Wednesday, September 17, 2008

HBOS Collapse : Jonah Brown Was There Again

The refurbished Bank of Scotland head office on “The Mound”, was formally opened by the Chancellor, Gordon Brown, at a gala reception on September 7, 2006.

Comrade Mason Replies

After the kerfuffle about the mixed up market report last night this (presumably genuine) communication from Newsnight’s business reporter and trade union leader has come in:
Guido – I should probably have said the value of its shares fell 48% in after market pricing, or some similar gobbledygook. As your other commenters point out the issue of whether there is a futures “market” is philosophically moot. Unfortunately the words “futures market” were in a piece of paper printed off into my hands literally as the 5-strong team of makeup women and masseurs was prepping me for my live appearance and seconds before we went on air. The words “futures market” entered my brain while I was puzzling whether the 48% fall really mattered in such an illiquid market. But hey, guys: if you think I sound like a hysterical Trot, you should listen to McCain!

Fair enough. Guido is in no position to criticise someone for screwing up live on Newsnight…

Incidentally, that last sentence is an interesting point, Guido will only note that the lead piece on the show tonight is scheduled to be “Does capitalism still work?” Producers with a sense of humour…

Clegg Speech : Tax Cuts and Social Justice

He also said the Labour Party was finished. Not a bad speech.

Who Told Peston?

If as many suspect the Treasury panicked and tipped Peston off about the HBOS bid in order to stem the collapse we could be looking at serious consequences.

This is a clear breach of the Take Over Code:

2.2 WHEN AN ANNOUNCEMENT IS REQUIRED

An announcement is required:—

… when, following an approach to the offeree company, the offeree company is the subject of rumour and speculation or there is an untoward movement in its share price;

when, before an approach has been made, the offeree company is the subject of rumour and speculation or there is an untoward movement in its share price and there are reasonable grounds for concluding that it is the potential offeror’s actions (whether through inadequate security or otherwise) which have led to the situation

It is doubly serious, because he said the price would be near £3, then said it would be nearer £2, millions have changed hands on the basis of false information…

UPDATE : Informed City co-conspirator emails

What is more significant is the fact that at least one city law firm is in the early stages of rounding up plaintiffs among the fund community for an action relating to the price manipulation of HBOS shares this morning.

Peston admitted “over-egging” the price while the panel stood by and the companies made no announcements. No suspension of trading either.

Funds who sustained losses stopping out short positions entered at around 180 – the key level that broke down on volume over the past couple of days, will be placing the blame fairly and squarely with the entirely false idea given cynically to retail punters by the bbc that the price would be set around the 300p level.

This is going to get very interesting indeed.

UPDATE : Peston now says on his blog “I am hearing that this deal has been negotiated at a very high pay grade level, with the Prime Minister, Gordon Brown, talking to Sir Victor Blank, chairman of Lloyds TSB, about how helpful it would be if Sir Victor could bring himself to end the uncertainty hanging over HBOS by buying it.” He also says the deal is an all share deal which, wait for it, will be worth near £3!

UPDATE II : Have just been reminded that Peston wrote Brown’s biography Brown’s Britain.

+++ HBOS Collapses 38% +++

UPDATE : Rumours circulating that Lloyds are looking to buy HBOS on the cheap. HBOS slumped 51% at one point, now bounced to off 19%. FSA has released a statement saying HBOS is well capitalised…
UPDATE II : Robert Peston’s reporting has been, errm, interesting. He said earlier this morning that Lloyds was looking at paying £3 for HBOS. This seems suspiciously toppy.

Peston should have known that the disastrous HBOS rights issue in late July was priced at £2.75. The market shunned it with the underwriters getting stuffed and left holding two-thirds of the £4 billion offering. So why would Lloyds want to pay more than the price which was shunned two months ago when conditions have deteriorated? Doh! He now says it will be nearer to £2.

Peston needs to be careful that he doesn’t get accused of creating a false market. There are laws and a Stock Exchange Regulatory New Service for market moving news!

+++ FTSE Drops Despite AIG $85 Billion Bail-Out +++

FTSE looks set to fall below the psychologically important 5000 level….

Tuesday, September 16, 2008

Pensions Plundered, Stocks Slumping, Gordon’s Dead-Hand

Some commentators (who should know better) warn that in these times of economic turbulence we should keep Gordon at the helm. It is a desperate line seized on and spun by his few remaining supporters. Who, they ask, knows the economy better than Gordon Brown? This is repeated so often you would think it a truism. Fraser Nelson pointed out some time ago that all Gordon knows about the economy is how to tax it. Look at how the stock market has performed during his chancellorship. Guido has pointed out before how much better other G7 stock markets have performed in comparison. Gordon’s plundering of our retirement pensions to fund his profligacy has sucked capital out of pensions to pour into his social engineering.

In the ten years prior to May 1997 before Gordon got his hands on the levers of the economy the FTSE rose from less than 2000 to more 4000. After a decade of Gordon’s stewardship of the economy the stock market has gone nowhere. Pensions have had no capital gains, what gains they have made have been taxed. During his time we have had the first run on a bank for a century. As the FTSE teeters at the 5000 level those who are retiring soon have a terrible future ahead, whereas at one time the British private pension system was a model for other countries. UK stocks under performance compared to other countries is partly due to Gordon looting pension funds to pay for current spending.

Newsnight Reports on a Market That Doesn’t Exist

Well this is a first, they have in the past reported up markets down, down markets up and once even reported dramatic moves in a market that was closed. Paul Mason has just breathlessly reported from New York that a late breaking after market story on the Bloomberg newswire has “halved AIG’s share price on the futures markets”. There is no open futures market for shares, as anybody who knew anything about financial markets would know.

There are electronic markets where stocks trade after hours. Perhaps that is what he meant? With Newsnight’s market reporting you just never know.

UPDATED : Who are the "Handful"?

N.B. This article was first published on the morning of Saturday, 13 September 2008, it is being updated and re-dated on a rolling basis as more names come out.

Guido has yet to see a list of the “handful” of MPs who want a leadership election. So with the help of you co-conspirators shall we compile the list? Guido will start it off:

Openly
Janet Anderson
Stephen Byers
David Cairns
Charles Clarke
Jim Dowd
Kate Hoey
Frank Field
Barry Gardiner
Ian Gibson
Mike Hall
George Howarth
Peter Kilfoyle
Fiona Mactaggart
Siobhain McDonagh
John McDonnell
Alan Milburn
Greg Pope
Gordon Prentice
Joan Ryan
Graham Stringer
Gisela Stuart

Coded
Karen Buck
Jon Cruddas
Patricia Hewitt
Kelvin Hopkins
Eric Joyce
Sally Keeble
Stephen Ladyman
Ivan Lewis
Martin Linton
Shona McIsaac
Denis MacShane
David Miliband
Margaret Moran
John Reid
Tom Levitt
Paddy Tipping

Add names and references in the comments.

UPDATE : Other likely suspects are Jeremy Corbyn, Anne Cryer, Ruth Kelly, Michael Meacher, Tessa Jowell.

UPDATE 20.30 13/9 : This represents the best information emailed in and from the news wires. Cruddas has arguably given an ambiguous steer. No doubt some left-wingers have been missed. The list has been updated throughout the day. Quite a few handfuls at the latest count. Michael White speculates that the numbers could be as many as sixty.

Rat Race Continues

The rats are bailing out of the Downing Street ship fast and furious nowadays. Last week Paul Sinclair jumped, this week it is the turn of Jo Dipple.

The Prime Mentalist’s strategic communications adviser is a former Daily Mirror journalist. She is leaving to become a lobbyist. No news on Stephen Carter’s exit, rumours still circulate in Labour circles that Maguire could succeed him. C’mon Kevin, save Gordon!


Seen Elsewhere

Osborne’s Daycare Obsession is a Time Bomb | Kathy Gyngell
BBC Marr Pinko Trying to Ban the Queen | Speccie
Eric Hobsbawm: Companion of Dishonour | Standpoint
Guido Party Gossip | Iain Dale
Russell Brand Comes Out as 9/11 Truther | Guardian
Health Revolution is Underway | Fraser Nelson
UKIP Gets Professional | Red Box
Kelly Tolhurst Wins Rochester Open Primary | BBC
No.10 Ambushed by EU Prosperity Tax | Times
10 Years of Guido | Iain Dale
Tory MP Tells Leftie Jon Snow to Retire | Guardian


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Rob Colvile reviews Russell Brand’s new book:

“Oddly, the person I feel sorriest for isn’t Brand himself – although he certainly comes across as a rather pitiable figure, projecting his own brokenness on to the world around him – but Johann Hari. Drummed out of Fleet Street for plagiarism, the former Independent columnist has washed up as “my mate Johann, who’s been doing research for this book”. For a genuinely talented polemicist, it would have been a humbling experience to have to treat this sub-undergraduate dross as the scintillating wisdom of a philosopher-king.”



Mycroft says:

Have you read the last bit of Animal Farm?

You know where the animals are looking through the Farmhouse window?

My TV screen was that window at lunch-time today.

Be careful, the sudden self-congratulatory tone, the slightly pudgy outline of indulgence and you become exactly what you should despise.

The jolly face of the Quisling Cameron poses for your camera has mesmerised and deceived you, you who were once not so deceived.

You were no firebrand, you were a damp squib in my opinion, sorry.

You need a damned good kick up the ahse!


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