TOADS vs BADGERS
As Kwasi was delivering his mini-budget, sterling started cantering in an encouraging way. Currency traders were celebrating a new, radical Manchester Liberal mood in the Corbynised Conservatives. Lower taxes, supply-side reforms, house-building, well-drilling, wealth-producing action. Corporation tax heading towards Irish levels and an international dash for London. Bollinger popped, Bentleys ordered.
And then something happened. The sterling surge noted in Chris Philp’s famous tweet turned to a slump. What happened? What caused it?
The animal Essex spirit of the currency traders – the cheerful, optimistic, Toad of Toad Hall spirit – met with a severe rebuke from the badgers in the bond market. Borrowing for tax cuts? How will the books balance?
Active traders, dealers and operators went up against economists and analysts – the sedentary part of the constitution. Maybe the wonks are right, maybe not. Sometimes they’ll win and sometimes they won’t. This time, they really won.
BE WARY OF EXPERTS
A friend in the investment industry answered a query from Guido about the bond market.
He said, “I do know that the chaos in the bond market is at least partially caused by pension funds having to sell bonds to meet collateral calls on interest rate swaps.”
And then two minutes later he sent another message confessing he had no idea what that meant. He added that he had sat on the pensions board of a major investment company in the past When a similar conundrum was explained to him he still didn’t understand and so declined to vote on the matter.
Such admirable frankness is very rare. Remember next time some is talking knowledgeably and authoritatively about bonds, gilts and collateral calls that they may be two questions away from not knowing what on earth they’re talking about.
TOM ‘WINKER’ WATSON GOES TO HEAVEN
Guido was surprised by the honours list which marked Tom Watson’s ascension to parliamentary heaven. This ordinary sinner had been turned back at the very gates two years ago as being a wholly unsuitable for admission on account of his support of the Carl Beech allegations.
These claimed among other things, child murder by Britain’s most staid and respectable retiree.
What’s different now?
Hindsight is famously unreliable in politics but some things must still be true. Tom went through a bruising battle against the Labour Left all through the Corbyn years. He was a rallying point for the right and was elected deputy leader to counter-balance Corbyn. It’s clear he can be of service to Keir’s clear-out project – and it’s also true Watson is a formidable operator in the Labour machine. But the question – the possibly unanswerable question is: what made the Appointments Committee change their attitude?
All information and insights welcome.
SUPREME LEADERS, COMMON WOES
Putin is a great aid to Liz Truss – she blames him for the price of gas, interest rate hikes and the cause of many of her woes. Then again, it was by following his example that her woes have multiplied beyond endurance.
She launched a special operation to reconquer the ancestral homelands of her party.
She calculated she would be welcomed as a liberator and that she would restore the ancient values. The resistance has been overwhelming.
She found her troops were ill-equipped, their weapons old-fashioned, poorly maintained and liable to blow up in their faces. She was attacked from all sides and driven back from the positions she had initially held. Now she is surrendering men, material, authority and is in danger of abandoning the whole project.
There is one option left to them both. But it’s unthinkable.