Thursday, July 2, 2009

Lies, Lies and Damned Statistics

Public Expenditure AnalysesThe sheer madness of Gordon’s state of denial became clear yesterday.  He stood there at PMQs and claimed spending would grow 0%.  He has set himself a dividing line alright, it is the line between economic reality and economic fantasy.  He is on the wrong side of that dividing line.

Andrew Grice reports that the rest of the Cabinet, including the Chancellor, wants him to take a reality check.  They have agreed to admit there will be some cuts out of necessity, but to argue that the Tories will cut more, this was the position that Mandelson argued for originally.  At PMQs Cameron and Clegg were united against Brown – the LibDem leader accused him of “living in complete denial”.  It appears the Cabinet agrees.  It remains to be seen whether or not they can get the Prime Mentalist to change his “no cuts” tune.

If you wade through the numbers in the Treasury’s recently released Public Expenditure Statistical Analyses 2009 (page 83), you can see the Tories are right about the government’s own plans to cut spending on services in real terms in 15 out of 25 departments in 2011.  Gordon’s lying has lost him the argument about cuts, the reality is it that it is a question about the degree and timing of cuts.

Tuesday, June 30, 2009

Economy Contracting Worst Since 1958

The UK economy contracted an horrific 2.4% in the first quarter of 2009, its biggest quarterly decline in 51 years, according to the latest ONS data released today. This comes on top of the OECD saying we can expect a severe recession to come. Didn’t brown and Darling tell us last year that the economy would be on the up by this July?  Still a day to go…

Thursday, June 25, 2009

Mervyn on the Economic Shambles

Mervyn King’s testimony yesterday was shocking, he made public that the Bank of England was not consulted on Alistair Darling’s plans for the reform of banking regulation.  Call Guido old fashioned, but he somehow thinks that it might be a tad useful if the former student Trotskyite turned Chancellor, Alastair Darling, consulted the professor of economics turned career central banker, Mervyn King.  This is not mere student politics, this is the trillion dollar question of the moment.  Mervyn confirmed that the current tri-partite regulatory regime designed by Balls and Brown “was a mess”.

As if that wasn’t bad enough figures released yesterday showed that Britain has the biggest budget deficit in the world.  The best placed economy to weather the global crisis (© G. Brown) had government borrowing hit £20 billion in May, which means the government is overspending by nearly £30 million an hour. Gordon is spending way beyond our means and putting our children into debt at an unheard of rate.  He actually boasts that he is going to spend, spend, spend…

Mervyn basically testified yesterday that the government needed to cut spending much more dramatically than it is planning to do or else we will be ruined.  If Gordon is hoping for a recovery (as Alastair officially predicts) to save him in time for a general election the news from the OECD will not be encouraging.  The OECD said yesterday that Britain is in “severe recession” and that it was downgrading it’s expectations for the UK economy, predicting it will shrink by 4.3% this year…

Thursday, April 23, 2009

Bailout : Gordon’s £1.4 Trillion Fail

giltsHere is the futures price chart for the generic Gilt.  All that is stopping that chart going further south faster is that the Bank of England is printing money (though printing isn’t the way it done nowadays, the Bank just changes amounts in the electronic ledger).  Some of that money is recycled into mopping up gilts.  It won’t work for ever.

Gordon has convinced fellow members of the IMF to sell the fund’s gold reserves, this visibly holds down the gold price as the relative value of paper money is destroyed.   There will be an awful day of reckoning.

The gilt market will revolt sooner or later.   Darling’s fantasy forecasts will be rejected by those of us in the reality-based financial markets.   The numbers are horrific.  Bloomberg’s Andrew MacAskill has totted up the cost of the bailout as £1.4 trillion.  That is over 100% of GDP.

Thursday, April 2, 2009

+++ Gordon Wants IMF to Sell Gold Stocks +++

That has worked so well for Britain.  Not.

UPDATE : Guido didn’t see C4 News but a co-conspirator over on HPC reports Mandelson on the subject of IMF bailouts as telling Jon Snow

PM : We won’t be at the top of the queue”

JS : “You didn’t say we won’t be in the queue”

PM : “I don’t think we will be in the queue”

Honestly he didn’t want to say that last bit. He was more or less forced to. Very sheepish and quiet whan he said it. All this after Mandelson spent a good minute talking about how the stigma of going to the IMF was being reduced and it wouldn’t be embarrassing to go to them now. He even used examples of other countries, Mexico, that were considering using the special drawdown facility. We are being primed. Pure and simple. Just as we were for low interest rates and QE.

Apparently Mandelson said “We are destigmatising going to the IMF”Anyone got the video?

Wednesday, March 25, 2009

Queen and King

Queen & King A governor of the Bank of England has never had an audience with the Queen before.  King had just told a stunned Westminster that there is no more money for another fiscal splurge.  Perhaps Her Majesty is worried that the currency adorned by her face is being recklessly devalued.  If she next calls in the generals for an audience our unelected, unmandated Prime Minister should really get worried…

Thursday, March 5, 2009

Gordon’s "Favourite Banker" Has £14 Million+ RBS Pension

Derek Wanless – Gordon Brown’s most trusted banker – who chaired Northern Rock’s audit and risk committees, also has a multi-million pound pension paid for by the taxpayer. Vince Cable railed at the “collapse of Northern Rock; a product of greed and reckless gambling by overpaid executives”.

It was Wanless who failed in his responsibility to rein in that reckless gambling.

The government’s holding company, UK Financial Investments Ltd, is the majority shareholder in both RBS and Northern Rock. Based on the pensions data below, the taxpaying public as shareholders are funding a £14 million plus pension for Wanless. Does Brown think his friend Derek Wanless should be so rewarded given his catastrophic failure in his responsibility to exercise oversight of the risk?

Graphic credit : Paul Waugh

*Based on standard 20 x multiple.

Wednesday, March 4, 2009

Say that Again, Where Did the Problem Start?

Gordon was like a puppy on heat in the Oval office, clearly relieved that Obama managed to squeeze in his photo-op in between lunch and seeing the Boy Scouts of America. Here is what Gordon told the squashed in Lobby
“This is a global problem. It needs global solutions. There is a global banking collapse that we are dealing with. If we could have the same standards and the same rules that we are about to apply in the USA and in Britain to apply to other countries around the world, the same standards of disclosure and accountability and remuneration, I think the confidence in the banking system will be restored.”

For some reason he didn’t say the phrase about the problem “which started in America”. He did however ignore the questioner* who asked him would he apologise.

*Guido is sometimes harsh on Nick Robinson, but that was a blinder, Gordon looked winded as if punched in the solar plexus. We can but dream….

Thursday, February 12, 2009

Canada "Best Placed to Weather the Global Financial Turbulence"

Canada, alone in the industrialised world, has not faced a single bank failure, has no need for a bailout or government intervention in the financial markets. According to the World Economic Forum, Canada’s banking sector is best placed to weather the global financial turbulence (which apparently began in America).

Gordon Brown’s Britain is ranked 44th.

Friday, January 23, 2009

What are the Chances of the IMF Bailing Out Britain?

Brown says Cameron is “ridiculous” to talk about the possibility of the International Monetary Fund being called in to bail-out Britain. Brown reckons that is impossible.

The money markets though say different, clearly they think it is a possibility. How probable is a bail-out? Guido listened on Wednesday to Gerard Lyons, Chief Economist at Standard Chartered, Geoffrey Wood, an economist at Cass Business School and Paul Ormerod, author of Why Most Things Fail: Evolution, Extinction and Economics talk at a Policy Exchange seminar on the Credit Crunch. They were far more sanguine about the economic prospects than Guido. Essentially they thought the recession would run its course over a year or two and we would come out of it with a huge bill in terms of the national debt. The consensus was that Britain probably wouldn’t be humiliated at the IMF again, but it wasn’t impossible. Some joked that if we were going to have to go to the IMF we should get to the front of the queue.

Given most of Britain’s external debt is denominated in pounds, the way to avoid going completely bust is to print more money and devalue the debt. Which is what the markets expect to happen, hence they are dumping pounds…

Economics is a dismal science, but playing www.BailoutBrown.com is a bit more fun. Enjoy throwing your money at Brown for a change…

UPDATE 26 Jan, ’09 : Paul Ormerod emails to correct the impression that he isn’t pessimistic:
I am a great fan of your site. I am sorry you thought I wasn’t pessimistic enough at the Policy Exchange, I thought I was being. I did, for example talk about a 6 per cent switch in GDP purely through consumer attitudes, and on top of this is the impact of tight credit on the corporate sector. So I think things are pretty grim.


Seen Elsewhere

Ed Balls’ Speech Was Pointless | Dan Hodges
Media Movements: James Lyons to Sunday Times | Media Guido
Rebekah Brooks in Line for £7 Million Payout | Times
A Different Sort of Class War | Telegraph
Labour Candidate’s Links to Ex-BNP Member | Breitbart
McVey Dodges White Dee Debate | Speccie
Labour Candidate: Churchill Was a White Supremacist | Mail
LibDems Stand By Disgraced Sex Offender-Linked Mayor | MK
Has Carol Mills Given Up on Westminster? | Canberra Times
Labour Consider Banning Uber | Asa Bennett
Did LibDems Make Up Hancock Disciplinary Meeting? | Scrapbook


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Eddie Izzard, in his thirteenth year involved in politics, says he’s not cursed because it took Sir Alex Ferguson “seven years to win the premiership so it doesn’t really matter.”



cynic says:

Can anyone help me? I went on holiday a week ago and returned to find someone has pulled out the stake and Gordon Brown is back and acting as Prime Minister. What did I miss? Has there been a snap election?


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