Tag Archives: Quantitative easing

Those Teflon Banks.

If the economy was purring along, companies were forming and not going bust, banks were lending properly (not statistically) and the government didn’t regard any GDP growth above zero as an achievement, most of us would not have any problem with those banker salaries and bonuses.

However, it is not sunny, manufacturing is down and we have a government which appears to be indulging in “Government by Accounting” as an increasingly panicked Chancellor justifies Welfare Butchery (in a newly-acquired Estuary English accent), to an assembled band of Morrison’s workers.

Meanwhile, senior bankers continue to pay themselves more than many of the largest and most successful corporations (the ones that make and export stuff).

As Chancellor Gideon might say these days: “Something ain’t right, innit?”

Since the largely-forgotten catastrophe of 2008, the incomes of many bank directors have increased by up to 60%!

So what else has happened to the banking industry since those far-off days? Oh yes………..they’ve had bailouts totaling BILLIONS, they have mis-sold an array of financial products and the Bank of England has handed-over BILLIONS  in Quantitative Easing for a variety of reasons, ranging from the perennial “rebuilding of Balance Sheets” to “Lending to Small and Medium businesses” to “Increased Mortgage Lending” ……(Notice I have placed those increasingly creative QE euphemisms in inverted commas!).

Admittedly, the effect of credit defaults on the banking system leading to those 2008 issues was devastating but the problems were self-inflicted and a direct result of the banks’ reckless leveraging with financial instruments, such as mortgage-backed securities and credit-default swaps.  Virtual money……just like Quantitative Easing.

The final straw should have been the LIBOR-fixing scandal…but the Quantitative Easing meant that the banks could easily afford the fines and legal settlements and still maintain those eye-watering incomes.

That wouldn’t be so scandalous if it were not for the fact that LIBOR is used to determine interest rates on student loans, mortgages and many other lending vehicles — and was “adjusted” in whatever direction benefited the banks’ bottom lines and the  resultant profits upon which many of those bonuses were based.

The question is – what do the banks have to do in order to stop being the government’s poster boys?

They certainly do not have the confidence of the ordinary investor, because , let’s face it, they don’t really NEED savers and depositors because they can either make cash by “adjusting” and then plundering the equities and bond markets or be given it by indulgent and clueless governments. Small businesses are wary of them because they (quite rightly) fear being ripped off.

There will be further scandals, more fraud, more “faux-outrage” from government Ministers but no meaningful legislation, culture change or reorganisation.

They are truly The Untouchables.

Gideon’s latest Wheeze!

Various half-arsed stimulus packages by clueless governments without properly jump-starting their economies achieve nothing but a postponement of the day of reckoning.

Banks will fail, more housing  markets will collapse and panicked governments will attempt to raise taxes from the survivors as they borrow even more in a vain effort to create yet more economic stimuli.

Today, in the UK, after Project Merlin (“a great success!”), the National Loan Guarantee Scheme (“a great success!”), we have the launch of the Funding for Lending scheme.

This latest scheme, is potentially worth £80 billion but to the trained eye, looks suspiciously like rebranded Quantitative Easing.

This scheme , like most “schemes” promises no economic outputs or goals and the wording is very interesting (and flabby):

Funding for Lending aims to encourage banks to lend to both businesses and households”.

It “aims to encourage”.

Give it a rest, Gideon.

Might as well make it £200 billion, Merv .

“WTF ???!”

Below is the statement issued yesterday by the Bank of England’s Monetary Policy Committee. It defies comment because it runs out of facts after Line 2 of the first paragraph.

Paragraph 2 is no more that the usual retrospective “No shit, Sherlock” statement which has become the Bank of England’s trademark.

Within the statement, I have highlighted the words which give a clear indication of the overall  wishy-washy tone which Mervyn King and the Monetary Policy Committee have made their own.

The £75 billion which is being pumped into the system is more-or-less an arbitrary figure and  purely cosmetic  – because it was deemed time for someone to take action.

Why Quantitative Easing? Because this is the only item remaining in the monetary toolbox.

Politicians and Central Bankers are out of ideas. This latest initiative is the Bank of England’s own version of Pin the Tail on the Donkey.

An increasing number of individuals who understand the mechanics of the global economic system agree that we are rapidly approaching a time when governments should simply guarantee bank customers’ deposits and allow certain banks to finally fail and introduce a more direct form of QE to stimulate production and encourage consumers to consume.

Attempts to stimulate an economy by filtering cash into moribund banks merely pushes the recovery horizon further into the distance.


MPC STATEMENT 6TH OCTOBER 2011:

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to increase the size of its asset purchase programme, financed by the issuance of central bank reserves, by £75 billion to a total of £275 billion.

The pace of global expansion has slackened, especially in the United Kingdom’s main export markets. Vulnerabilities associated with the indebtedness of some euro-area sovereigns and banks have resulted in severe strains in bank funding markets and financial markets more generally. These tensions in the world economy threaten the UK recovery.

In the United Kingdom, the path of output has been affected by a number of temporary factors, but the available indicators suggest that the underlying rate of growth has also moderated. The squeeze on households’ real incomes and the fiscal consolidation are likely to continue to weigh on domestic spending, while the strains in bank funding markets may also inhibit the availability of credit to consumers and businesses. While the stimulatory monetary stance and the present level of sterling should help to support demand, the weaker outlook for, and the increased downside risks to, output growth mean that the margin of slack in the economy is likely to be greater and more persistent than previously expected.

CPI inflation rose to 4.5% in August. The present elevated rate of inflation primarily reflects the increase in the standard rate of VAT in January and the impact of higher energy and import prices. Inflation is likely to rise to above 5% in the next month or so, boosted by already announced increases in utility prices. But measures of domestically generated inflation remain contained and inflation is likely to fall back sharply next year as the influence of the factors temporarily raising inflation diminishes and downward pressure from unemployment and spare capacity persists.

The deterioration in the outlook has made it more likely that inflation will undershoot the 2% target in the medium term. In the light of that shift in the balance of risks, and in order to keep inflation on track to meet the target over the medium term, the Committee judged that it was necessary to inject further monetary stimulus into the economy. The Committee therefore voted to increase the size of its asset purchase programme, financed by the issuance of central bank reserves, by £75 billion to a total of £275 billion. The Committee also voted to maintain Bank Rate at 0.5%. The Committee expects the announced programme of asset purchases to take four months to complete. The scale of the programme will be kept under review.


THIS is yesterday’s  letter from the Governor of the Bank of England to the Chancellor of the Exchequer. Perhaps the letter-writing ceremony, together with ribbons on MPs’ coathooks into which they can hang their swords, ought to be consigned to the poubelle of history!

This statement about the British: ” Crap food but such LOVELY manners” should be rewritten: “Crap economic policy but such LOVELY letters and statements”

Go for Gold!

Eighteen months ago, I predicted that during 2011, gold would hit $2000 per ounce. So far, it has I topped-out at just over $1900 and then pulled back to about $1750

There was a 10% price drop in three days! That appears to have frightened some but has also done a lot of good because gold has been hugely overbought in the last few months and was due  a correction.

This correction is likely to continue to well below $1500. I am therefore no longer predicting $2000 per ounce.

It will rise to above $4000!

Within a few months, Ben Bernanke’s “do nothing , wait and see” policy will no longer be viable and the American economy will begin to crumble, closely followed by a mega-slide in Euro stocks.

At that point, those who do not become jammed in the exits will once again rush for gold – at the point when Bernanke and other Finance Ministers begin to oil the money-printing presses for more empty Mickey Mouse “quantitative easing” money!

Although we  are already in a Bear Market, there will still be unexplained rallies, falls and adjustments but thanks to politicians who have lost the art of decision-making, gold is still the way to go.

p.s. this is a fitting time to once again pay tribute to our former Prime Minister, Gordon Brown.

THIS is what he did!

States of the economies.

The next economic and banking collapse is going to make the 2008 crash look like a slight adjustment.

Once-powerful Western economies are booking  quarterly GDP growths of 1% or less. For the non-mathematicians, that is within a rounding error of ZERO growth. So when you hear a Chancellor deriving solace from an economy achieving  a growth of say 1.5% which was “better than the expected” 1.3%, we know that they and we are in trouble.

Politicians and central bankers have exhausted their entire repertoire on a THREE YEAR attempt to put their economies in order whilst at the same time propping-up a broken banking system. None of it has worked!

They all know that the tsunami is coming but there is no high ground to run to.

European politicians are rushing about, turning inaction into an art-form whilst economies and banks  are merely standing on the trapdoor and holding hands hoping that somehow all this will go away and the entire system will somehow self-right. Their impotent prevarication can (and will) only result in two things – collapse and bankcrptcy.

Bankruptcy of governments, business and of private individuals.

Last week we had the very first example of a banker who more-or-less threw-in his hand, admitting that there was little-else that money could do. The Federal Reserve’s Ben Bernanke had the choice of either printing more empty dollars or not. The so-called Quantitative Easing 3 would have increased US inflation and made Investment Bankers happy. It would have enabled the bankers to further plunder the markets and create more of those illusory profits. They’ve been operating on that basis for two years now and perhaps Bernanke decided that enough was enough.

Mainlining money is never the long-term solution – it’s too addictive!

However, No U.S  Quantitative Easing   has simply accelerated the collapse of the United States economy.

Yes! It’s as clear-cut as that.

In the end, Bernanke took a leaf from the politicians’ book and decided to do nothing but sit and wait. NO mention of QE3 and no steps to promote economic growth.

He has decided to kick the the whole thing forward yet another month in the vain hope that Congress can deliver the next promise. THAT’S what you call a long-shot!

For the moment both Europe and the USA appear to be quite content to pause and doze in the middle of their joint economic tightrope until someone else (as yet unknown, probably China) comes along to coax  them out of their torpor.

Unfortunately, America and Europe are entwined in such a way that if Europe falls, so will the USA.

We used to dismiss the  PIIGS nations as the ones heading for the econo-slaughter house — Portugal, Italy, Ireland, Greece and Spain.  Their problem is very simple – they have debts so huge that there is absolutely NO prospect of them ever being repaid.  Their politicians  are also waiting for something miraculous to happen sometime in the future.

The Euro saviour WAS supposed to have been the “strong man of Europe”, the one with the largest economy – Germany. Unfortunately,Germany has also hit the economic buffers. It’s growth in this year’s second quarter was  just 0.1 percent!

France, Europe’s second-largest Euro-economy, has also ground to a halt. President Sarkozy’s has followed the UK route with huge budgetary cuts. That certainly looks good on paper and may lower deficits  but will  produce an  impossible drag on an already-waning economy. THAT will inhibit growth and ultimately lower tax revenues – which will inevitably result in higher taxation.

The United Kingdom’s Chancellor can take the credit for showing everyone else the way to economic stagnation through the triple whammy of  Government budget cuts, rising inflation and plunging consumer confidence. EXACTLY the conditions to discourage anyone from risking any sort of entrepreneurial initiative or borrowing from the banks to fund commercial expansion. That is, if the banks weren’t continuing to sulk.

Europe is frantically cutting spending in a desperate attempt to postpone the inevitable debt meltdown. Meanwhile  Washington continues to rack-up up its national debt at the eye-watering rate of more than 10 percent per year.

All that America has achieved so far is to have its credit-rating slashed by Standard & Poor’s while its local governments, states and cities frantically try everything from releasing prisoners early to selling off the family silver.

The ENTIRE Western economy has ground to a shuddering halt with the weird unwanted bolt-ons of climbing inflation and consumer confidence at near an all-time low.

So what IS the solution?

The solution is comparatively simple and should be attempted in stages.

The first would be to reconcile ALL sovereign debt.

Secondly,  the markets and banks would collapse – but at a controlled rate.

Thirdly, it should be admitted that the Euro and the Eurozone were both very bad ideas which developed into a grotesque sacred cow.

Then we could ALL start again.

The alternatives are greater budget shortfalls, greater deficits, even faster growths in  government debt, followed by  catastrophic collapses and Depression.

The former all require  political decisions of such magnitude that even the politicians have come to realise  that we do not have anyone  with even remotely the courage to  raise his or head above the parapet to take control.

So for the moment, it seems as if we’re knowingly headed for an economic holocaust.

So, unless the politicians wake up soon, we need to create hell and not wait for it.

From “Brother, Can You Spare a Dime,” lyrics by Yip Harburg, music by Jay Gorney (1931)

They used to tell me I was building a dream, and so I followed the mob,
When there was earth to plow, or guns to bear, I was always there right on the job.
They used to tell me I was building a dream, with peace and glory ahead,
Why should I be standing in line, just waiting for bread?

Once I built a railroad, I made it run, made it race against time.
Once I built a railroad; now it’s done. Brother, can you spare a dime?
Once I built a tower, up to the sun, brick, and rivet, and lime;
Once I built a tower, now it’s done. Brother, can you spare a dime?


Morton’s Fork lives!

Libya

Post-Saddam-type chaos in Libya will NOT be avoided. That’s nigh-on impossible.

One of the overlooked plans of the Iraq campaign was the Exit Strategy. Well, bugger me, the West has done it again in Libya.

The next major initiative will be the customary “Humanitarian Assistance” which is as good an excuse as any to maintain a military presence to ensure that the fuzzy-wuzzies keep in line.

THAT is going to be the most impossible task. The average Libyan’s loyalties are like this: 1. Family 2. Tribe  3. State Flag…….. In that order.

NOTHING but a totalitarian state can keep tribal factions in line. Government by Brutality appears to be the only way to stop tribes from killing each other. Saddam demonstrated that in Iraq and every other  state in the Middle East continues to suppress its people – but for very valid reasons.

Democracy is an anathema to tribal people. It is an alien concept.

In Libya’s case, the theory is that a fiefdom which has controlled many tribes through the medium of suppression can be turned into a democracy. Politicians may not have yet noticed that such a thing has never been done. It’s been tried on many occasions but so far, without success.

The most likely outcome in Libya is either the emergence of another authoritarian leader or the breakup of a country which was a western construct in the first place. It is a politically barren place with no political parties or constitution.

Meanwhile, the rebels are heading for Gaddafi City – SIRTE. One hopes that they all remember that the Tahoura Research Centre near Tripoli houses (or housed) the remnants of Libya’s nuclear programme. There are stocks of nuclear material which could easily be turned into a “dirty” bomb.

There has already been a half-hearted attempt to launch a Scud missile so hopefully, the rebels do not, once again find themselves on the receiving end, should Gaddafi supporters decide to surprise them.

Luckily, the BBC’s John Simpson has finally arrived in Libya – so all should be well. We don’t yet know whether he travelled across the desert with the Tuaregs or whether he is wearing the customary tea-towel on his head but after hearing of his exploits in Afghanistan, it’s possible. He’ll know what to do.

Meanwhile the next battle that  into which new Libyan Prime Minister Mahmoud Jibril will have to lead his people will be the rather unedifying soon-to-be-fought campaign for Libyan reconstruction.

The cue for the Western  invasion is the phrase “Humanitarian Catastrophe”. Look out for that one.

p.s. The politicians appear to be surprised by the fact that, in spite of the announcement that the war in Libya  had been won, the fighting appears to be continuing. Just like Iraq.

Guru

There appear to be more and more self-appointed “GURUS”  on the Internet:  Finance Guru, Lifestyle Guru, Management Guru….the list is endless.

I used to be one of those but luckily managed to extract my head from my ass before it was too late.

Please don’t do it.

I now prefer the more modest “Messiah”.

BBC

Yesterday, I was listening to the BBC World Service when I was surprised to hear  a presenter use the word “Asyla” as a plural of Asylum. WTF? People who do that are nothing but pretentious scrota.

World Finance

Tomorrow, if Ben Bernanke announces that the Fed is going to print yet more “empty” dollars, he will be introducing yet more inflation into the US economy. Markets will recommence their downward slide and investors will all rush-off  in the direction of the  Bullion Markets.

If however,  there is no further printing of dollars and QE3 does not happen, the likelihood is that the American economy will collapse as investors all rush off in the direction of the Bullion Markets.

Either way, gold is the safest bet.

Meanwhile in Germany, Chancellor Angela Merkel is also between a rock and a hard place. If she agrees to fully support lame-duck Euro economies through the issue of the Euro Bond – so that countries such as Greece are able to enjoy unlimited credit at reasonable rates, she risks a rebellion back home from the Christian Democratic Party as well as from an electorate which does not wish to donate any more to broken Euro economies.

However, if there is no mechanism to support poorer Euro states, the Euro could collapse, together with the German economy.

By the way, it is time to start worrying about the world’s Stock Markets. Starting tomorrow.

Liberal Party

Today, Liberals are UP(!) 4% in the latest opinion poll. Does that mean that there may be a change of plan in Nick Clegg being handed a sexy European Parliament  job as a consolation prize after the 2015 General Election?

In response to emails concerning my dog…

I am sick and tired of receiving questions about my dog who mauled an illegal immigrant, two rappers, a hoodie-looter with hanging-past-the-crack tracksuit bottoms , three Sub-continent customer service clerks speaking broken English, one Member of Parliament, two policemen, three flag burners and a  taxi driver.

FOR THE LAST TIME…THE DOG IS NOT FOR SALE !

Those Swiss!

Press release from HM Treasury: http://bit.ly/oIgJbo

GCSE Results

Record results! Congratulations kids – another record year. You must have worked SOOO hard.

Here’s something for the cleverer ones to colour-in:

Featherbedding the Banks

What the bankers are holding

 

 

A report was published today by the New Economics Foundation about the “hidden subsidies” currently enjoyed by the British banking industry. It is evident that the language, techniques and accounting procedures used within the banking system are such that they obscure both the full extent of the support that banks are accepting from the taxpayer  and the comparatively small amount of “banking skill” that banks executives contribute to their own “profits”.

Since 2008,  known public support for the financial sector has been unprecedented in scale.

Since the Bank of England came to the rescue of Northern Rock in 2007, with a  £25 billion emergency borrowing facility, the sums have grown. Subsequent systemic bank failures meant that the public purse would have to support the whole financial sector, not just individual banks.

Many schemes of different types were introduced. They all  lacked transparency so that the amounts are still hard to summarise.  Together,the schemes  added up to £1.2 trillion of backing to the banking system, equivalent to about 85 per cent of the UK’s national 2009 income.

The UK  scale of intervention, in spite of the vast differences in GDP was comparable to that of the United States.

But is it possible that there is still more to the story?  Research from the Bank of England, the Office of Fair Trading, the Institutional Investors Council and Moneyfacts (which provides independent rate comparisons)  reveals a range of other hidden subsidies to the big banks.

Chancellor George Osborne’s recently announced bank levy is minuscule in comparison to all the bank subsidies which we do not know about. The Chancellor was pulling a very small rabbit from a very large hat. The Independent Commission on Banking has yet to publish a complete list of the de facto hidden subsidies currently being enjoyed by the banks. What we know so far amounts to no more than scratching the surface.

Increased scrutiny of the financial system in the wake of the banking crisis has shed light on a number of practices previously taken for granted, which now might be viewed in a different light. The sheer complexity of modern banking (itself one of the conditions that brought on the crisis) has worked to shield the sector from difficult questions. But with the dust of public interventions now settling, a number of anomalies are emerging.

The ‘Too Big to Fail’ subsidy. Having concluded that our major banks are “too big to fail”, the government now  provides a public guarantee. That effectively is insurance against a bank going bust. In business terms, this gives the banks a huge commercial advantage over other organisations. All commercial enterprises need to borrow money and the banks are no exception. However, they can borrow money much more cheaply than any other type of company because of the fact that the public is guaranteeing anything that they borrow.

Answers from leading auditors questioned by the Treasury Select Committee confirm this. The hidden subsidies save the banks a large amount of money – at least £30 billion annually– and thus helps them generate “unearned” profits. To put it simply, they save billions on the cost of their own borrowing and so make MUCH  MORE profit that they would have done without that taxpayers guarantee.

It also means that when the banks pay bonuses to senior staff for “performance”  as well as dividends to institutional investors, the rewards of  the public’s  “insurance”  are headed in the wrong direction. They should be coming back to the taxpayer.

 

The quantitative easing windfall subsidy.  When it was decided that the economy needed more liquidity (cash), the Bank of England pumped money in using the technique called “quantitative easing”. Many people refer to this as “printing money”. However, there is slightly more finesse within the system than a bit of  pressure applied to  a  printing press button .

Take Government Gilts, for instance.(Gilts are bonds issued by governments and they pay a fixed ate of interest twice a year. Governments use Gilts to raise money)

The Bank of England  is not permitted to buy UK  gilts directly from the Government as this is considered to be “monetising” government debt, or in other words directly funding government expenditure through “creating money” .

Instead the Debt Management Office first sells the gilts to banks and other investors and then the Bank of England buys them back from the banks at a higher price, with money that it has “created” . The bankers then reward themselves for completing these “deals.”

 That gives the banks “new” money plus a cut of every trade.

 

The ‘make the customer pay’ subsidy. Thanks to an apparent lack of forward planning (and understanding), the government has created a paradox which really has placed the banks “between a rock and a hard place”. They have been given two contradictory goals by the government. The first is to lend money (which is what caused the majority of their problems in the first place) and the second is to hold onto their money so that they can rebuild their capital.

The banks could manage this problem in any number of ways. However, they have taken the easy option which is to charge more when they lend and at the same time, pay less to their own savers and investors. The difference between what the banks charge their borrowers and pay their savers is known as the “interest rate spread” or margin.

So the government, by way of using the taxpayer to guarantee that banks cannot fail to repay their debts has meant that banks can now “buy-in” money cheaply and resell it at a vast profit. That also means that they don’t have to pay their private savers very much at all. Technically, they are punishing the very people who are subsidising them .

As a matter of interest, there was a time when banks and building societies had an operating margin  (Difference between what they charged  borrowers and what they paid investors) of 4%.That means that in today’s climate,  borrowers could be charged say 10% and savers could be paid 6%. That excludes mortgagors whose borrowings are secured – their rates could easily be of the order of 3% .

Although the banks have taken the “screw the client”option, they could  speed-up their recapitalisation through eliminating bonus payments and dividends. The banks’ hidden subsidy created through overcharging their customers is estimated at £2.5 billion per year.

 

The Fake Money Subsidy. The nature of money is such that when a bank grants  a loan, it does not have the money. It is allowed to create money to hand-over and makes a profit from the interest rate which it charges. That is another form of subsidy – as the government has  effectively given banks another  licence to print money. Money is “lent into existence”. The old days when banks only lent money left by savers have gone.

So if this is considered another subsidy, it is worth tens of billions per year.

The whole essence of the contemporary monetary system is the  creation of money out of nothing, through the medium of lending.

The government and the taxpayer are no longer dealing with individual banks. We are dealing with a very powerful cartel which not-only negotiates as a single organism but has left the very concept of “competition” far behind. Furthermore,  if you study the various interest rate charges and products, you may be forgiven for assuming  that price-fixing appears to be taking place.

The UK retail banking industry is unusually concentrated. Not only do the largest five mortgage lenders have a market share of 82%  but the range of providers was much diminished by the demutualisations of the late 1990s. This concentration of the market has all but killed competition.

 

Mortgages: Current mortgage interest rates, compared to the bank base rate and the rates at which banks “buy in” money suggest that the banks are profiting greatly from their mortgage clients.

Using figures from Moneyfacts on the average rates offered for the benchmark two year tracker mortgage since June 2007, we can see that rates have fallen from 6 per cent to 3.5 per cent.  But the Bank of England base rate has fallen by much more – from 5.5 per cent to 0.5 per cent. The mortgage interest rate spread has therefore increased from around 0.5 per cent to 3 per cent.

Some readjustment in mortgage pricing was necessary, but even taking a conservative view of long-term spreads as being around 2 per cent, the increase to 3 per cent since the crash represents additional interest revenue of around £1.6 billion per year from 2009 gross lending and a further £1.5 billion per year from 2010 gross lending.

Increasing the margin on new mortgages has certainly been a factor in bolstering bank profits since the crash. Furthermore, despite the reductions in base rates and wholesale funding costs, key lending rates have hardly moved since the crash.

It seems therefore that the burden of “rebuilding” bank balance sheets is being borne by bank customers and certainly NOT  by bank shareholders and their executives.

 

Sneaky Fees: It is not only in retail banking that the customer is getting a raw deal. A study by the Office of Fair Trading (OFT) into the equity underwriting market, published in January 2011, found that “the market lacks effective competition on price”. This  followed an earlier report by the Institutional Investor Council (IIC) which tracked how total fees for raising equity capital, using rights issues, had increased over the past decade.

It has risen from 2% per cent to as much as 4%. Within this, the amount kept by the organising investment banks in their roles as broker, underwriter and adviserhad risen threefold from 0.75 per cent to 2.25 per cent!   There appears to be little justification for bank fees trebling and would explain for instance why a bank such as  Barclays Capital (the investment arm of the bank is now generating more profit than its retail arm)

Investment banks have collected over £1billion in  “excess” fees and over 90% of that has been generated since the 2008 crash. 

Banking is the only business which, when in trouble increases its prices. It can do this because it has a captive audience.

 It therefore seems a nonsense for Government to state that it would be desirable for London to remain “competitive”  as a global financial centre.

There is nothing competitive about London except bank bonuses. Competition used to be viewed as being based on the cost to the customer and not the income of the company’s officers.

 

And so…….The really frightening statistic is that notes and coins represent only about 3% of the total money supply. The rest is created as new credit.

According to analysts. estimates, the largest four UK banks are set to report profits before tax for 2010 of around £22 billion between them. By 2012 this is expected to more than double to over £45 billion, as analysts predict a return to “business as usual” for Britain’s large banks.

The same banks had total staff costs for 2009 of around £37 billion, with over £7 billion being paid out in the form of bonuses that were concentrated amongst their elite.

The hidden subsidies to UK banks from taxpayers and bank customers are very similar in scale to current bank profits.

This indicates that far from being efficient, the UK banking sector is deficient and that overall levels of dividends and remuneration, including bonuses are far higher than is economically justified.

Banged-up Bankers

Norman Tebbit is right. It is about time that the banking industry told us who was responsible for the banking Chernobyl of 2008. So far, apart from one or two career casualties, no-one has been brought to book. There certainly have been no criminal prosecutions.

Politicians continue to be in awe of the bankers. This is in spite of the fact that many “spooked” governments had “no-strings” money extorted by the bankers. Governments had to go cap-in-hand in order to borrow and over-commit themselves whilst  bankers behaved merely as the wayward child who had slightly overspent a term’s university loan.

The biggest mistake that governments made was not to ask the banks to try and stay “within budget” in future and not (at least) appear to be over-indulging themselves quite as openly as they used to. As we now know, the banks did not listen , took the money in the sure knowledge that they could carry on exactly as before, because there would be no sanctions. On the contrary, the governments told them that if they were ever in trouble again, government would borrow even more on their behalf.

Some would argue that governments, in handing those vast quantities of cash over to the banks, overstepped the mandate that had been handed to them by the electorate. But the consequence is very straightforward: we are now locked-in. Governments will keep on coming back to the people who elected them and will keep asking them for more and more money.

I say “more and more” because one of the by-products of the recessions suffered by most countries is more and more unemployment. The unemployed , no matter which way you cut it , are a burden on the State – a burden which needs to be supported. Support to the unemployed costs the State which once again has to return to the working electorate for funds.

Our own government spends more than it earns. The shortfall is made-up by borrowing. The difference is called a “deficit”.

Chancellor Osborne thinks that within the life of this Parliament ( by 2015) we will be able to eradicate that deficit. This , from a Chancellor who said this in a lecture to the LSE  three years ago:

“Around the world, countries like Ireland and Australia shrewdly took advantage of these huge opportunities. They reformed their economies, made themselves more competitive, and strengthened their public finances. Both of these countries, for example, now have a “future fund” of assets built to provide security against future shocks and liabilities. Their public finances are well placed. Their competitiveness has risen. Their institutions are stronger.”

Whlie we’re at it, here’s another George Osborne quote:

“A Generation ago, the very idea that a British politician would go to Ireland to see how to run an economy would have been laughable. The Irish Republic was seen as Britain’s poor and troubled country cousin, a rural backwater on the edge of Europe. Today things are different. Ireland stands as a shining example of the art of the possible in long-term economic policymaking, and that is why I am in Dublin: to listen and to learn.”

Mr Osborne then went on to say that he would endeavour to create a British economy in the same mould as that of Ireland.

Some may say in that statement, we have at least one Tory electoral promise which will be achieved.

In retrospect, the above very sincerely-delivered quotations may be interpreted as the ramblings of a future Chancellor who had no idea of what he was taking on or what he was talking about – and THAT is the point.

The banks perpetrated their frauds so cleverly that not even the brightest economists or politicians saw it coming. One could even say that some bankers were SO cunning that even they had no idea of what was about to happen. Although, having said that, the accounting techniques which the banks used suggest that even when they were technically bust, they still managed to declare profits and pay bonuses. Those were the days when the phrase “off-balance sheet” came into common usage.

Whatever the excuse, we do need to see some justice.

Double economic Trouble

The UK’s 2009 budget deficit  is  the worst in its history  and the present government is doing very little to alleviate the potential problems and collateral damage  because it is playing a waiting game. Instead of taking hold, the government is still bleating about bankers’  bonuses with most of its energies focused on an impending General Election.

It is very doubtful whether the government has finished handing money to the banks and it is very likely that the UK budget deficit as well as the rate of inflation will rise over the next two years.

The  explosion in the supply of gilts would be bad enough if the Treasury  only had to borrow enough to equal each year’s budget deficit but the time will come when the Treasury has to borrow enough to replace  maturing gilts  as well as enough to fund its deficit— and that means an even greater avalanche of gilts will need to find buyers each year.

The Law of Supply and Demand dictates that when you get a massive increase in the supply of anything, its value plunges — and United Kingdom gilts as well as  US  Treasury bonds are no exception.

So far, most investors have been willing to pay a relatively high price and accept lower yields but now even that is changing!  The most ominous “noises” are coming from  China which is the  the single largest holder of U.S. debt. Last month China dumped more Treasuries than in ANY month since the US government started tracking the data in 2000. Unfortunately for the USA, China holds nearly one half of its debt.

Last week’s US  Treasury auctions turned out to be a monumental failure, with demand extremely weak. The 30-year auction was especially weak: Indirect bidders — mostly foreign governments and investors — took   just 28.5 percent of the bonds sold, compared to a ten-auction average of 43.2 percent percent. That is ominous.

As a result, prices slumped and yields surged. In effect, the U.S. Treasury had to bribe investors with higher yields to get them to buy. Immediately alarm bells began ringing at the Fed.

Four days ago, the U.S. Federal Reserve raised the discount rate on loans made directly to banks. The 25-basis-point  (0.25%) increase was the FIRST hike in the discount rate since early 2006. Secretly, the Fed is in a panic to ward off a bond market collapse and the UK Treasury is concerned about a similar collapse in its own gilt market!

Sooner or later, the Americans MUST send the message that they’re serious about cutting back on their money printing. The same applies to the UK’s “Quantitative Easing”. There has been an announcement from the Bank of England to the effect that Quantitative Easing has stopped – for ever! The sad fact is, however that they don’t know whether to p**s or climb off the pot.

The danger of course, is that foreign investors could  get an entirely different message: That Washington’s  and London’s efforts to fight the most severe recession since the 1930s are waning or that they are deluded enough to think that their work is over.

If that happens, there will be turmoil — not just in the bond/gilt market, but in every other asset class. The two governments are between a rock, a hard place and more rock.

The Chinese are beginning to flex their muscles and have been especially vocal about surging U.S. deficits over the last year and have repeatedly warned that such deficits  are unsustainable.  As America’s largest financing nation they have also asked the Fed for some sort of guarantee on Treasury bonds. China owns over 40% of all outstanding U.S. Treasury supply – or more than $1 trillion dollars!

If U.S. Treasury bonds are an ideal short then Britain’s gilt market is probably an even better speculation on the short side. The United Kingdom is amassing piles of debt and there does not appear any end in  sight. The transition to a “do-nothing” system is further compounded by the fact that some economists say that the UK should spend its way out of trouble whilst others say that government spending should be cut. Some say that the government should start making inroads into its deficit while others say that it should wait.

The U.K.’s financial system is essentially bankrupt – no matter what cosmetic pronouncements are made by a frightened  government. In 2008, the aggregate cost of bailing-out its banks exceeded the entire value of England’s gross domestic product. 

Quantitative Easing (QE), the Bank of England’s euphemism  for a massive credit expansion, is no greater anywhere than in the United Kingdom and  the Bank of England’s multi-billion  bond purchases have triggered a rise in inflation.   The BoE has been an aggressive buyer of British gilts since the end of last year – especially longer dated gilts.

 
The big question for gilts is what happens once the Bank of England finally terminates or slows its QE program? Who will absorb this supply? The odds are pretty high that the UK will have a hard time finding buyers to finance its ballooning budget deficits. 

 
Both Anglo-Saxon economies represent the worst long-term inflation scenarios and shorting their respective government bonds ranks as one of the greatest speculations over the next decade. There’s lots of fun to be had by the Investment banks and foreign investors and yet another opportunity for the banks (once again) to destroy (at least) two economies.

A very simple question.

The United Kingdom Government has pumped £850 billion – that’s £850,000,000,000 into the country’s banking system in just over a year. That suggests that the banks lost, misplaced, gave away or were swindled out of that amount. Or maybe, they never had it in the first place.

So, the question is simple: WHERE IS IT AND IS ANYONE LOOKING FOR IT??

As there must be an audit trail which leads to every single penny, perhaps it might be worth spending another £100,000,000 on advisers in order to  find it.

[Since the beginning of the banking crisis, this government has already spent over £100 million on lawyers and advisers (bankers and accountants)] 

It’s an ill wind………………..

What economy?

 

 

 

 

Mervyn King and friend

This week, Mervyn King, the Governor of the Bank of England made a very muted, cautious and quite frankly, borderline-pessimistic statement on the state of the economy – and he was right. There is a long way to go.

The banking system is still on life-support, courtesy of the Treasury and the Bank of England. At some time in the not-too-distant future, a decision will have to be made whether to continue with the treatment or whether to switch off the Quantitative Easing  machine which is keeping the banks alive.

Once that happens, the credit system may gasp at first but theoretically, it should be able to breathe unaided. It is only a matter of time and timing but so far, no-one seems to be willing to make the difficult decision. The final decision is difficult. We can all see the currently paltry bank lending volumes – and that is WITH Treasury and BoE support. Imagine  what might happen when support is withdrawn. Initially, there would  be a severe slowdown in lending, which at current lending rates does not bode well.

What is really making Mervyn King twitch though, is not the lack of banking activity but the rapidly accelerating UK Budget Deficit – the amount of money that the Government owes. King is very aware that there are only two main instruments which the Government can apply in order to repay the money that it has borrowed. The first is to increase its income, i.e an increase in Tax revenue.

The Government’s other alternative is to cut costs – fewer individuals employed in the Public Sector. Regrettably, that would inevitably result is a fewer public services and a lowering of standards.

The reason why the Government has not implemented either alternative is because it is playing a “wait and see”  game, in the hope of an economic upturn arriving sooner rather than later.

Yes, “hope”.

One of the great tenets of capitalism is that the consumer is empowered to spend.  Goods produced and services provided have to be bought – otherwise the economy grinds to a shuddering halt. Currently , there is little appetite for the profligate spending which  we all enjoyed  on the back of the twin temptations of a rapidly inflating housing market (The Remortgage Years), married to credit by the bucketload.

The 2009  pre-Christmas season will provide another distortion to the figures and disguise the fact that many of us currently prefer to save, rather than spend.  Economic uncertainty creates savers whilst an over-supply of credit creates over-spenders.

Currently, the economy NEEDS spenders but the paradox is that because of uncertainty, the banks will not lend us the spending money and because of our own uncertainty, we want to hold onto what little money we have. Meanwhile, the Government  crosses its fingers as it sits between a rock and a hard place. Hence the occasional dollops of “good” news which are thrown out by the Treasury spin-machine and the occasional politicians’ statements. They are all variations on the theme ” Confidence seems to be returning”.   Is it?

The Stock Exchange is another fine example of “Confidence returning”.  Currently, there is an over-supply of money to the banks. They are either lending the money to Fund Managers who are buying shares or the banks themselves are buying shares. The Stock Market is a self- amplifying system which means that the more money that is thrown at it, the better it responds and consequently, there is an increase in the value of shares.  That gives the false impression of an economy  that’s regaining consciousness. However, if you look carefully , you will notice that the volume of shares traded is comparatively low and that much of the activity is in two main sectors – Banks and Miners. That is hardly representative of the UK economy, especially  as most of the mining is offshore. The Stock Market Illusion.

The Treasury-Bank-Producer-Consumer-Economy is  a vicious circle of interdependence which is controlled by the money-supply –  which is soon set to dry-up . At the point when the Treasury stops handing Monopoly money to the banks, the economy will HAVE to self-support – or to be more accurate, it MIGHT self-support.

That is why the word “hopefully” is used so often by commentators, bankers, economists and politicians and why two sets of economists are producing two sets of interpretations based on the same economic data.

All commentators are saying ” The worst COULD be over.” 

Here’s a new twist: The worst is NOT over.

 

Dementia sufferers and Drugs

Surprisingly this is not about our economy and its guardians but about a recent survey of Dementia sufferers.

Its seems that many Dementia sufferers are ending their days  being  controlled and pushed into a near-vegetative state through wrongly-prescribed Anti-psychotic drugs. Consequently life is much easier for their carers because the carers are now looking after what is effectively an inanimate object.

Over 180.000 sufferers are being given these drugs. The report which  highlighted the scandal recommends that two-thirds(!) of these patients should be taken-off the medication.

Hopefully, that will decrease the number of strokes and deaths and let us hope that the GPs who are prescribing  inappropriate drugs can explain their diagnoses.

Until today, we thought that Harold Shipman had been working alone.

 

FTSE 100-99-98…….

The FTSE 100 index held its value yesterday – that’s in spite of the bad economic news and the announcement that the United Kingdom is still very much in recession.  The FTSE 100 seems to be almost impervious to any bad data that can be thrown at it. GDP data should have shocked the market because it showed that the UK economy unexpectedly contracted in the third quarter. Sterling tumbled more than a cent against the dollar and gilts jumped.  On the face of it – nothing seems to make sense any more.  Continue reading FTSE 100-99-98…….

Conservative Party Conference week.

  •  
    •  
      • Boris Johnson once again has showed his leadership credentials by being approachable, witty and engaging. He does make the rest of them look a little bit pedestrian. In spite of his shambolic image, you can sense a rod of steel running through both his speech and personality. One to watch for the future. Imagine   a TV debate between Boris and Gordon Brown. It will never happen – but what a prospect.

 

  • Boris Johnson and friend

 

  • George Osborne’s department lined up like a row of fairground ducks was quite diverting. George Osborne is gradually shaking-off his Tim Nice-but-Dim image.

 

  • It’s very brave of David Cameron to allow Ken Clarke a voice – bearing in mind his strong Euro-sceptic stance. The Conservative Euro-sceptics should not attempt to embarrass David Cameron at Conference. They all seem to think that the next election is already won.

 

  • Custom dictates that when any Party is in the middle of its Conference, the other Parties keep quiet and do not make any pronouncements. So, Alistair Darling’s crudely populist announcement of cutting the incomes  of GPs and other high earners leaves us in no doubt that the Election campaign is now in full swing.

 

  • Retirement at 66? Purleeeze George – you can do better than that! Many will still retire at 65 and most of those who have not retired will be out of work – unless there is a local B&Q. The ACTUAL money saved will be negligible and it was hardly worth the leak.

 

  • It appears that as far as cutting Public Expenditure, the main Parties are now engaged in what can only be described as a peeing contest.

 

  • It was good to see that old duffer Kenneth Brown. So there is life after death!

 

  • The Editor of the Sun did not have to buy a single drink in the Conference bar last night. Hardly surprising but the Sun’s move to withdraw support from the Labour Party caused some disappointment among Conservatives. About as much disappointment as finding out that Gary Glitter can’t babysit tonight.

 

  • On a completely separate subject, the annual yakfest that is the 11th Pride of Britain Awards took place last night. One is never sure why only some kids with cancer attend the show, why only the kids whose parents managed to inform the media of how their brave 2year-old “dialled 999 whilst motherwas having a seizure in the bath” receive bravery awards and why Gordon Brown has to make a “surprise” appearance. We all like proper heroes but nowadays it seems that we have developed a real “need” to worship – as long as it involves lots of celebrities. If Michael Caine is made to feel any more ” ‘umble” I shall throw up. Having said all that, I’ve never managed to watch the show. This year there is a teacher whose Maths lessons contain RAP (one presumes that the “C” is silent). Then there’s the lady who stood between a small child and a Rottweiler. The best one is an ex-heroin addict with 176 convictions who now helps “young people to change their lives”.. As long as Simon Cowell, Tess Daly and Davina are there plus a room-full of tear-wracked luvvies we can rest assured that all’s well. Now where can I buy a Rottweiler? I’ve just noticed something and it is the final piece of jigsaw in a theory that I have been working on for some time. Here goes. I believe that Christopher Biggins is God. Why? because God is everywhere.

 

  • Safety campaigners are saying that if the Conservatives axe speed cameras, the accident-rate will increase. Here’s a compromise – and it will be comparatively cheap to implement. How about a sign that says “SPEED CAMERA IN 50 YARDS” on either side of every single speed camera in the country.  Not a good idea, I hear you say. Why not? Oh I see. What you really want is speeding motorists that produce a revenue and not necessarily slow motorists who do not.

 

  • Sir James Dyson managed to look like a prat when his autocue failed. A Dyson Vacuous.

 

  • Liked the announcement today that the Conservatives will begin a process of ridding us of Government forms and red tape. THAT’S the sort of thing we like to hear.

 

  • Conservatism SHOULD be the politics of giving everyone in Britain the ability, opportunity and tools to look after themselves and their families – without the smothering State intervention that is the hallmark of Socialism – even when it is wearing the thin veneer of New Labour. That should ALWAYS be, of course, coupled to the State taking care of its weakest citizens. Call it benevolent Conservatism if you like. Simple.  THAT is  the message that David Cameron and his rejuvenated Parliamentary Party should be promulgating. Needless posturing and name-calling should have no place in the modern Conservative political toolbox. David Cameron should look straight down a camera lens and explain what modern Conservatism is. Unsurprisingly, there are those who have never heard exactly what modern Conservatism represents because their views and opinions are still being distorted  and influenced by New Labour spin.

 

  • George Osborne is looking very promising.

 

  • So why DOES Jordan look as if she’s wearing a gumshield? Is in “hommage” to her cross-dressing new beau and professional thug Alex (Max – you’re running out of crap copy!) or has she been “done”. I think that we all know the answer to that one.

 

  • David Cameron has been photographed with a glass of champagne. Big deal! I shall simply repeat a previous report: The biggest consumption of champagne at  Conference time is by Labour. That was told to me by a former Chief Barman at the Grand Hotel in Brighton. Hypocrites.

 

  • Today, all the Socialist rags are laying-into  George Osborne who has introduced a bit of realism into our understanding of the economy. One suspects that once the Conservatives are in power and manage to have a good look at the books, they will see that things are far worse than has so far been admitted by ther present incumbents.

 

  • We are still living in cloud-cuckoo land as far as the economy is concerned. The FTSE is UP. House prices are UP, Gold is UP, Tesco shares are UP. In fact – everything is UP. Sounds great doesn’t it? So why aren’t we all feeling more positive. The fact is that the FTSE is up because  money is being invested on the Stock Exchange as a result of bank savings rates being so derisory plus, much of the money currently being invested is foreign so it could leave us at any time. The money that is being invested by British banks is not all real money. Some of it is the stuff that has been printed by the Bank of England and handed to the banking system. Mr Quantitative Easing strikes again. Gold has been creeping up for months. It is normally viewed as a “hedge” – somewhere to run when equities and commodities are down in price. That is not the case at present.  Something that has gradually been creeping into our collective peripheral vision is the slow-collapse of the dollar. There are strong rumours that very soon, oil will no longer be traded in dollars – there is foreign plotting afoot! Once the dollar really does go into freefall, share and commodity prices will tumble very quickly. The British economy has much to fear because the factors that it has traditionally relied-upon to buttress the economy have all but gone. The City of London USED to be the world’s financial centre. That is no longer the case. WE used to MAKE things and export them. Nowadays, that is down to about 17% of the country’s total economic output. Finally, the British economy and Governmemt are “over-borrowed” with little realistic prospect of repaying much of what was borrowed. If George Osborne had been in possession of ALL the facts, I don’t believe that he would have wished to even beigin his speech yesterday. He did very well and reminded us that we need to take a more collective and inclusive approach to heal the economy.

 

  • Yesterday I said that I would probably throw -up if Michael Caine was once-again “umbled” at the Pride of Britiain Awards. Apologies to Michael as it was Joanna Lumley’s turn to be “humbled and overcome”. Please make it stop.

 

  • So Boris and Dave are ex-Bullingdon boys and used to piss it up, throw bread rolls about, get toffed-up  and pose for silly photos. Go to any Comprehensive School on Prom Night (American import, I’m afraid) and watch scores of youngsters, toffed-up, arriving in ridiculous stretch limos and being encouraged to be extremely silly. So where’s the difference between our Grease wannabees and the Bullingdon Boys. Apparently, it’s only OK to dress like a posh prat and behave outrageously if you’re NOT a posh prat. It seems that those aspirational working classes are being herded by the Labour media back towards a concept which one hoped had been left behind – The Politics of Envy.

 

  • There was a great photograph of the Pride of Britain winners outside No 10 Downing Street. Sarah Brown looked very vivacious – so why did Gordon Brown look as if someone had inserted a six-inch ruler between his cheeks? Oh I see. Smile, eh? Wow.

 

  • Are we, as a nation, losing our sense of humour? We all remember Boris Johnson insulting Liverpool, Portsmouth and rather bizarrely – Papua New Guinea. He acknowledged all that in the introduction to his speech at Conference this week. Whatever you think of Boris, you have to admit that he carries a very mischievous sense of humour. That reminds me of a pilot who was censured by his bosses for the following Tannoy announcement: “Ladies and gentlemen, we are about to fly over Liverpool. Would you please ensure that you have placed your hands over your wallets.”

 

  • This woman’s husband, Andrew George was taken ill but has now been discharged and is being comforted by his family: 

  • She used to work at Little Ted’s Nursery and is a pervert. Although her husband does have our sympathy, one cannot help but think that at some stage during the marriage, he would have benefited from a visit to Specsavers.

 

  • The Conservatives have announced that they will deal with binge-drinking and teenage violence through the medium of taxation. Surprisingly, this is the first Conservative initiative that I disagree with. Remember that some drugs are far more expensive than alcohol, yet, money is still found for them. The alcohol genie is so far out of the bottle that there are no initiatives that will ever change the Brits’ uneasy relationship with alcohol. Social Engineering through taxation does not work. Let’s face it, Brits drink to get drunk – and then they drink some more. A few more pence on booze will make no difference whatsoever. Practical tip: The increased tax will be on cider and strong lager so do what kids do already, buy normal lager and tip cheap vodka into it. Now what?

 

  • Could it be true? Avram Grant is returning to Portsmouth as Director of Football? That should cheer the place up. Here is a photo of Avram practicing his Gordon Brown smile.

 

  • Sharon Shoesmith has  launched judicial review proceedings against Haringey Council, Ofsted and the Children’s Secretary Ed Balls. She was in charge of Haringey Social Services during the Baby P murder. One of the great British traditions is that if there is a screw-up on your watch then you fall on your sword. Ms SHOESMITH DID HERSELF NO FAVOURS during her few TV appearances when the Baby P affair was at its peak. She seemed aloof, smug, unrepentant and unapologetic. ” I was following orders” is the usual excuse. Hers was “We followed all procedures”. That neither exonerated her, nor did it go down well with the public.  Had she cried, begged forgiveness and made some sort of admission, the public would have been a little more sympathetic. As it was, Ed Balls did exactly the right thing in instructing Haringey to sack her without compensation.

 

  • Labour bleating noises have been heard again today. General Sir Francis Richard Dannatt, GCB, CBE, MC is our most distinguished soldier and tomorrow (Thursday) he will be officially announced as a Conservative Life Peer who will be advising the Conservatives on defence. General Dannatt was our highest-ranking  soldier and Chief of General Staff. He was going to be promoted to Chief of Defence Staff , which means that he would have become head of all of our armed forces – not just the Army. However, Gordon Brown personally blocked the promotion and General Dannatt was instead given the consolation prize of Constable of the Tower of London. Traditionally the Chief of Defence Staff is principal military adviser to the British Government. Gordon Brown was miffed because of General Dannatt’s “repeated calls for better pay and conditions for servicemen”. So General Dannatt’s sins? Speaking his mind, not being a Brown “yes man” and caring about his soldiers’ safety and welfare. Gordon Brown really has no idea whatsoever – probably because he was dealing with a proper  leader. It’s patently obvious that Brown does not recognise the species. He should learn that leadership is much more than Benito Mussolini-type posturing with overworked, overtired, adjective-free, moribund speeches.

 

  • Obama wins the Nobel Peace Prize. Quite right too. Climate, Democracy, Nuclear Disarmament – in fact, everything that he has touched so far. It looks as if Zimbabwe’s Morgan Chanderai was the runner-up. There is already talk  and discussion of whether Barack Obama deserves the Nobel Peace Prize with only nine months in office. The fact is that the Nobel committee can see that in spite of the fact that Obama’s actual achievements so far  are comparatively modest – he is by far the most influential individual on the planet as far as the short and medium term futures of the Earth are concerned. The progress that he has made in the last nine months is nothing short of remarkable.

 

  • It appears that today is probably the last posting day for Christmas. If you  want to send cards abroad, you’re too late. Christmas parcels should have been posted by March 31st. Why didn’t Crozier stick to football. This is yet another case of a Business Model triumphing over the Customer. Perhaps Royal Mail should be renamed Royal Lemming.

Friday October 2nd 2009

  • Ethiopia has suddenly become the focus for all anthropologists. An ancient  skeleton was found in 1992 and it has taken 17 years for the research team to rebuild it. Why all the excitement? The skeleton belongs to an in-between species of humanoid about 4.4 million years old. It has been designated Ardipithecus Ramidus. It is not “the missing link” but by extrapolation, it appears that it is probably about 9 million years since the division between apes and humans. So where was John Prescott this week?
  • The East of England Minister Barbara Follett is to stand-down from Parliament. She is (was) Minister for Culture, Creative Industries and Tourism. Her reasons for leaving? Yes, it’s the old chestnut: “For family reasons – to spend more time with my family”. Heard her name before? She’s the MP who claimed £500 to repair a Chinese rug ( don’t we all?) and she also claimed £25,000 “for security reasons”. She has since repaid all of the money. So how could she afford to sign such a large cheque? Her husband is millionaire pulp fiction writer, Ken Follett. Barbara and Ken epitomise the “champagne socialist” and are chums of Tony and Cherie Blair.
  • Jobs for the boys. Former Northern Rock boss, Adam Applegarth is now an advisor to Apollo Management. They are an American Equity firm. Adam is advising them on the purchase of bad loans, including parts of Northern Rock bank, the former Building Society he brought to its knees. Perhaps a touch ironic but perfectly legal. He will earn about 200,000 per year which is a lot more than the thousands of people who lost their jobs at Northern Rock. It’s all very worrying.
  • Today, Ireland will vote in favour of the Treaty of Lisbon. It’s their second attempt. The Irish economy is currently in such an appalling state that they appear to have little choice. However, if they do not support the Treaty, then it’s curtains for the Treaty.
  • The International Monetary Fund (IMF) is predicting that the British economy will grow by 0.9% next year. That’s about four times the current politicians’ prediction. House prices have returned to their pre-crunch 2008 levels, the FTSE 100 index is UP. As one of the few people who predicted nationalisation of the banks, I am still not sure whether to put the Bolly on ice just yet.
  • Vanessa George, Colin Blanchard and Angela Allen. They are the three baby-abusing perverts who are spread all over the newspapers today. Angela Allen is the one from Little Ted’s Day Nursery in Plymouth. She photographed herself sexually abusing babies as young as 12 months. Whichever prison they end up in, they are guaranteed some very close attention from other inmates. The burglars, drug dealers, fraudsters etc look almost honourable professionals next to these degenerates. I do hope that the other prisoners are not too gentle with them.

Thursday October 1st 2009

  • A survey has just been published of the world’s top  Broadband Countries – taking into account speed etc. The United Kingdom is languishing in 25th place. The top country? South Korea. Is this another indicator of the rise of the East and the slow eclipse of the West?. 

  • The Daily Mirror has adjusted its reportage of the Tories today – presumably in response to the Sun’s decision to back the Tories. It’s going to be a right mess leading up to the election. The gloves are off

  • BAE systems is about to be prosecuted for dishing out hundreds of millions in bribes. You may recall that when Tony Blair was in charge , there was a bit of a bribery scandal  involving Saudi Arabia, but as they say – all charges were dropped. There is one thing that both our Government and Judicial System would do well to remember and that is that greasing the cogs of commerce through the medium of bribery is normal in many countries – especially hot ones. Many years ago, I sold a yacht for a $1million to an Arab Prince and we shook hands on the deal and arranged to complete the paperwork the following day. That night , my phone rang. It was the Prince’s “Private secretary and advisor”. This is what he said: “Although the Prince is a very rich man, alas he is not a generous man. You will also understand that he always seeks my counsel and almost always heeds my advice. I have yet to advise him as to whether he should complete this purchase – but I am sure that we can come to some sort of arrangement.”  I was outraged! I told him that I did not make a practice of dishing out bribes and that I would report our conversation to the Prince. I never saw the Prince again. Some time later I realised that the Prince had probably been sitting next to his Secretary when he had made the call and it was probably his way of getting a few thousand off the price. I also recall another yacht-owning Middle Eastern client. Whenever we presented him with an invoice, I would ask the staff to make sure that it was itemised and added-up wrongly, but in his favour. Usually by either £50 or £100. Before handing over a wad of cash, he would add-up the bill himself, realise that it was incorrect , say ” Yes, that appears to be in order”  and pay. He was happy and I was happy but more importantly, honour had been satisfied, he had won a little victory and he always came back to us because he enjoyed our little game. We should NOT always be so po-faced about the way that other nationals  do business. It may not be pretty but it works.
  • Is it really the end of the Labour Party Conference? Thank You, God. Harriett Harman is not too chuffed about the Sun’s decision to support the Tories. She said: “Let’s face it, the nearest their political analysis gets to women’s rights is Page 3’s news in briefs.”  It’s only a matter of time before Harriet gets the call from Hugh Hefner.
  • At the Labour Conference yesterday, the jurassic Tony Woodley, leader of UNITE, was cheered when he tore up a copy of the Sun. One presumes that he had looked at the pictures first. He said: “I suggest the rest of the country should do exactly the same thing”. Labour should persuade more progressives such as Tony Woodley to give voice to their views – that way they’re absolutely GUARANTEED to lose not only the next election but several after that. During Tony Blair’s tenure these Brylcreemed 50s throwbacks used to be kept in a darkened room or padded box until after Conference. A dignified silence without even a platform-mention of the Sun would have been far more powerful.

  • Financial Analysts seem to be confusing the state of the FTSE 100 with the British Economy. The fact is that many of the billions invested in the Stock Exchange consists of foreign money. That’s where many of the profits are going – abroad. Instead of flying to Monaco to play the tables at the Casino, many foreigner “investors” are winning lots in the Casino that is the London Stock Exchange.

  • The FTSE 100 has experienced its biggest quarterly rise in 25 years. Once again, this  is being hailed as some sort of success. It simply means that lots of bets have been placed. The punters will be taking their profits soon. Then the Government can once again blame the bankers. Let’s hope that they don’t break the bank again.

  • Politicians are always saying that it is the Pension Funds and Insurance Companies  own most of the assets traded on the Stock Exchange. In fact, between them, they only own about 25%

  • Today the national minimum wage rises by 7p an hour to £5.80 and for 18 to 21-year-olds, the minimum wage increases by 6p to £4.83 per hour. This is also the day when the government legislation on “tips” has changed. From today it illegal for bars, restaurants and hotels to use tips or service charges to make up a minimum salary. That is all very well but in the grand scheme of things, it is a comparatively trivial matter and possibly not a terribly cost-efficient move by the Government. Especially as the Government has already conceded that the changes governing tips will lead to an estimated £60m in extra costs to ensure the legislation is implemented properly. The new code will also lead to higher National Insurance payments. This is an inflationarymove because bars , restaurants etc will simply “up” their prices to maintain their margins. The British Hospitality Association (BHA) estimates the new rules could lead to an additional £130m in costs and up to  5,000 job losses. There are those of course who feel that a tip should be a customer’s expression of appreciation for good service and should not be used by an employer to bring wages up to the minimum. Mind you, both the Federation of Small Businesses and UNITE are both in favour of the changes. The only people who will be really affected are the tippers and the tipees. The customer tippers will experience increased prices and the waiter tippees may suffer up to an estimated 5000 job losses. There is a saying: ” If it ain’t broken – don’t fix it.” Needless to say, one of the few groups who will not be affected is Politicians. You may have heard that when they eat out or stay in hotels – it tends to be on expenses. 

  •  

Friday September 25th 2009

Friday September 25th 2009

  • The mole who leaked the MPs’ expenses information to the Daily Telegraph has revealed what motivated him to do so – apart that is, from the £110,000 fee that he was paid. It now appears that his primary motivation was not money but the fact that serving soldiers were “moonlighting” at the House of Commons. They were working in the Security department and protecting the Civil Servants who were dealing with confidential matters – one of which was Members’ expenses. Apparently, it wasn’t long before the soldiers realised the extent and extravagance of MPs’ expenses and so glimpsed the comparative opulence and excesses of the politicians’ lifestyles.  The very people who represented them and who had sent them abroad to be shot at. The sums of money involved in the claims that they either saw or were told about were further amplified by the fact that the soldiers were doing this extra work in order to buy decent boots and body protectors and other items which would make their soldiering duties easier and safer. It is currently very easy for us to feel very emotional  when they hear stories such as this – but we should proceed with extreme caution because it now seems that the mole is trying to justify his actions in leaking the information. He appears to be telling us that he now feels vindicated because of the “poor” soldiers and because MPs have to-date returned over £500,000 in mis-claimed expenses. Planes bearing dead blown-to-bits soldiers, processions through Wootton Bassett and full-page photographs of a recently mutilated soldier paying his last respects to his blown-up dead buddy certainly do tug at the heart-strings. Great propaganda andimmaculatetimingbyourmole. Now the facts: The mole received £110,000 pounds from a right-wing paper. Currently each soldier receives Osprey lightweight body armour and£3500 – worth of state-of-the-art equipment – including boots and shoes. The mole’s motives for leaking the information would not be in question had he not accepted such a large amount of money – which one presumes has been donated to the Army Benevolent Fund. I am not a great supporter either of this Government or of the pointless shenanigans in Afghanistan but sometimes there are over-sugared pills which are just too difficult to swallow.

  • One question remains: Why were security men  -serving soldiers or not- allowed to either view or be given  confidential information.

  • China , India and Brazil are to play a more prominent part in G20 and will also have more IMF votes. Currently, China wields 3.7% of IMF votes compared with France’s 4.9%, although the Chinese economy is now 50% larger than that of France and  in spite of the fact that China has over 20 Provinces which each has a population greater than that of France. This looks very much like the dawn of the Eastern or New economies and the inevitable sunset for the once all-powerful West. Regrettably, not only is it a question of size and manufacturing power but the West is currently “in hock” to China. Chinese and Indian savers enabled all of us to be borrowers. Now economists are saying that the East has to create the same free-spending and borrowing consumer society that we have enjoyed for so many years: just look where WE are now! Are we really so well-placed as to be dispensing economic advice?

  • Another New Labour piece of legislation which has been languishing in the long grass for a while is the changing or possibly the removal of the Statutory Retirement Age. It is a shame that there are ex-teachers, ex-managers, ex-engineers who happen to be over 65 and who are now either shelf-stacking, working at B&Q or watching Countdown. What a waste. The Government says that the matter will be dealt-with in 2010, in other words, by the Tories. Meanwhile, at least 300 over 65s are taking ex-employers to Tribunals and yet again, lawyers have become involved. That is New Labour’s one big success – through their intransigence and incompetence, they have produced the best-ever Lawyer Job-Creation Scheme. The Brits have always been obsessed with 65 being their time to stop work, relax, take long holidays etc. Unfortunately in many cases it’s retire, sit around for a bit, die.  We are changing as a nation and it is not purely because of the recession or plundered company pension schemes that people wish to carry-on working. Our “retirement mentality” has gradually been disappearing and people genuinely WANT to work for as long as they can. OK, there are very physical jobs where at age 65, you’re clapped-out. For instance, building, mining or farming. You can punish your body to such an extent that by the time you are 50, you start looking forward to the day when you can stop. However, nowadays many of us are engaged in non-physical work which means that we SHOULD be as fit at 65 as we were at 45. Policies should not be driven by a Government with one eye on unemployment statistics because as usual, public opinion is against them. It’s now time for the Statutory Retirement Age to be abolished.

  • Iran is the world’s fourth-biggest oil producer. No wonder they need to make such a vast investment in nuclear energy. You never know! Or, could it be that the Mullahs want to produce nuclear warheads in order obliterate Israel and/or the USA. That’s not possible because the Koran says that Muslims want us all to be their chums. Here are three quotes directly from the Koran (or Quran if you know your Peking from your Beijing). Here goes: “O you who believe! do not take the Jews and the Christians for friends; they are friends of each other; and whoever amongst you takes them for a friend, then surely he is one of them; surely Allah does not guide the unjust people.” (5.51)  or :“So when you meet in battle those who disbelieve, then smite the necks until when you have overcome them, then make (them) prisoners, and afterwards either set them free as a favor or let them ransom (themselves) until the war terminates.” (47.4)  or “The punishment of those who wage war against Allah and His apostle and strive to make mischief in the land is only this, that they should be murdered or crucified or their hands and their feet should be cut off on opposite sides or they should be imprisoned; this shall be as a disgrace for them in this world, and in the hereafter they shall have a grievous chastisement” (5.33) As I said – nothing to worry about. They’re just misunderstood. Talk of fundametalist Muslims being a bunch of fanatical murdering misogynist psychos is very naughty. They want to love us – as we love them. It says so in the Quran. Let them build their nuclear power stations bombs. It’s for our own good. Just think about all that cheap electricity.

Nearly forgot: “O Prophet! urge the believers to war; if there are twenty patient ones of you they shall overcome two hundred, and if there are a hundred of you they shall overcome a thousand of those who disbelieve, because they are a people who do not understand.” (8.65)

  • The often misunderstood and misinterpreted thing which suggests that when a  Muslim blows himself up for the cause , he will be rewarded in Paradise with 40 virgins to shag (presumably) -is wrong. Martyrs in Islam are classified as people who die for their religion whereas people who blow themselves up for women are dying for their own lusts. It’s Hell for them. Presumably you need to die with a hard-on. Not impossible – many men do, apparently.

These are Iran’s main Nuclear sites:

Thursday September 24th 2009

  • The Government has criticised the Football Association for not reforming itself. It has also asked the F.A to spend more time and resources on ethnics and women as well as telling them that they should provide better leadership. Perhaps when the F.A has completed its restructuring it can then give H.M Government a few tips. Talk about Pot-Kettle.

  • A recent U.S survey shows that many Americans think that Tony Blair is the British Prime Minister. Someone ought to tell them who the real UK Prime Minister is. Darth Mandelson.

  • Mandelson has been quoted as saying that Gordon Brown ought to “lighten up”  a bit. Not THAT smile again PLEASE!!!!  NOOOO!!!

  • What is it about meetings beginning with a “G”? Why is our expectation level do low? Is it because we know that the post-meeting statement has already been written? Is it because all previous meetings were such a monumental waste a waste of resources, time and money? Anyway – who DOES write that n-page statement which announces the next meeting in 6 months? Gordon Brown’s LAST such meeting.

  • Is it true that Obama snubbed Gordon Brown? Obama has had one-on-one meetings withotherleaders. Why not with our own Prime Minister? Is it because of the Megrahi affair or could it be because of the increasingly prominent sell-by date on Gordon Brown’s forehead?

  • Banks are currently reducing their assets and hoarding cash because of liquidity requirements. Put in simple terms, that means that the magic conjured-up money – the so-called Quantitative Easing is making it in through the banks’ back doors but the front doors remain only slightly ajar. READ REST OF ARTICLE

  • In 1998, the Saville Inquiry began its investigations into the shooting of 29 Civil Rights protesters by soldiers of the 1st Battalion of the British  Parachute Regiment. Five protesters were shot in the back and two injured protesters were run down by Army vehicles. Fourteen people died. This was the Bloody Sunday Massacre which took place on 30th January 1972 in Derry. The original Widgery Tribunal concluded that the  soldiers actions could be best described as “bordering on the reckless” . Unsurprisingly, the Widgery report was widely regarded as a whitewash. Hence the Saville Inquiry. Now we hear that the Saville Inquiry will report in March 2010!!! Apparently, there’s a printing issue that needs to be resolved. Once again , this 11-year inquiry brings into focus two great British institutions – queueing and inquiries. Not to mention a steady income for a whole “shark” of lawyers.

  • The anniversary of Lehman Brothers going down the toilet has passed anditisnowayearsincethesolidsreallyhitthe air-conditioning big time. For those who do not really understand finance – and who really does these days, here’s the deal. Politicians and bankers knew for at leat 18 months before the collapse that there was not enough cash in the system andthatmost, if not ALL banks were now standing on foundations of sand. It was only when Lehman had to admit that there was no real money – only paper ” instruments” which could be worth cash , that it was realised that the real currency that the banks had been  dealing-in was bullshit and promises. Politicians are now beginning to strike heroic poses as they tell us how they saved the banking system and that they only-just managed to avert a financial Armageddon. The real fact is that they knew what was happening all along and lived in the HOPE that somehow (they did not know how), the financial system would self-adjust or self-regulate itself back to stability . It didn’t and the solution that is being applied today is exactly the same as that which caused the collapse. Imaginary money. Eighteen months ago, bankers and politicians were HOPING that the system would sort itself out and that is EXACTLY what they are hoping for today. What is really needed is a total restructuring of the banking system but there isn’t the global political will to make that first all-important move.

  • There’s a (denied) rumour that Gordon Brown is going blind. Obviously we all hope that he is not. In spite of the fact that he has all the leadership qualities of damp Kleenex, he is a decent man. The rumour that he is blind has obviously been started by someone who is confusing his eyesight with his policies and management style.

You calling me a banker?

“Move over, Darling. Please!”

Banks are currently reducing their assets and hoarding cash because of liquidity requirements. Put in simple terms, that means that the magic conjured-up money – the so-called Quantitative Easing is making it in through the banks’ back doors but the front doors remain only slightly ajar.

No amount of media-blackmail or Government arm-twisting is going to persuade the banks to start lending to commerce or to the private sector  in reasonable volumes or at reasonable rates. The banks are lending but at nowhere near the volumes needed by the economy. When they do lend, they apply wall-to-wall fees and a starting interest rate of the order of 6% over Base Rate. So, if you factor-in their fees, the actual percentage rate is ridiculously high compared to what little the BANKS are paying for the money and compared to the average company’s profit margin.

Very often finance is over-complicated. For instance, if you are a manufacturer and you have a bank overdraft on which you are paying 10% per year, you need a pretty hefty profit margin in order to make any profit after you have paid your bank charges. Simple.

Currently, margins are so tight that the banks may as well be in a different economy and on another planet because the sums just do not add up. The banks are doing their own thing, apparently with absolutely no reference to what is happening in commerce – especially where interest rates and current commercial margins are concerned.

There are those who seem to think that the current Bank of England Money Sale (Quantitative Easing) is not working. “We can’t tell yet” is a current often-recited bankers’ Mantra. The double uncertainties of whether QE is working and more importantly, whether  the UK will ever be able to repay its currently vast borrowings without further damaging the economy has caused the pound sterling to fall in value. It has begun its short journey South and will be closely followed by the dollar.

Mervyn King, the Governor of the Bank of England wants to add another £25 billion to the Quantitative Easing pot. He is currently in a minority of ONE. The dissent reminds us once again that Economics is largely a matter of opinion, guesswork and misjudgement.

The Chancellor, Alistair Darling still has an occasional bleat about bankers’ bonuses. That is all purely cosmetic. Bankers’ bonuses are trivial in comparison to the current needs of manufacturing and commerce.  In fact, the whole subject of bankers’ bonuses is taking-up a very disproportionate  amount of not-only our media space but also of the Chancellor’s and the Prime Minister’s collective energies. It is a red-herring. This morning, Alistair Darling has again been banging-on about “clawback” and banks holding onto bonuses for three years. It’s all ill-conceived rubbish.

The fact is that the Government has absolutely NO RIGHT to tell any privately-owned company what it should be paying any of its employees. That is up to the owners of the company – the shareholders. However, where the Government is a major shareholder in a company, e.g. RBS, only then is it at liberty to impose its views.

The banking issues will not be solved until there is a dislocation between High Street Banking and Investment Banking.

This morning’s hare-brained scheme was to ask companies  to declare their TOP 20 earners’ incomes. That should work-well for many Hedge Funds! Some only  have 5-10 employees. We’ll know what their secretaries and cleaners are earning which should be useful!!

The Banker Bonus issue is a red herring which the Treasury is using more and more to distract us from the fact that they  not-only made a mess of managing the economy prior to September 2008 but  it now looks increasingly likely that the “cure” that has been applied through the medium of Quantitative Easing only has a 50-50 chance of working.

The real worry, however is that Quantitative Easing was the last throw of the dice – and don’t be fooled by the near-miraculous “recovery” of the Stock Markets. Those Investment Bankers are now gambling with pretend QE money. The end-game will be fascinating.

Wednesday September 23rd 2009

  • Apparently, there is a small but statistically significant rise in patient deaths when junior doctors start work in August. Perhaps the same survey should be done with slightly different parameters: Before pubs open and after closing time.

  • A friend sent me a cartoon yesterday which, for the first time, explained the constant Midde East conflict . Jewish man  looking up at the sky saying, “Now, let me get this straight God. The Arabs get the oil and you want us to cut the end off our what….?” 

  • This snippet explains better than anything the anonymous nature of the Liberals’ leader. Nick Clegg will be delivering the Leader’s rabble-rousing Conference for the THIRD time!! He will attempt to come cross as a TOUGH leader. Doesn’t compute, does it? He always looks as if he’s just taken a “NICE” pill.

  • Justin-lee Collins has said what many are thinking: Bruce Forsyth should have stopped TV presenting three or four years ago. There’s a touch of the Emperor’s New Clothes about the whole thing. So much so that no-one appears willing to say ” Brucie, you are now coming across as an old twat. Piss off”. Instead the poor old bugger is being patronised, allowed to be unfunny (obviously from the tumbleweed school of humour) and worst of all, he’s being referred-to as “sprightly”.An adjective every man dreads because it is THE word which signifies the beginning of the end. It is NOT a compliment. It means that you are past-it and when you attempt to tap dance avec embarrassing Sammy Davis Jr-esque gurning, you look like a swinging cadaver with a ferret up a wet trouser leg.

  • I have just discovered that Chas & Dave have split up.     p.s. I am writing this on Beachy Head.

  • Kristna Rihanoff whose Strictly Come Dancing partner is Joe Calzaghe celebrated her birthday yesterday. Rumour has it that Joe and Kristina have grown very close. I  wonder whether he had any difficuty in wrapping her present?

  • More meaningless military “sincero-talk”today. Acting Sergeant Michael Lockett was blown up by a roadside bomb in Helmand Province.  “There’s now a gap in our ranks that will be so very difficult to fill”  and  “Sgt Lockett’s raw bravery and seflessness cost hm his life but undoubtedly saved that of one of his soldiers.”  are just two more examples from the Army Book of Fine Words. Meaningless twaddle. Sgt Locketthas left behindastrickengirlfriend and three children aged eight, seven and five. “We take solace in the fact that he died doing a job he was born to do” was more puke-inducing bollocks – this time from his father.  Stop this pseudo-heroic crap and bring ALL of our young soldiers back here to the United Kingdom, where they belong. The Taliban certainly do not see these young soldiers as heroes  –  more like fairground ducks.

  • When will the Vatican be called to account over the tens of thousands of children that have been abused by pervert priests? The Catholic Church has been accused at the United Nations Human Rights Council of a systematic and long-standing cover-up. The Vatican is in breach of its obligations under the United Nations Convention on the Rights of the Child. Handing out MILLIONS in compensation is really not the way forward. It’s customary to pay for sex up-front , not ten, twenty or thirty years after the event. Let us hope that one day there will be a time when the Vatican can close its child-abuse fund and get on with the business of religion.

  • Nothing about Gordon Brown today because he hasn’t said anything new or original. Situation normal. 

Tuesday September 22nd 2009

  • Did you see Darth Mandelson being questioned on the subject of bankers’ bonuses last night? As Business Secretary, he has the power to stop the bankers in their tracks. But he cannot and he would not answer any bonus-related questions.

  • General Stanley McChrystal, the top US commander in Afghanistan has warned that the war there could be lost unless there is an increase in troops within a year. He is asking for an additional 30,000 troops.  This is truly developing into another Vietnam. Currently, there are 100,000 troops in Afghanistan, 62,000 of whom are American. Time to talk.

  • The United Kingdom is needlessly wasting resources by sending too many average and some downright thick students to University. In fact, there are too many Universities. Hence the current funding crisis. The solution is so simple that even an Education Minister ought to be able to work it out.

  • The worldwide recession and the resulting drop in consumer demand has had a profound effect on industrial production. That has had an unexpectedly welcome effect on greenhouse gas emission – it has fallen by over 40%. Perhaps the Global Warming Mullahs will take this opportunity to shut up.

  • Anish Kapoor, the 1991 Turner Prize winner has a solo exhibtion the Royal Academy. This event is unusual because Anish lacks the traditional qualification for such a exhibition. He isn’t dead. If you enjoy abstract sculpture and/or you like spouting pretentious arty bollocks, then this exhibition is for you. Here’s a nosegay from Anish himself: “That sense of the poem being put together as word objects relates to sculpture in a very fundamental way. Sculpture also has this ability to be what it isn’t. It’s kind of about the illusory and the real.”Quite.  Anish is very keen on vaginas so do look out for the odd wobbly red letterbox shape.

  • The media seem surprised that construction companies and builders have been ripping-off Local Authorities and other organisations which are spending other peoples’ money. It’s been going on for years. This is from April 2008 – CLICK HERE– and it includes a scene from the Coconut Club, which you will be hearing more and more about over the next few weeks.

  • This week is Climate Week – a crucial  week in the quest for a global climate deal. World leaders are meeting at the UN in New York and a G20 summit in Pittsburgh. Meetings such as this have been going on for a few years now so let us hope that the current series of meetings produces something that has been sadly missing from previous encounters. Action. In December the Copenhagen environmental conference will hopefully be the real turning point and turn meetings into agreements into action.

  • Global Warming: Predictions are made using computer models and although the general consensus is that Global Warming is occurring, there are scientists (the so-called “deniers”) who have alternative models which suggest that the Earth will cool before its becomes hotter. Regrettably, the religious-like aspects of Global Warming, treat scientists who deny Global Warming as heretics who are often lampooned andmarginalisedby both the scientific and political communities.  The latest of these is a   Professor Mojib Latif, from the Leibniz Institute of Marine Sciences at Kiel,  who has suggested that the long-term warming trend could be masked – perhaps for as long as 10 or 20 years – by a temporary cooling caused by natural fluctuations in currents and temperatures called the NorthAtlanticOscillation. It all seems to depend on which set of data is plugged into which computer model.  However, it is the politicians who are the true believers who only appear to read data which supports their dogma.

  • Helen Goddard , music teacher has been jailed for 15-months as the result of a lesbian affair with a 15-year-old pupil. How modern. Not nice – but definitely “of the age”.

  • Rumour has it that Louis Walsh, the Irish spud  and pop manager from the X-factor is going under the knife in order to improve his looks. There must be a long queue of knife-sharpening volunteers. Surprising that he hasn’t yet benefited from sitting so close to that pair of  BotoxedBookends – Simon Cowell and Danni Minogue – by osmosis.

  • Sir Bobby Robson’s Memorial service must have been an ordeal for Paul Gascoigne. There was only one photo of Gazza that the snappers wanted – and they got it.

  • This is the sort of medical research that we like:  If you have alcohol in your bloodstream, you are far less likely to die from a head injury, says Dr Ali Salim from Los Angeles. The findings are based on a 5-year study of 38,000 people. You can’t be too careful. Cheers.

  • Nothing in the Press about Jordan today. Max Clifford must be on a long weekend break.

  • Attorney-General Baroness Scotland is still facing an uncertain future. Gordon Brown, her boss is being his usual decisive self. This is what he said this morning: “We will have to find out what has actually happened and I will have to wait for that report this morning and she will want to answer the questions that are put to her. We will have to make decisions.”  Brown obviously has not been watching the news or reading his Daily Worker. The fact is that Baroness Scotland employed someone who did not have authorisation to work in the United Kingdom. In fact, her papers expired five years ago. As usual, the long grass is quivering in anticipation.

Monday September 21st 2009

  • It now appears that Womens World  800m champion Caster Semenya was tested ages ago and there has been concern over her sex for months. The issue did not suddenly materialise at the last Word Championships. The whole thing has been handed so badly that there is every likelihood of IAAF resignations.

  • Baroness Scotland will probably resign this week. If every politician who made a mistake resigned, Westminster would be empty by now.

  • It looks as if Megrahi is going to be the first criminal to be retried on the Internet. We’re still awating an intervention from God and the miracle recovery. There has been one previous miraculous recovery by a convicted criminal. Ernest Saunders (1980s Guinness Scandal) was freed by a judge because he was suffering from Alzheimer’s. So far, Ernest Saunders in the first  and only recorded case of a total recovery from Alzheimer’s. The recovery took place soon after he was released from jail. Speaking of miraculous recoveries – Ronnie “released on compassionate grounds” Biggs has been seen out and about on his mobility scooter. Megrahi or Biggs? I’m off to Ladbrokes to make a small investment.

  • The Liberals are having their occasional rush of blood and putting themselves forward as a party of government. Remember David Steel in 1981? “Go back to your constituencies and prepare for government.”  Forget it boys and girls. There’s Vince Cable and Norman Baker and after that it all becomes a bit anonymous. Nick who?

  • The Liberals want to tax home owners whose properyis worth in excess of a million. They will be the only Party whose policies will be derailed by a property crash andonthatbasisalone, this policy has the depth and solidity of  a closing-time back-of-a-beermat “I really lovvve you”  concept. They’re not sponsored by the Royal Institution of Chartered Surveyors, are they? This new policy is the Liberals’ biggest-ever lurch to the left. The sort of thing that New Labour would have done when they were Proper Labour.

  • The elephant in the room – the one that no-one is talking about is still there. I am of course referring to the economy.

  • Several big companies, including a couple of large builders as well as the Royal Bank of Scotland will be coming to market very soon to raise many billions. Watch those share prices.  Here we go again.

  • Have you noticed how Kerry Katona’s nose is looking more and more like Danniella Westbrook’s last nose-but-one?

  • The Education bods are gettinng a bit twitchy at Ed Balls’ suggestions of swingeing cuts in Education. It is the designer-suited BMW-driving “advisers” at County Hall who should think twice before renewing their gym membership or booking that holiday in Tuscany. CLICK HERE

  • I did not see Alesha Dixon’s debut on Strictly Whatsit but it sounds as if she had a list of pre-prepared crap written down, dispensed it quite randomly and personalised it by adding bad grammar.

  • Rules are being published this week which will exempt family and friends from being prosecuted after assisting in a suicide.  It is purely coincidental that these rules are being rushed through just before Gordon Brown’s conference speech.

  • Manchester City manger Mark Hughes is complaining that too much time was added on at the endofyesterday’sderbygame with Mancheser United.  Michael Owen scored Man Utd’s winning goal in he 97th minute. Hughes forgets that his team had the identical extra time in which to score.

Monday September 7th 2009-Friday September 18th 2009

Friday September 18th 2009 

  • There has been some concern that Romell Broom may have suffered mental anguish when two Ohio State officials failed to find a vein in order to deliver a fatal injection. According to Broom’s lawyer, Broom had suffered both “mental and physical injuries” and apparently became distressed and appeared to cry. Broom was convicted of raping and then killing a 14 year-old girl.
  • We’re too fat, we drink too much alcohol, we’re unfit, we ingest female hormones in our meat  and weedkillers from our vegetables and we’re too stressed. Paradoxically, our life expectancy is increasing.
  • Alistair Darling is engaged in a series of meetings in order to decide where spending cuts can be made. If you’re expecting decisions within the next few months – stop being so silly. Although professional pundits do now have the opportunity to make pointless predictions.

  • Andy Burnham is suggesting yet more NHS changes. The God of Change strikes again! This month’s idea is that we will all be able to choose our GP. I would like one that’s qualified, understands human anatomy and is sober.

  • Baroness Scotland should know that in a Court of Law, ignorance is no defence. Mind you, the Baroness is the Attorney General. Hopefully, hiring someone called Loloahi Tapui(clue!) with out-of-date papers was just an oversight and as such, does not generate a witch-hunt. Oh yes – there’s an enquiry. There’s always a feckin’ enquiry.

  • Suddenly, Jordan doesn’t want to talk about “the rape”. It seems that her PR people are running out of interesting stories. The only remaining possbilities are either  ” I was abused as a child” or “I was abducted by aliens”.

  • Bit of a “to-do” about  unofficial sperm donors. Apparently, ladies can contact a sperm donor  on-line, arrange a meeting and either be handed a container-full of the stuff or on occasion have it delivered direct through the medium of sex. Hence the phrase : “”Bottled or draught?”  Sounds like an excellent service as well as an interesting career move, although it could mess-up the old CV, especially if the CV is printed on a sheet of Kleenex. Just realised that if this type of work is a career, the phrase “hand job” begins to make sense.

  • How would the management at Student Loans UK feel if they were told that because of administrative incompetence, their September salaries will be paid at the end of October. They would probably be quite upset. Next question: How do young kids with the incredible stress associated with leaving home feel-when they’re told by Student Loans UK that their University grants will be paid “about” four weeks late? Why is the beginning of the academic year ALWAYS a surprise? For the record and to help Student Loans UK: The next academic year will be starting in October 2010. Hopefully, that’s enough notice.

  • Scientists at Newcastle University have produced human sperm in the laboratory. Didn’t know that there was a shortage. Just take a chipping hammer to any Confessional carpet.

  • Gordon Brown said today “Cooperation between nations at the G20 summit will be crucial to ensure global economic recovery”  That is probably the twentieth version of the same sentence . It is a truism and it’s boring. Here’s another sentence which I hope Gordon finds as interesting as his own deep thoughts: ” The sun is in the sky”

  • Here is a quote from this evening’s No 10 bulletin: “The Prime Minister is launching a brand new podcast series this week talking directly to you about the big issues of the day. The podcasts, which will be available on our iTunes channel andonYouTube, will be recorded at Downing Street or around the world when the Prime Minister is travelling.”  Wow! That Gordon Brown is so “street”  -using that Interwebthingytoconnectwith the YouTube dudes. Way to go, MC Gordo! Soon,  he’ll be buying a pair of those really cool Levi Strauss blue denim casual trousers with the turn-ups, copper rivets and the little red label. Sound! Should go well with the black brogues.

  • Remember what I told you about the American dollar going into freefall. Soon. Continue reading Monday September 7th 2009-Friday September 18th 2009

The Phony Economy

The approximate position of the British Economy

 

One of the great questions of our age is “Have the billions handed over to the banks had any affect on the economy?”

Some say “YES”, some say “NO” and others say ” IT’S TOO EARLY TO TELL”

Currently , we appear to be living through what can only be described as a Phony Economy.  The Footsie looks much healthier and there is  sort of “whistle in the dark” pretend-confidence in the markets. Pundits are talking-up the markets, politicians are beginning to make soothing noises some are even daring to think about non-economics-related topics. It’s all very disconcerting. Continue reading The Phony Economy