Thursday, October 16, 2008

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

Wednesday, October 15, 2008

D Minus for the Schools Minister

The new Schools minister Sarah McCarthy-Fry admitted to Michael Gove in a Parliamentary Question that just 4 of the 113 letters about the government’s new diplomas have been supportive:
School Leaving: Qualifications

Michael Gove: To ask the Secretary of State for Children, Schools and Families how many letters he has received from members of the public on the 14 to 19 diplomas in the last three months; and what percentage of those letters have supported the programme. [224564]

Sarah McCarthy-Fry: Over last three months we have received a total of 113 pieces of correspondence in regard to diplomas. Of which four (4.52%) were specifically in support of the introduction of diplomas. The remaining 109 pieces of correspondence were general inquiries.

Doh!

4 / 113 = 3.539%

The Schools Minister can’t do basic maths…

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.

Wrong Kind of Rich?

Is Guido the only one who finds it a bit of a cheek that Will Hutton and Polly Toynbee are media millionaires who make their money out of condemning other rich people? They both have homes in the country and in London? Polly famously also has her home in sunny Tuscany, yet they endlessly tell us how they deplore inequality. They both sell books in large numbers and their columns are well rewarded beyond the dreams of the average and minimum wage workers they cry tears over.Guido is not going to plead personal poverty, risk brings rewards. What have Hutton or Toynbee ever produced besides words on paper, how many jobs have they created, how many businesses have they financed? Have they ever had to make payroll at the end of the month? Worried about how they were going to pay staff?

Why is making millions from pontificating (as they do) morally superior to making millions from investing in and running companies? It seems that out and out capitalists are the wrong kind of rich whereas out and out media pundits are the right kind of rich, akin to how the aristocracy of old always looked down on those in trade. Remember their own substantial wealth when they condemn capitalism.

Who really has unjust rewards – those who create wealth and jobs or those who condemn them?

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.


Tuesday, October 14, 2008

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.

Telegraph Editor Gushes Praise on Gordon for "Saving the World"

Just now the Telegraph’s Berkeley Hotel party to celebrate the launch of their new business section is breaking up. Proof that the Daily Labourgraph is no longer the preferred reading of the City comes in this vignette: Will Lewis announced a special guest and in walked Gordon Brown, in his speech of introduction Lewis troweled it on thick how Gordon had saved the banking system to guests including City commissar Paul Myners and Robert Peston. Some of the more traditional Telegraph reading City types were less enamoured…

Seen Elsewhere

9 Mansion Tax Questions for Ed Balls | TPA
Politicians are Lying to You About Immigration | Alex Wickham
Give Journalists Public Interest Defence in Law | Guardian
Cameron is Going to Have to Deal With UKIP | Dan Hodges
Opinions on Key Issues By Constituency | Red Box
Britain Irrelevant Inside EU | Dan Hannan
Cameron Heading for Fall on Europe | Rachel Sylvester
Lords Speaker Spends £350 on Two Mile Limo Ride | Sun
Shapps Slaps Down Barroso “Propaganda” | City AM
Bookies v Pollsters: What We Learned From IndyRef | Paddy Power
Guido’s Column | Sun


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Chris Bryant talks to the Times Diary about a famous gay actor:

“I don’t think I’ve had sex with him. He says we had sex in Clapham. I’m fairly certain I’ve never had sex south of the river”



Progressive Inclusion Champion says:

Great to hear Carswell call for inclusive policies and that UKIP must stand for first and second generation immigrants as much as the English.


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