 banks will NOT be used in order to purchase bad sovereign debt and the ECB knew that. The money will remain languishing on bank balance sheets.

4:20 pm With Iraq, it looks as if the Americans and Brits have pulled their usual trick. Reduced a country to rubble, installed a compliant puppet government, scored a few construction contracts and left the country in chaos. The first "BOOM" was heard only hours after the Americans arrived in Kuwait in order to prepare for the Iran sortie.

3:14 pm Looks as if Las Malvinas will need to be protected by this generation as well. Argentina cannot afford to be humiliated again - as it was in the early 1980s. Let the sabre-rattling commence. This time though, it is not a fight over a few bits of rock, fish and seagulls. There is talk of oil.

3:10 pm Eurolaw demands that from January 1st 2012, non-European airlines will have to buy permits which will enable them to pump lots of carbon  dioxide into the atmosphere. Any airline using a EU airport will be liable for the tax. Another European levy which will not-only increase the cost of air travel but create another Lawyer Bonanza as the ruling is challenged in the courts by USA, China and others. The Eurozone is becoming dangerous and cash-hungry. Its insatiable appetite for cash will no doubt help to find many other ways in which to relieve the global economy and its subjects of their earnings.

Spygun Snapshots for 20 December, 2011

12:16 pm Bank of America shares are at a nearly 3 year low and have fallen over 60% during 2011. Yesterday they were trading at below $5. The bank faces concerns about whether it has enough capital to absorb mortgage-related losses and meet new international standards.

12:13 pm Here's a radical idea for discussion. Instead of fiddling about with bank debt, the Government should wipe out all unsecured personal debt. Well, they want to stimulate consumers to consume! Too expensive? What's a few more trillion?

12:10 pm All that any government has to do is to limit the amount that banks can invest in Equities and other risky investments. Governments DO like to make a meal of it!

12:07 pm RBS shares continue to take a pounding. It would seem that the Investment Bank part is going to be downsized to about 50% of its current size. Thousands of job losses. Presumably they will be added to the Private  Sector statistics.

12:03 pm George Osborne continues what has become a quaint  pre-Christmas Treasury tradition, begun by Gordon Brown. He has called for "restraint" on bank bonuses. Does anyone know what "calling for restraint" actually means? Does it have any basis in law?

Spygun Snapshots for 12 December, 2011

5:04 pm For the banks, it's been Slightly-Grey Monday - with Lloyds down 8.57% and RBS down 6.5%.  A combination of profit-taking after last week's silliness and a slowly dawning realisation that  last week's Euro jamboree has not really contributed much to events, unless of course, you're a Brussels caterer or wine merchant.

Spygun Snapshots for 1 December, 2011

4:42 pm  Today, European stock markets have veered between losses and gains , a day after a central-bank-induced rally, with investors eyeing mixed results from Spanish and French bond auctions and a downbeat survey of the region’s manufacturing sector. China also lent a hand by cutting the reserve-ratio requirement for its banks. However, the almost hysterical upswing in the markets once again confirmed the dislocation between the Markets and the Economy. Today, the Markets remained more-or-less flat and a "wait-and-see phase" appears to have kicked-in.

3:36 pm "Well, he would say that wouldn't he": Tom Horton, the Chief Executive of American Airlines, insisted a £24.7 billion order for 460 aircraft from Boeing and Airbus is "rock solid" despite filing for bankruptcy protection.

3:34 pm Prime Minister David Cameron will today herald plans by the coffee chain Starbucks to create 5,000 new roles as evidence of job creation in the private sector. Clutching at straws?

3:33 pm The European Commission’s plan to break up the four biggest accountants - PwC, Deloitte, Ernst & Young and KPMG - would also oblige them to rename large chunks of their businesses.

3:32 pm Politicians as entrepreneurs. The British government will have to sell its stakes in the part-nationalised banks Royal Bank of Scotland and Lloyds Banking Group for an £8 billion profit if it is to recover the full cost of the financial sector bail-out. ( From the Office for Budget Responsibility).

3:31 pm SIGN OF THE TIMES? Stockbroker Panmure Gordon has issued a profit warning as the market turmoil in Europe and the US has delayed a number of key investment banking deals, dragging its shares to an all-time low of 11 pence - down 19%.

3:30 pm Lately, we've been hearing that London is the centre for financial transactions. However, about a quarter of blue-chip stocks traded on the London Stock Exchange are being processed in Switzerland once deals are agreed, double the level of only two months ago; the shift to Swiss processing of share sales comes after a new clearing arrangement kicked in across European markets.

3:27 pm Britain's Revenue & Customs has launched a High Court battle that could prevent football clubs and their employees being paid ahead of other creditors if a football club becomes insolvent.

3:25 pm Yesterday, European leaders were  told by EU finance commissioner Olli Rehn that they have just ten days to save the single currency amid warnings that meltdown would trigger a brutal recession in Britain. That leaves just NINE days - although, one suspects, that Mr Rehn's figure of 10 days was purely arbitrary.

3:22 pm The US Federal Reserve slashed the rate it charges the European Central Bank for short-term dollar loans from about 1.1% to about 0.6% in a co-ordinated move with other central banks to avert a liquidity crisis in Eurozone; the action cheered markets but highlighted the depth of international concern about possible economic turmoil in Europe. There have been rumours that the primary reason for the intervention was an imminent collapse of a major European Bank.

Spygun Snapshots for 30 November, 2011

3:01 pm There is a lot of money in Greece but not all of it is in the right place. How about a similar drive to those in Belgium and Italy where there has been a substantial take-up of government bonds by patriotic private individuals? The yields should make Greek Bonds VERY attractive to all those upper-class professional people who are hoarding slightly too much cash!! Thank you, doctor!

2:55 pm Italy is also going straight to the consumer!! In Italy the first “BTP day” (government bonds day), was held on 28 November and was a major success in the drive to combat speculation. With yields of more than 7%, the three and ten-year bonds offered attractive terms, and the initiative was facilitated by the banks’ decision to cut commission costs. “The goal is to send a strong message of commitment,” commented the Italian bankers association (ABI), quoted by the Milan daily. The purchase of bonds by private individuals "can be seen as an important demonstration of the confidence Italians still have in their country." A further “BTP day” is planned for 12 December.

2:50 pm Belgium is cutting out the middle-man! The Belgian government, which has had to contend with an abrupt increase in the cost of obtaining finance from the markets, launched a well-advertised campaign to sell government bonds direct to the country’s population.

1:58 pm Looks as if the Public Sector Workers Strike is, in fact, a bit of a "Strike-Lite".  By all accounts, the strike is not living up to its pre-publicity and billing. Many are probably doing their Christmas shopping. Surprisingly, the anticipated disruption in places such as Heathrow has not happened.