Balls Drop

balls won't drop

Readers who managed to pick up a copy of the Daily Guido on April Fool’s will have seen our sports leader on why Norwich City (chairman one Ed Balls) would likely stay in the Premier League this season. Much like in the General Election, the performance of a Balls-headed enterprise was significantly overestimated…

Norwich have been relegated from the Premier League. Despite having the sixth largest spend in the January transfer window, the former shadow chancellor’s team will go back down to the Championship. They spent the boom, and they’ve gone bust…

Those Massive Spending Cuts in Full

Listening to the BBC or reading left-wing newspapers and blogs would lead you to think we were about to suffer shock-doctrine economics at the hands of the Coalition requiring martial law to enforce.  The fact is that at the end of this parliament government spending will be up another 9%.

The public sector is merely looking at below inflation spending increases, but increases nevertheless. There are not going to be across the board spending cuts, there is going to be a re-prioritisation of resources, with slower overall spending growth. George Osborne is no Pinochet…

Incidentally it could be worse, in Obama’s United Soviets of America the White House is planning (Brown-style) to maintain 10% deficit financing next year. Within a generation the White House itself is predicting a 25% deficit. Which means Greek style bankruptcy…

Friday Caption Competition (Fool and Fuld Edition)

Brown Attacks "Moral Bankruptcy" of Goldman Sachs

On the Marr show Gordon raged against the moral bankruptcy of Goldman Sachs; “I want a special investigation done into what has happened at Goldman Sachs.”

Perhaps he could ask Gavyn Davies to investigate? For many years he has been advised by Gavyn Davies, who made some £150 million during his period as a Goldman Sachs partner.

It was Davies who last year urged Gordon to implement Mugabenomics, turn on the printing presses and call it quantitative easing. Davies has been a big donor to the Labour Party and a long-term supporter. Davies’ wife Sue Nye was Gordon’s private secretary in Downing Street and they are known to be good friends. Perhaps it was they who stole Gordon’s moral compass.

UPDATE : The more Guido thinks about this, the more he likes Gordon’s idea. Questions Guido would like the Goldman Sachs special investigator to get answered:

  • Exactly how many boardroom lunches and suchlike did Gordon Brown have with Goldman Sachs figures?
  • During the many lunches Gordon had with Goldman Sachs did he discuss policy or matters which they were able to exploit to their advantage in the markets?
  • Goldmans were known to be major sellers of gold before Brown announced his extraordinarily ill-conceived plan to sell the Bank of England’s gold reserves.
  • Gavyn Davies was an adviser to Gordon Brown during this period.  Did he recommend, advise on or know anything of the intended gold sales policy?  Did Sue Nye know of the intention to sell gold?


These are not matters of little import, Gordon’s gold sales debacle cost the Treasury £6 billion, the amount that Gordon claims will devastate the economy if the Tories cut it from public spending. The bank is known at rival firms as ‘Government Sachs’ because senior partners keep so close to governments and in particular finance ministries…

Double Dip Anyone?

Following the longest recession in history Britain posted its first-ever budget deficit for the month of January.  Usually January is a bumper month for tax receipts.  Unfunded government over-spending was £4.3 billion, when consensus economists were forecasting a £2.6 billion surplus, according to the median of 16 forecasts in a Bloomberg News survey.

Don’t rule out a double-dip recession.  With neither the Conservatives or Labour offering policies to kick-start consumer spending and GDP growth, we could be in a lot of trouble…

3.5% Inflation Shatters Deflation Illusion

So have you stocked up on beans or gold yet?  Have you taken Guido’s advice?

The Governor of the Bank of England now has to write an open letter to the Chancellor. This is Mervyn King’s sixth such letter in seven years.  Perhaps he will recommend stocking up on commodities.  Don’t forget we have a serious chance of a double-dip recession on the horizon.  And still we have no pro-growth policies from the government, only over-spending and over-borrowing…

Through the Looking Glass Economics

The news agenda yesterday oscillated between Phil Hammond saying that the Tories had only identified £1.5 billion of cuts and Labour seizing on Cameron’s shift of emphasis saying that there would be no swingeing spending cuts, just a start on cuts in 2010.  Mandelson claimed that the Tories would pull the rug out from under the recovery by cutting £11 billion this year when he himself said only last month that we need to cut £80 billion-a-year within 4 years.  The government is even legislating to that effect.  It is like the Mad Hatter’s Tea Party:

`Have some wine,’ the March Hare said in an encouraging tone.  Alice looked all round the table, but there was nothing on it but tea. `I don’t see any wine,’ she remarked. `There isn’t any,’ said the March Hare.  `Then it wasn’t very civil of you to offer it,’ said Alice angrily.

Meanwhile, back in fiscal reality, Britain is the most indebted nation in the industrialised world.  McKinsey released research yesterday which puts the “billion here, a billion there” political squabbling in perspective.


Have the politicians grasped the magnitude of the deep hole Britain is in? The Tories have publicly identified spending cuts equivalent to less than ¼ of a percent of GDP.  The government is overspending by some hundred times that amount.  This is “through the looking glass” economics.

Alice laughed. “There’s no use trying,” she said: “one can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”

We can’t go on like this…

Dead Cat Bouncing into Double Dip?

Yesterday’s GDP disappointment makes the case for a tax cutting Emergency Growth Budget even stronger.  Policy Makers have got to go for growth, you can’t tax your way to prosperity.  Or else the cat gets it…

Graphic : Taxloss via Alphaville

GMTV (Guido Morning TV) : Who Got It Wrong?

[…]

+ READ MORE +

+++ UK Preliminary 4Q GDP Anaemic +0.1%, -3.2% On Year +++

A rounding error rather than an end to recession…

UPDATE : Reflect that we have had £200 billion of quantitative easing and all we get is this – most of that went on giving foreign gilt investors an exit rather than bank loans to enterprises.  […]

+ READ MORE +

Two Left Feet : What is Will Straw Smoking?

It didn’t take long for Will “we don’t do attack dog” Straw of Left Foot Forward to, errm, go on the attack.  The editor of the well funded “evidence based” blog dismissed Guido’s story (“Economics for 7 Year Olds“) about the UK being the only G20 country left in recession by quoting the figures from the back pages of an out of date copy of the Economist.[…]

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Yo Dude, Where's the Deflation?

Guido was more than sceptical when politicians and Labour luvvie economists like Gavyn Davies started talking up the bogeyman of deflation at the same time as the government was running up massive fiscal deficits.  It seemed too handy a coincidence that they would print money on a scale never seen before at the same time as issuing debt on a scale never seen before. […]

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Britain Only G7 Nation Still in Recession

Below is Guido’s easy to understand summary of the third quarter GDP growth figures globally:

Global Q3 GDP

As well as being the lamest economy in the G7, we share recessionary woes with economic powerhouses like Romania.  Gordon Brown’s epitaph will be that he didn’t abolish boom and bust, he didn’t save the world and he “led the way” only in his imagination. […]

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+++ 1/5 Young Unemployed – 943,000 Under 24s on Dole +++

ONS numbers reveal that youth unemployment continues to rise, with the number of 16 to 24-year-olds up by 15,000 to 943,000, giving a rate of 19.8%, a record high. 

Gordon says youth unemployment is his priority…[…]

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With No End to Recession, Labour Attack Strategy Misfires

The coordinated attacks this week on George Osborne were pre-planned to coincide with the end of the recession as predicted by consensus economists. Except that the economy did not oblige.  On Friday the ONS reported numbers that shocked Gordon Brown, who has long clung to the belief that a rising economy will save him.  […]

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+++ Shock Figures Show UK In Worst Ever Recession +++

From Reuters:

The Office for National Statistics said British gross domestic product fell by 0.4 percent between July and September, meaning the economy has contracted for six successive quarters for the first time since records began in 1955.

This was much worse than analysts’ expectations of a 0.2 percent rise.

[…]

+ READ MORE +



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Owen Smith backs one hour contracts but wants to abolish zero hours contracts:

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