Credit Crunch : Irish Politicians Lead with Pay Cuts

Hopefully this is another Irish example that will be followed here. The Irish President Mary McAleese has announced that she will be taking a 10% pay cut in light of the current budgetary troubles. The finance Minister Brian Lenihan says he and his ministerial colleagues will also take a 10% wage cut. The opposition leader has instructed his party’s parliamentarians to take a 5% cut. The governor of the Irish Central Bank and Financial Services Authority has volunteered to also surrender 10% of pay. RTÉ’s top six executives are taking a “significant reduction” in pay. This follows the government’s announcement of a round of spending cuts as recession bites.

The Irish ruling elite realise that they need to show leadership by example in tough times.

Will British politicians follow suit? After all their pension’s profited from short selling. Will they get their snouts out of the hard-pressed taxpayer provided gold-plated troughs? Perhaps some of the senior executives at the BBC could follow the example of their counterparts at the Irish state broadcaster? They all want the bankers to sacrifice their bonuses, but don’t the Chairman of the FSA and the Governor of the Bank of England need to make sacrifices? It is not as if they have been brilliant at bank regulation. If they were all paid on a performance-related basis they should be losing 30% or more – the same as the stock market has cost pensioners…

City Starts to See Capital Flight, Lehmans Regulatory Mess Forces More Selling, Italy Could Bring Down the Euro

The return of socialism to British shores and the expropriation under terror laws of Icelandic assets has unnerved some foreign investors. The problem with the government doing things out of expediency in pursuit of headlines is that the actions are remembered long after the headlines have faded. “If it can happen to Iceland it can happen to us” some of the huge sovereign wealth funds will be thinking. Trust is key to successful markets, would you risk trusting this government?

Elsewhere fund managers are seeking a quick resolution of Lehmans bankruptcy issues, billions remain frozen in accounts resulting in margin calls on fund managers unable to retrieve securities from the Lehmans administrator – making them forced sellers and an extra downward pressure on London’s markets. The FSA or the Bank of England needs to untangle this mess urgently. Unfortunately it is unclear who has responsibility under Gordon’s regulatory regime.

City law firms are dusting off old legal tomes from the seventies on sovereign defaults – when countries go into bankruptcy – Iceland is on the edge. What will surprise many is that Italy is the second candidate for bankruptcy. How will the Euro survive a member country’s financial collapse? Italy has cooked the books since before even joining the euro. Bond markets know it, the wide spread between Italian government bonds and German government bonds shows that many believe that European unity will not include the Bundesbank standing behind Italian Buoni del. Tesoro Pluriennali. If Italy fails what happens to the European project?

Markets Give Gordon Thumbs Down

So how many shares opened up this morning? None.

Hat-tip : Alphaville

Politicians v Drinkers

Guido always says an advertisement is not an endorsement, however these Drinker’s Alliance ads are very good, laying into politicians who get taxpayer subsidised booze when they want to raise prices for the rest of us. Guaranteeing 101% support from Guido.

The campaign adverts should be good, they were done by Blue State Digital, the people who do Obama’s online campaigning and made their name with this brilliant attack video. Word is that Blue State Digital have hired Matthew Macgregor to run a soon to be opened London office. Macgregor worked on Ken Livingstone’s 2008 Mayoral campaign, for War on Want, TULO and Jon Cruddas’ deputy leadership campaign. Hopefully this campaign will be one he wins.

BBC Gets Ready to Celebrate Obama Victory

click to enlarge
Guido has got hold of an invite to an Obama victory party sent out by BBC Wales political reporter Toby Mason. Now there are strict rules about impartiality at the BBC, particularly for their political reporters. Guido spoke to Toby about his party and asked him if it was perhaps a little partisan in tone. He’s getting back to Guido….

Rumour reaches Guido that despite the Credit Crunch the biggest party in New York on election night will be held by… the BBC. It is a fact that the BBC has more reporters covering the U.S. election than any domestic American broadcast network. Evidence, if evidence was needed, that it is incredibly bloated and over-funded. Bet the Beeboids can’t wait to crack open the champagne…

UPDATE : The Indy reports that a memo has gone out to Beeboids to cut back on the Champagne.


Tory Script Includes Dramatic Pause

According to ConservativeHome the Tories have decided that the narrative and the popular perception of Gordon “saving the banking system” is too hard to overcome currently. As head of government Gordon is the financial pilot in the cockpit waving to admirers as he performs acrobatic and risky financial stunts above the heads of the public – who can only hope he doesn’t come crashing down on their heads.

Vince Cable is ignored on the ground shouting random directions to attract attention from the crowd. Little can be done to avoid Gordon claiming credit and to be fair, his contemporary version of the Swedish bail-out model was better than the Paulson Plan Mk 1. The Tories plan in their attack to hold off until recession bites and then point the public towards Gordon and give him the credit he deserves for the magnitude of the bust.

Might work, though Gordon will try to pass the buck as ever, blaming Iceland or the non-appearance of the tooth fairy for Britain’s woes. The triumphalism of this week may fade from the public’s memory pretty quick. Danny Finkelstein has nailed it to Gordon, If this is a triumph, I’d hate to see a disaster. Fink’s argument needs to be re-scripted in populist form.

In a month or so attack videos need to replay Gordon intoning an end to “boom and bust” over and over again at different times in different ties, than replay him asking last week “has another bank gone bust?”, zooming in slow motion on to that, for once, authentic smile. As recession brings unemployment and repossessions, his self confession to presiding over the age of irresponsibly low interest rates and a failed regulatory regime he designed needs to be drummed into voters – along with Gordon’s smile of triumph amidst disaster.

Exclusive : Gordon "Come Campaign With Me in Glenrothes

McCain – Is He Really Out of the Race?

Betfair is offering 5/1 on a McCain victory. That seems a bit steep for a two horse race. Sure he is behind, sure Palin is appalling the East Coast liberal media and the BBC, but 5/1?

Tempting odds for a

[…]

+ READ MORE +

Where’s Our Bail-Out? The Bankers Got Theirs…

Now Brown is bailing out the bankers with the taxpayers money the question Guido wants to answered is: Where is our bail-out?

Billions in future tax payments are being risked to bankers. They are supposed to pay back the debt

[…]

+ READ MORE +

Lehman Derivatives Defusing Safely

The unwinding of Lehman’s credit default swaps appears to be going well. Market nervousness about systemic risk was said to be at the heart of banks hoarding cash, no financial detonations have been reported. Market authorities reckon the net losses

[…]

+ READ MORE +

Mandy’s Chinky Drinky Kidney Linky

Peter Mandelson drank Chinese milk 9 days before his kidney problems surfaced. He flamboyantly drank a glass in front of the Chinese media to “show his support for the Chinese dairy industry” which has been hit child poisoning contamination disasters.

[…]

+ READ MORE +



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Quote of the Day

Liz Kendall is asked by Tom Newton Dunn if she would ever ban the Sun from one of her press conferences:

“If you stripped naked and ran in front of me, Tom, I might have second thoughts about it, but apart from that, no.”

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