Category Archives: Finance

There’s a government reshuffle coming up. Rumour has it that a primary candidate for the cull will be one of the Conservative Party’s most gifted and brightest Ministers, David Willetts, currently Minister of State for Universities and Science. On this occasion, it will not be a simple case of “The light that burns twice as bright burns for half as long“.  Willetts has the “DC Double-Whammy” against him: He supported David Davies in his bid for the Party leadership and he is not an Old Etonian. It’s not WHAT you know but WHO you went to school with.  (The other very sad fact which doesn’t help Willetts’ cause is that in this superficial media age , Willetts is a bit of a spud.)

NYSE Euronext is to take over the setting of LIBOR benchmark interest rates. Presumably, what we haven’t handed to Europe, we’re going to hand to the USA. The British Bankers’ Association which used to be in charge has been paid the princely sum of £1 in return for handing over LIBOR. However, LIBOR will continue to be regulated by the UK’s Financial Conduct Authority. Let’s hope that they’re not caught dozing at the wheel again. Meanwhile, we’re all still wondering WHO is going to be jailed for the LIBOR FRAUD.

So the European Court of Justice Star Chamber feels that killers should NOT be given “Whole Life” sentences because it is detrimental to their dignity and their Human Rights. There IS a solution which would not involve any more expenditure on lawyers and WOULD  preserve the murderers’ dignity. Hang them!…..(Please….no messages of compassion from bleeding heart liberals. Thank you.) This COULD be the straw which broke the European Camel’s back!

Unsurprisingly and predictably, there’s a rift in Europe over how best to control its banks. This raises questions as to how far the bloc is prepared to go in setting up a new agency to close stricken banks. As usual, there are meetings which always seem to stop short of any action. The problem is disarmingly simple: In order to close any bank, a new European Agency would HAVE to brush aside the NATIONAL authority, such as our FCA or our Bank of England, which governs the bank.

The British government is still awaiting the shift to an export-driven economy which it promised. Manufacturing shrank in May at its fastest pace since the beginning of the year and the trade deficit was at its widest for SIX MONTHS. Nevertheless, the government continues to be comforted by surveys which indicate “increased business confidence”. Chancellor Gideon’s words from 2011 when he spoke of “a Britain carried aloft by the march of the makers” continue to sound a bit hollow.

Egypt’s interim rulers have been given a $3 billion cash lifeline by the United Arab Emirates. Just ONE DAY after 55 President Mursi protestors were shot by troops. It now seems clear WHO the UAE is supporting.

The IMF has lowered its global growth forecast for the FIFTH time since the beginning of 2012. The “HIGHER/LOWER THAN EXPECTED (Delete as Applicable)” disease is universal!


After his showboating when questioning the Murdochs, it was only a matter of time before the deluded Tom Watson’s career stalled. He’s been under several magnifying glasses for a while. By the way, isn’t it time that Labour rebranded again ? NEW LABOUR never really worked after Tony Blair handed over to the Absent One to carry the can for the unraveling economy. UNITE would be an excellent choice!

Hopefully, Chancellor Gideon is not leaving the rescue of the British economy to the Bank of England’s new Governor. We still need some proper policies which will encourage commerce ………specifically SMEs. The hint of no interest rate rises for the next couple of years sets the scene. It does NOT solve the problem

It was good to see the new Governor, Mark Carney make such a positive start at the Bank of England’s Monetary Policy Committee. It was also reassuring to realise that he and his old Goldman Sachs chum, the ECB’s Mario Draghi appear to be talking to each other. Hopefully, market borrowing costs will now go down after rising as a result of the Fed’s Ben Bernanke hinting that the American QE programme was in jeopardy. It was good to see that Mr Carney is not one for pulling interest-rate rabbits out of the BoE hat. That gives everyone the opportunity to plan ahead – which makes a nice change after so many years of crisis management…….. An A* beginning.

Mark Carney, the new Governor of the Bank of England is not used to Management by Committee. How long before the BoE Luncheon Club, AKA the Monetary Policy Committee is disbanded?

Welcome to the new Governor of the Bank of England, Mark Carney. Probably “interviewed” by Chancellor Gideon at the 2012 St Moritz Bilderberg Conference (they were both there). He brings not only his experience as Governor of the Bank of Canada but 13 yrs at Goldman Sachs. So, It would seem that Goldman Sachs has finally completed its economic take-over of Europe and the European Union.

Mervyn King alone cannot be blamed for the handling of the banking cock-up of 2008. He and his MPC were so tightly focused on interest rates that they didn’t even notice the dark clouds forming out of those investment instruments derived from bad debt.  They were as oblivious as the FSA. Mind you, the FSA wouldn’t have recognised a dodgy Credit Derivative if it sat on its face shouting “I am a CDO and I’m going to screw you!”

When you think about it, any Government, in common with the Mafia has only FOUR ways to fund itself: 1. EXTORTION via the medium of Taxation. 2. CREATING virtual cash  (Quantitative Easing)  3. BORROWING  4. EXTERMINATION (Culling employees). When a government is forced to employ ALL of these methods PLUS it withholds cash from the country’s most disadvantaged, you KNOW it’s in trouble.

Today is Mervyn King’s last day at the Bank of England. My only criticism of him – apart from his apalling mepaphors and the fact that he never delivered an accurate forecast and that he spent too much time ruminating about interest rates, is that he is TOO NICE. It was good to hear him continue with those appalling metaphors during his last speech:  He said that his tenure as Governor was “A game of two halves……….Full of incident, with a red card or two and a passionate and at times justifiably angry crowd.” He omitted to mention that the bankers had nicked the f***** ball! A long and happy retirement, Merv.

Today’s “No shit, Sherlock?!” moment is from Greek Premier Antonis Samaras “Unemployment in countries like mine has sky-rocketed”

The Surgeon league table will be published HERE later today. Think of it as the “Dewhurst Scale”. Surely, a good surgeon is merely one who has approximately the same number of patients going under the knife compared to those returning home with a pulse.

UK Courtrooms to be fully digital in three years. Today’s price? £160 million. Hacker Heaven. The government’s record on IT is not great, either from a cost or implementation point of view so the next few years should be interesting. NOTE: Yet another project for 2015/2016.

Government number-crunchers say that Britain did not after all, suffer a double-dip recession early last year…. but at the start of 2013,  household living standards did suffer their biggest drop in a generation.  The current account deficit widened to 3.6% of GDP and business investment slumped by a huge 16.5% – and that is in spite of various reports and surveys indicating “positive sentiment” in the business community. Apart from clearly indicating that the Coalition government’s economic policies are not working, the figures suggest that the Bank of England will have no choice but to restart its Quantitative Easing programme and so further inflate prices and continue to provide a “faux stimulus” to the equity markets.

Anyone else beginning to think that Nigel Farage is right and perhaps we SHOULD start to plan a post-EU future for the the United Kingdom? Or wait until 2015/16? It’s all the rage, you know! EVERYTHING is going to happen in 2015/16.

TIMING: It is no coincidence that the government has announced a doubling of the Shale Gas volume estimate so soon after the Chancellor’s statement. They’ve known about it for months. But why did Chancellor Gideon choose yesterday to announce his cuts and infrastructure initiatives? After all, they’re not going to start until 2015/2016, so he could have waited until next year. It’s all to do with allocating as much time as possible to winding-up Labour and their (current) leader, Miliband Minor in anticipation of Labour coming to power in 2015. Politics!

Today’s “No shit, Sherlock?!” moment is from a regular contributor – the ECB’s Mario Draghi: “….governments and parliaments need to do all they can to raise growth potential.”

Way back in 2008, I asked a very simple question: Did our own “Troika” of Gordon Brown, Alistair Darling and Mervyn King simply accept the banker’s figures when they requested bailouts? Was our government “spooked” into handing over BILLIONS merely on the word of a banker or two? Having heard the tape of those Irish bankers talking about having invented figures…..could it have happened here…and there…and everywhere? SURELY, when and because the figures were measured in BILLIONS, there would have been some attempt to verify the bailout requests – or was it yet another case of  Due LACK of Diligence? ……….(The amount of bailout money handed to the banks in 2008 was calculated as follows: The FSA established what a bank’s safe capital level should have been, in excess of the Basel Accord (a formula based on assets, capital and risk which establishes a capital asset ratio).  THIS was the simple subtraction that was carried out : the difference  between the Basel Accord calculation and what the FSA  had established as the safe capital level.)

EUROZONE: There’s tittle-tattle about Italy having manipulated its debt in order to satisfy the conditions for joining the euro! Apparently, derivatives trades were used to hide its deficit! (You know, the sort of thing that the banks continue to do!) So Greece, with the connivance of Goldman Sachs weren’t the only ones who were very naughty! One may be forgiven for wondering how many other euro states did the same thing. Italy to seek a bailout before the year-end, I reckon.

A new government cancels infrastructure projects in 2010 on the basis of “unaffordability”, then in 2013 it announces some of the cancelled infrastructure projects are to begin in 2015/16 – thus ensuring that NO major infrastructure projects are in place during THIS parliament. In the same way, this government “removed” public sector jobs in the first three years of its tenure and then claimed that it “created” 1.2 million private sector jobs. In reality, the unemployment rate has been “flat” at 7.8%, whereas the number of unemployed people has risen during this parliament from 2.47 million to 2.51 million. That’s an INCREASE.<<<<<< (That’s for the benefit of any politicians reading this.)

Does ANYTHING exemplify the  lack of depth in our senior bankers more powerfully than the fact that the Chancellor was unable to find a single person in the United Kingdom with the talent to take over as Governor of the Bank of England? Or was it simply a question of no-one being able to afford the salary drop?

SNOWDEN THE SNITCH: One wonders what Uncle Sam would do if a Russian whistleblower did to Russia what Snowden did to the USA….. and then flew to the States and  hid in say, Washington. Would the Americans extradite the Russian “spy” back  to Vlad Putin and his band of Kremlin funsters? I don’t think so! The Americans would pump so much information out of him that he’d need to be reflated. Then he’d disappear – probably to a small town in the Midwest with a pension-for-life! HERE’S  what Uncle Vlad says: http://world.time.com/2013/06/25/putin-says-no-to-u-s-request-to-extradite-snowden/

Boris being very entertaining on the subject of Global Warming HERE. Does anyone REALLY know why GW continues to be so demure? We’ve been trying to coax it out for several years now, even taking the pressure off it by moving from “Man-Made Global Warming” to plain old “Global Warming” to the now generally accepted but ambiguous “Climate Change”. Many believers built swimming pools or white-painted and rendered French-style brick barbecues in anticipation of the promised “Climat Méditerranée”. I even bought a house on a hill to save my family from the rising sea level and took up with la  fée verte and that rude sign with the forearm !! Someone has to pay!

Today, Chancellor Gideon said: “Britain’s economy could fall back into crisis if the government abandons its austerity programme.” …………….What does he mean by “fall back“?

Obama is going to tackle climate change. Because Congress refuses to play ball, he is to introduce a series of “executive actions” which will bypass the legislature. What’s next, one wonders….A War on Gravity? What’s that I hear you say? It’s a natural phenomenon which has been around for 4.5 billion years? HERE is the Earth’s temperature cycle over the last 400,000 years.

Patient Banks.

Have you noticed that almost imperceptibly, the world has split along a 2008-weakened fault line. It is now a world of two halves. In 2008, governments rushed to the aid of their sick banks and five years later they’re still at their bedside. Like a bad parent who gives too much attention to one child, most of the politicians’ thoughts remain with the banks while we languish “Home Alone”.

The rest of us continue to feel like an organ donor being kept alive – but only just …….for no other reason than the benefit of the sick patient. At any moment there may be yet another call for a cash transplant but increasingly, it seems as if the patient’s needs are without end.

One thing we do know for sure is that the bond between politician and banker is now so profound that the politician would even sacrifice himself  before he would even consider turning off the life support.

The Coalition Government’s latest hare-brained scheme is to pool company pensions with the “rationale” of saving on costs. The last thing we need is for government to involve itself in private sector pensions…..You never know what might happen to them! Read the Reuters Report HERE.

Eurozone cross-border lending between banks has fallen again and is now about the same rate as fifteen years ago, when the single currency was first launched. They just don’t trust each other. Currently, they’re not-only unhappy about lending to each other but they’re even unhappier about lending within their own domestic markets. Banks say that they’re deleveraging. That should increase the importance of stable retail deposits and proper securitised lending but even that is against a backdrop of  Capital Flight – especially from Spain.  The European Central Bank continues to make positive noises in order to induce some sort of confidence but ECB liquidity is no remedy for dysfunctional markets and undercapitalised banks. The whole edifice continues to balance on a knife edge. Events such as one wrong move from Greek politicians or even a political implosion in Turkey could have catastrophic consequences. Meanwhile Eurozone politicians warm themselves with talk of “improving sentiment”. Inter-bank trust will NOT return  before banks’ balance sheets are cleaned up. However,the longer this takes, the harder it will be for cross-border banking to re-emerge.  The so-called “rebuilding bank balance sheets” is now entering its sixth year, with no end in sight. Did someone say “Banking Union”?

Fed chairman Ben Bernanke has just reversed the recent stock market rally, whilst simultaneously giving the gold price a good kicking. THAT’S what a falling dollar does! After the recent orgy of QE, equities will need to spend some time “cold turkey”, whilst markets try to adjust to dealing with real money! Whatever next!! (All he said was that said that the US central bank’s policy committee “currently anticipates that it would be appropriate to moderate the monthly pace of purchases later this year”!!) Mind you, currently, they’re purchasing at the rate of $85 billion per month…..and we were thinking that the dawn would never rise on this party!!

It’s not going to get any easier for Chancellor Gideon (aka Jeffrey) as the United Kingdom’s borrowing costs go up. This morning, interest rates on UK government debt (gilts), jumped to above 2.4%,  the highest level since August 2011, well above the 1.7% level the 10 year bonds were at at the time of the Budget and the highest for two years. The rise in Government borrowing costs, which was reflected on European debt markets as well, has also caused stock markets to dip.

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!)

The Lough Erne Declaration: You SHOULD enjoy it.

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:

  1. Tax authorities across the world should automatically share information to fight the scourge of tax evasion.
  2. 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.
  3. Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.
  4. Developing countries should have the information and capacity to collect the taxes owed them – and other countries have a duty to help them.
  5. Extractive companies should report payments to all governments – and governments should publish income from such companies.
  6. Minerals should be sourced legitimately, not plundered from conflict zones.
  7. Land transactions should be transparent, respecting the property rights of local communities.
  8. Governments should roll back protectionism and agree new trade deals that boost jobs and growth worldwide.
  9. Governments should cut wasteful bureaucracy at borders and make it easier and quicker to move goods between developing countries.
  10. 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.

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.

Eurozone Risks Return to Fore

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.

imageReuters

A climb in Greek bond yields reflects renewed euro-zone caution.

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.

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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.

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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.”

Stephen Hester and Google.

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!

SHOULD

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.uk/richard-ruzyllo/the-mess-we-were-left-yawn

Nige!! Are YOU the New Messiah?

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.

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.

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!

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”.

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”.

Booze for Solar Panels!

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.

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!

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.

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…

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.

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.

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.

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.

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)

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.

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……

USA – Ben Bernanke says that the Fed’s bond buying programme (“QE Infinity”) will continue because the job market is still weak. USA unemployment: 7.5%. UK Unemployment? At least 7.9%.

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…. 🙂

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%.

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!

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.

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.

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!!

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!!

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.

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!)

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!

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?)

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?

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

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.

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

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

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

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.

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.

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.

barclays agm

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!

accountants

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”…  🙂

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?”)

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.

UKIP candidate (draft)

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!

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……

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.

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!!!

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.

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

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!’ “

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.

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!

(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)

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….