Jeff Randall on Sky really laid into Brown this week when he tried to pull his usual line in “Brownies”, not that it made much difference, Brown just stuck to his lines. The viewer was able to make up their mind who to believe. Marr really should stick to reporting, his interviews are pathetic.
Gordon seemed to be testing out a new line, that he had been telling all the other finance ministers (who were not as brilliant and as far-seeing as him) that we need a global regulator for years. One that would allow 125% mortgages, not monitor liquidity and wrench the central bank away from the government debt markets. If only the Americans had listened to him…
No questions asked…
Who really expected the wholesale bailing out of Wall Street? The Sovietisation of the Street by Paulson, the former Goldman Sachs CEO, means that never again will the U.S. be able to preach the advance of free markets to developing countries with authority. These extraordinary times have seen Treasuries bonds with zero-yield, effectively you might as well put the money under the bed.
Anyone familiar with Ayn Rand’s novel Atlas Shrugged will be able to see the coming consequences, the end of free capital markets. The voters forget at their peril how and who finances the billion-dollar chip manufacturing plants, the satellites, the billion dollar pills from high risk bio-technology that will cure disease, the multi-billion dollar networks that make us such an inter-connected globe. There will be new regulations galore, the taxpayers will be raped as they have never been raped before, it seems this is the price the U.S. authorities think has to be paid to stave off financial meltdown and a recession that could turn into a depression. The latter prospect seems a product of panic rather than reason.
The investment banking model since the 1990s was flawed not by lack of regulation, it was flawed because of poor governance. Traders and management were incentivised to take risk for reward with minimal personal downside. Bank shareholders have lost money hand over fist whilst their hired employees have been paid hundreds of millions. The complex derivative structures that underpinned sub-prime lending were opaque to the point of incomprehensibility.
The banning of short sellers is a side show, it is merely populist politicking. It will make conservative hedging very difficult, it raises the cost of capital to corporates and it will not change the underlying fundamentals. It will also create liquidity problems and a whole host of technical difficulties.
Are banks safer because it is illegal to short them? Has liquidity returned to the money markets? Are mortgage assets recovering? No, no, no. Unless Paulson announces a plan to put U.S. taxpayers on the hook for billions of dollars in risky sub-prime mortgages this weekend, this stock rally will come completely unstuck… and Guido will be short stocks again.
Gordon Brown’s Sky interview, where he blamed investment bank’s off-balance-sheet liabilities for the credit crunch, was an unconsciously revealing moment. What is the trillion pounds of debt in PFI contracts and unfunded state pensions if not Gordon’s very own off-balance-sheet liability? Gordon and Ed Balls designed the world’s biggest off-balance-sheet structure to massage the PSBR, it will have to be paid down by generations to come. Brown’s legacy will be that British children, and their children also, will be paying off Gordon’s debt bubble.
ConservativeHome makes Team Cameron uncomfortable but it performs a very useful function in encouraging more honest introspection and in doing so strengthens the party and makes it more responsive to the grassroots.
LabourHome has in the past been too willing to reflect the party line, failing organisations like to keep their troubles secret, honesty and openness are a sign of confidence and strength. LabourHome is not as Luke Akehurst claims “unhelpful to the Party”, it is doing it a service by holding up a mirror. To fix the problem, you first have to face up to it.
Miliband is the favoured successor of nearly a quarter (24.6%) of those polled…
First they came for the capitalists…
(Guido is short FTSE Futures. What are you going to do Gordon?)
Gordon Brown’s authority was further undermined last night after it emerged several ministers sharply criticised the decision to use this week’s political cabinet to discuss Tory weaknesses rather than Labour’s own unpopularity. One member said the tenor of the meeting was “bizarre and a denial of reality as we sat listening to how deep down David Cameron is not really popular”.
Usage of the word “bizarre” by Miliband:
Tuesday, 9 September 2008
We badly need a treaty to control the arms trade
It is bizarre that we’ve treaties to stop nuclear arms, but not to stop weapons flooding into conflict zones
David Miliband interview on Radio 5 LiveSunday Business Post
February 2, 2008
“Well I think it’s a very bizarre comparison to compare Robert Mugabe’s Zimbabwe with China.“
June 22, 2008
…The other member states see themselves as perfectly entitled to decide on the basis of their own national interests – just as Ireland has – whether to ratify or not. British foreign secretary David Miliband described the idea that Britain should not take its own view of treaty ratification as ”bizarre’‘.
May 12, 2008
Disease ‘could push Burma toll to 1.5m’
…Mr Miliband said the decision to go ahead with the poll, despite the crisis was ‘bizarre’.
March 26, 2008
Our troops deserve full inquiry on Iraq, say Tories
..But Foreign Secretary David Miliband said: ‘There is agreement that an inquiry into the Iraq war will be necessary.’ He added: ‘Given reports from Basra today, most people would see that as a bizarre choice of priority now. We say the right time to look at these issues and review the lessons learned is when our troops have finished their work in Iraq.’
Trust Guido on this, it will be denied, but Miliband was the cabinet minister…
Polling Averages Trend | PoliticalBetting.com
Speaker Faces Questions Over Pass for Donor | Sun
Tory MPs’ Visit to Israel Condemned | Guardian
Labour Was Too Slow for the Squeezed Middle | FT
Papers Pan Cam’s Immigration Pledge | ConHome
Deane of St Edmundsbury? | Times
Pay Volunteers and They Become Cheap Labour | Jill Kirby
UKIP Fundraiser Was Jailed for Running Brothels | Times
Bercow Faces Probe Over Pass Mystery | Mirror
Harman Breaks Rules on Paying Staff | Express
Labour Whinge About Sandi Toksvig Joke | Mail
John McTernan told Channel 4 News…
“You can’t make an omelette without breaking a few eggs, you don’t win in politics without breaking legs.”
What time will dinner be ready this evening?
Rob Wilson MP
In the interests of me I am placing a copy of this email in the public domain.