Thursday, 30 April 2009

Biggest pay fall on record for workers

"The average weekly wage in the UK fell by almost 6 per cent in February, official figures revealed yesterday, as the financial crisis continued to wreak havoc on the wider economy."

It's all over for our Prime Minister

"You know it is over when they laugh like that. Most of the noise in the Chamber of the House of Commons is uncouth and childish; it is also often manufactured, designed to harass and demoralise the other side. But when Gordon Brown headed for the exit after Prime Minister's Questions, and had to turn round, realising that he was supposed to making a statement about Afghanistan and Pakistan, the laughter from the opposition benches – and from some on the Government side – was genuine. It was because it was genuine that it was so cruel."

Tuesday, 28 April 2009

Blood, Toil, Tears and Sweat Now

Frank Field MP
"The potential threat facing the country is as great as the actual one was in 1940. The country needs to be roused to the challenge that faces it. ....It is vital that politicians and the media move on from the bread and circus agenda of MPs' expenses and get real. The big issue confronting the country is whether it can raise huge, unprecedented shedloads of debt. .....Even on the Government's own figures, Britain will proportionally be trying to borrow more money to balance its accounts over the medium to long term than any other G8 country.
...The markets are already showing some nervousness as the Government sets out to raise a record £220bn of loans this year. It costs more, for example, to insure against the Government defaulting on its gilts than it does, say, to insure against Cadbury's being unable to redeem its company debt.
If the Government has difficulty in finding the necessary borrowers there could be a swift collapse in our currency bringing economic chaos in its wake. If this scenario is allowed to develop the Government will be forced to slash and burn public expenditure projects."

Monday, 27 April 2009

Tories extend lead over Labour

Yahoo News
"The Conservatives have extended their lead over Labour to 19 points in the aftermath of last week's Budget, according to a new poll. ....The findings, the latest of a series of polls placing the Conservative lead in the late teens, suggest David Cameron could become prime minister with a Commons majority of 186."

Bargaining fails to break deadlock over IMF

The Times
"Despite intense bargaining throughout the weekend, ministers gathered in Washington failed to agree on how to raise the full $500 billion (£340 billion) in extra funding for the International Monetary Fund pledged by the G20 three weeks ago."

Barack Obama's audacity of hype crumbles

"On monetary policy, Obama has remained a bystander to the efforts of Ben Bernanke at the Federal Reserve. Having reached close to zero interest rates in December, Bernanke announced the Fed would print money in an attempt to bring down real interest rates. Then he travelled to the London School of Economics to tell the world to reject the classic policy of "quantitative easing": the Fed would buy private-sector debts, not government bonds. Finally, on March 18, after a fractious argument within the Fed, he relented, adopting the classic form of the tactic on a massive scale."

Saturday, 25 April 2009

The curse of Labour rule strikes again

Daily Mail
"Sorting out our debt burden is going to be a 20-year job, and only the Conservatives can do it. In fact, the Institute for Fiscal Studies (IFS) now forecasts it will be a 23-year task, taking until 2032 to fill the black hole reported in Darling's Budget.
Until then, Britain will have to accept lower spending, higher unemployment and higher taxation. This will be the generation of austerity. Most of us might be sceptical about such forecasts, but the IFS prediction is a more reasonable one than most.
After the 1929 Wall Street Crash, it took until the early Fifties for the American stock market to regain its 1929 levels. It may well take that long before the impact of this crash leaves the system."

Friday, 24 April 2009

UK economy shrinks at fastest rate for 30 years

The Times
"The dramatic fall in GDP, the total value of all goods and services produced by a country, is far higher than the 1.6 per cent contraction predicted by Alistair Darling in the Budget. ....., the International Monetary Fund said that it expected the UK economy to shrink by 4.1 per cent this year and for the slowdown to continue into 2010, when GDP will contract by 0.4 per cent. ....Colin Ellis, chief UK and European economist for Daiwa, said: "Today's data are undoubtedly bad, and could serve as a rude awakening to anyone who had started dreaming of an eventual recovery (stand up, Mr Brown)."

Cameron gets a Budget bounce as voters flock to the Conservatives

Daily Mail
"The 18-point lead - dubbed a Budget bounce - is the biggest for the Tories in the YouGov and Daily Telegraph newspaper survey since last September."
This bogus and dishonest mix was not a Budget for Britain but a desperate bid to cling to power

Wednesday, 22 April 2009

Britain’s Defict Swells as the Economic Gloom Deepens

New York Times
“The slow pace of the improvements of borrowing is extremely disappointing and worrying,” said Philip Shaw, an economist at Investec in London. “The government is obviously reluctant to do the dirty work ahead of the election. A few measures to hit high income earners won’t do it.”
British Plan to Raise Taxes and Debt Sets Off Political Sparring
"....some have warned that if the recession is longer and deeper than the Brown government is predicting, the level of debt could lead to Britain’s facing a run on the pound and the possibility of having to turn to the monetary fund for emergency loans, a contingency last resorted to by a Labor government in the 1970s."

Budget reaction: chorus of disappointment

The Times
"In perhaps the most excoriating response, made the moment the Chancellor sat down, David Cameron said that his speech had revealed the “utter mess” that Labour and Gordon Brown had made of the economy. ....“As of today, any claim they have ever made to economic competence is dead, over, finished.”
BUDGET 2009: Cameron lambasts Labour's 'decade of debt' in withering attack on Darling (Daily Mail)

BUDGET 2009: Darling puts Britain into debt for a decade

Daily Mail
"In a humiliating 50-minute speech, the Chancellor was forced to admit his previous predictions about the extent of Britain's economic woes were a gross miscalculation."

IMF contradicts Alistair Darling's growth forecasts in Budget 2009

"Britain will this year suffer its worst recession in more than 60 years, the world's leading economic watchdog has warned, as the global economy sees its first year of negative growth since the end of World War Two."

Pound hit as debt burden to soar

"The pound has fallen against the dollar and the euro after Chancellor Alistair Darling forecast a massive increase in UK public debt.In his Budget speech, Mr Darling said that debt would increase to 68% of the UK's economic output next year."

Budget 2009: A savage and pointless attack on Middle England

"Labour is not interested in improving the country it purports to govern. It is interested only in retaining power."

The lesson from Budget 2009 is that our politicians are blind to Britain's financial risks

"What a fiasco! I’ve hurled some pretty lurid abuse at this government’s economic stewardship in recent years – and long issued dire warnings about the dangers of Gordon Brown’s reckless spending."

Tuesday, 21 April 2009

IMF says UK facing bailout bill of £200bn

"The report delivers a fresh blow to Chancellor Alistair Darling on the eve of tomorrow's Budget, which will unveil soaring public debt and the worst year for the economy since the end of the Second World War.UK banks would also face a $200 billion (£137 billion) hit over the next two years as bad debts soared, the IMF said."
IMF puts losses from financial crisis at $4.1 trillion

Monday, 20 April 2009

Just sketch out the route ahead, Mr Darling, that will be scary enough

"It is only five months since poor Alistair Darling had to stand at the despatch box and announce those dreadful borrowing figures in his Pre-Budget Report (PBR). He must now announce numbers which would surely have been beyond his imagination then – and still we won't be sure that this is the worst of it."

Tories winning battle for economic credibility, poll suggests

The Guardian
"Ahead of the most crucial budget in decades, the poll gives the Tory team a 10-point lead over Labour as the party best placed to manage the economy ­– a sharp reversal of fortunes over the past year."

Alistair Darling's Budget to demand £15bn cut in public spending

The Times
"Alistair Darling will demand £15 billion in Whitehall efficiency cuts this week after repeated warnings that public sector spending is out of control."
Comment: It's only taken a banking crisis for Labour to realize that ??

Taxpayer to pick up £60bn bank bail-out bill as Darling admits it will take a decade to balance the books

Daily Mail
"Alistair Darling is set to admit the taxpayer will not recover the full cost of the banking bail-out and that it will take almost 10 years to get the public finances back into shape, it emerged today.The Chancellor, in Wednesday's critical Budget statement, will concede the Government will not claw back all the money it pumped into the financial sector, which could spiral as high as £60billion."

Sunday, 19 April 2009

Bank's budget battles are only just beginning

Daily Mail
"But the backdrop has changed radically since then. Faced with the deepest recession in at least three decades, the Bank is engaged in an operation grandly titled 'quantitative easing' - and better described (despite the winces of its officials) as printing money.Fresh cash is being minted to buy government bonds, sustaining demand for Treasury paper and making it much easier to hold down the cost of public borrowing.
Do not underestimate the size of this operation. The Bank has offered an initial forecast that it could print up to £150billion - equal to 10 per cent of national output and approaching the scale of the government's entire expected borrowing requirement for this fiscal year.Given the Bank is now in the unparalleled position of helping prop up the Treasury's finances, King has clearly decided he has earned the right to comment on its debt plans. After all, he is indirectly turning into one of the government's biggest lenders.The Treasury's deficit is only likely to get worse in the coming years. It will be a huge battle to maintain the market's confidence."

Labour's Watergate leaves trust and dignity in the gutter

"Whatever headline-grabbing stunts Mr Darling artfully mingles in his Budget with statesmanlike strategies for medium-term economic recovery, he will address them to a nation that holds his Government in contempt. ....But the key similarity is beyond dispute: a partisan smear campaign was being planned in the inner sanctum of the Brown regime, using the tools and resources of government. ....The McBride emails were the draft notes for a campaign to use the covert strategic might of the state to destroy the most senior Tories, spread rumours about their health, and – crossing a line that very, very few politicians ever cross – attacking their families."

Thursday, 16 April 2009

Public spending set to reach 50% of national income as Darling plans years of tax hikes

Daily Mail
"Alistair Darling will admit in the Budget that public spending will jump to nearly 50 per cent of national income in the next financial year - the highest figure since 1982.
The Chancellor is also expected to reveal annual public borrowing will hit almost £175billion in the next two years. At a rate of 12 per cent of national income in the next financial year, that would create the worst deficit since World War Two.

IMF warns over parallels to Great Depression

"This recession is likely to be "unusually long and severe, and the recovery sluggish," said the Fund, releasing two advance chapters from its World Economic Outlook. However, it warned there is a risk that it could spiral down into a full-blown slump unless further action is taken to stop "feedback effects" gathering force."

Wednesday, 15 April 2009

US economy goes back to 1955 as deflation returns

The Guardian
"The notion that inflation will pick up in the near-term is completely out of the picture," said Peter Kenny at Knight Equity Markets in New Jersey. "Now we're looking at numbers that speak to recession without the prospect of inflation."

House prices down 12% on last year as values plummet at record pace

Daily Mail
"House prices were 12.3 per cent down on last year in February as the annual pace of decline set a new record, according to new figures."

Tuesday, 14 April 2009

Darkness at the Heart of the Labour Party

Frank Field MP
"Far from helping sketch out a new roadmap, the McBride activities shine a searchlight on the paucity of the government's programme.Week after week MPs have been turning up but with almost no serious work to do. There is the odd bill to be sure. But there is no legislative programme to speak of. Even the debates that are put on to fill in time are ones that deny MPs a vote. The whole exercise is vacuous. .....McBride sat on the Prime Minister's political War Cabinet. If this is the war the Prime Minister thinks the country wants he is in for a very rude awakening.
Comment: Frank Field MP is one of the most highly respected (from all sides) Labour members of parliament.

Gordon Brown has been caught conjuring non-existent trillions out of thin air

"Now that the G20 meeting has failed to produce the additional stimulus spending that he and Barack Obama had been hoping for, and that once again Gordon Brown has been caught conjuring non-existent trillions out of thin air, he must shift his election drive back to the domestic economy, hoping that a recovery takes hold soon enough to generate the feel-good factor that might propel Labour to victory."

Monday, 13 April 2009

Do Obama and Brown need each other?

It is a fact that President Obama is saddled with a train wreck of an
American economy:That George W Bush,as president,was a disaster
for the American people, and that now we can see the similarities
between the Blair/Brown government and that of the departed
Republican President's administration.The lack of banking regulation
on both sides of the Atlantic and the catastrophic failure of the banks
in the US and the UK provides evidence enough. Brown always
blames the US for the UK banks failing,and President Obama just
ignores this patent lie.Both Brown and Obama favoured
piling up the debt to fix a problem created by debt. Both
can point to each other as a method of support,and hope that
this is indeed the solution.But unfortunately,the chances
are that it is not the solution,but a very expensive mistake for the
citizens of both countries,who must pick up the bill for it all.There
is a small difference,President Obama was not even a junior Senator
when the Democrats - yes the Democrats-precipitated the US financial chaos,while Gordon Brown was the chief architect of the UK's financial disaster.

Credit crunch pushes Poles out of jobs and into UK benefits system

Daily Mail
"The annual total of benefit claims from A8 citizens was 13,600 last year, up from just 6,287 in 2006. More than half came from Poles, who represent a large majority of the eastern European migrants, followed by Lithuanians accounting for 13 per cent and Czechs with 11 per cent.The figures are a blow for Labour ministers who faced fierce criticism over the decision to allow unfettered access to Britain's labour market when the EU expanded eastwards five years ago - when other states such as France and Germany chose to keep migrant workers out.Ministers have clung to their claims that the huge influx of around a million eastern European workers has been good for the British economy, and the immigrants are not a burden on UK taxpayers."

Saturday, 11 April 2009

Revealed: e-mails that toppled key Brown aide

The Times
"The e-mails, seen by The Sunday Times, expose how Gordon Brown’s head of strategy and planning wrote to a Labour spin doctor proposing a campaign of unfounded personal slurs against senior Tories. The smears, many of a sexual nature, were planned as part of a strategy to “destabilise” the opposition in the run-up to the general election."
"The contents of the e-mails, which fell into the hands of Paul Staines, a political blogger, shatter Labour claims yesterday that McBride and Draper were “knocking around ideas” that were merely “juvenile and inappropriate”. At least one of the e-mails was copied to other Labour activists, including Charlie Whelan, who used to work as Brown’s spin doctor."
Comment: With the economy in dire straits, you might think Gordon Brown would get his staff busy with that....

Thursday, 9 April 2009

The MPC runs the printing presses

" The hapless MPC members are still drawing their huge salaries, and not a whiff of an apology for failing to hit their inflation targets for months, nor a hint that they recognise they contributed to the crash through their boom-bust monetary policy.
Now they are firmly back in boom boom mode. This time they have not only pressed the interest rate accelerator flat to the floor, wrecking returns for savers in the process, but they have put a couple of turbo chargers on the vehicle in the form of quantitative easing." (John Redwood)

Bank of England leaves rates on hold and pledges to boost money supply

Daily Mail
"The central bank instead kept the focus on its so-called quantitative easing program, under which it effectively creates new money by buying assets such as government securities and corporate bonds, and paying for them by crediting banks' reserve accounts.
....The current program is the first time that modern Britain has resorted to the measure, after the series of interest rate cuts left interest rates at a near floor and all-time low in the bank's 315-year history."
Comment: "quantitative easing" is devaluation in all but name.

Wednesday, 8 April 2009

special drawing rights to replace the dollar as the international reserve currency ?

"Under what was approved by the world leaders, the IMF is suddenly behaving like a global central bank, issuing SDRs to control liquidity worldwide. This is a central bank without direct accountability to the people of the world, which only seems to underline the apparent outrageousness of this plot. ....was something instigated by the US Treasury, in conjunction with the UK Government, in the weeks running up to the G20. In fact, I gather that the IMF only learnt about the plan at the very last minute, leaving their legal officials scrambling around to try to find out whether it was even possible. Only last Wednesday, barely 24 hours before the G20's decision, panicked representatives from the IMF's legal department phoned the Treasury to find out whether this plan was really likely to happen."

Tuesday, 7 April 2009

Ireland imposes emergency cuts

"Dublin has unveiled the harshest austerity measures in the history of the Irish Republic, raising taxes and slashing expenditure in an emergency budget despite mounting evidence that the country is already tipping into debt deflation. ....The country has been simultaneously hit by two "asymmetric shocks": the global banking crisis has punished Dublin's "Canary Dwarf" financial industry, worth nearly 10pc of GDP; and since half its exports go to Britain and the US – the highest of any eurozone state – it has suffered the full brunt of sterling's crash and the overvalued euro."

No G20 bounce for Gordon Brown or for Labour

The Times
"The survey, undertaken between Friday and yesterday, shows the majority of people believe that most MPs are abusing the system. The findings reveal the damage done to the public standing of Members by the recent string of stories. This has caused widespread worries at Westminster over growing cynicism about the political class.The survey also shows that there has been no G20 bounce for Gordon Brown or for Labour, despite a favour-able view of last Thursday’s summit in London. Labour is unchanged compared with a month ago on 30 per cent, while the Tories are one point up at 43 per cent. The Liberal Democrats are one point down at 18 per cent. Other parties are unchanged on 9 per cent."

UK industrial production suffers worst annual fall since 1968

"The trend is unmistakeably downwards," said Stephen Lewis, chief economist at Insinger De Beaufort. ...."It's pretty grim out there,'' said Peter Dixon, an economist at Commerzbank in London. ``The authorities have thrown the kitchen sink at this problem. Now it's time to wait for it to have an impact.''

Monday, 6 April 2009

Was it one trillion dollars? Or less than 100 billion?

Financial Times
"When all the sums are added together, rather than $1,100bn, the new commitments appear to be below $100bn and most of those were in train without the G20 summit. ....The vast majority is an “aspiration”. The G20 annexe notes that new money committed is not $250, but around $3bn-4bn."
Gordon Brown’s love of (arbitrary) big numbers (FT)

Tax rises on cards to pay for Treasury's £39bn 'black hole'

"To fund the £39bn shortfall, the Government would have to increase taxes by an extra £1,250 per family, per year, or cut spending for five years with even the much favoured areas of health and education hit hard. In the absence of fiscal tightening, net debt would stand at about 90pc of national income by the early 2050's, according to the IFS."
Families 'to face extra £1,250 tax a year each' as Darling seeks the £39bn he needs to get Britain's public finances back on track (Daily Mail)

Saturday, 4 April 2009

Hubris, hoopla and claims that were false, cynical and very, very dangerous

Daily Mail
"If these highly ambitious claims were even half-correct it would be wonderful news indeed. However, the truth is that they are false, cynical and very, very dangerous. ...The biggest falsehood concerns the belief that the G20 nations have pioneered a $5trillion spending boost to global economies. Although Gordon Brown and President Obama had originally hoped to get world leaders to agree to such a 'fiscal stimulus', they actually failed to secure a single penny of extra government spending anywhere in the world. Rather than admit defeat, however, they pretended they had won. So they invented the $5trillion figure. They arrived at the number by adding up the extra government borrowing expected to take place in G20 economies between 2008 (when the recession began) and 2010 (when world leaders hope it will end). It is a completely arbitrary figure."
The next fabrication concerns the claim that G20 leaders agreed a 'programme of support to restore credit, growth and jobs in the world economy' - worth some $1.1trillion. ...yet sadly, it too is mainly a bogus number because much of the money had already been pledged in recent months.Almost half of that $1.1trillion - some $500billion - takes the form of extra money for the International Monetary Fund to bail out countries that run into trouble during the economic downturn. Although Gordon Brown brazenly asserted that this was new money, this is simply not true. ...Next, Gordon Brown claimed that some $250billion has been raised to regenerate world trade with the help of extra finance. Once again, his claim is an invention.Indeed, the small print of the G20 communique suggests only $3-4billion of new money has been committed, and the $250billion figure is only a vague pledge.I fear that the more we look beneath the headlines of the London summit, the more its achievements look threadbare. I would estimate that no more than $250billion of the much vaunted $1.1trillion is genuinely new money.The true story is that Gordon Brown seems to have corralled fellow leaders into perpetrating a gigantic collective fraud on world public opinion."

A day on, the G20 deal loses its shine

Daily Mail
"The summit failed to tackle the dizzying $2.2trillion of toxic debts held by world banks. ....Nor did the G20 address the trade imbalance between a surplus-rich, producer-driven China and a debt-laden, consumer-driven America. While China sits on trillions of dollars of reserves, the U.S. sinks into ever greater debt. .....And Mr Brown? As Peter Oborne outlines in his column on page 31, it appears he was guilty of some double-counting and spin in Thursday's triumphal address."

Friday, 3 April 2009

G20: Tax shelter purge ends with a fudge

Daily Mail
"World leaders agreed to publish a blacklist of countries refusing to sign up to financial anti-secrecy rules but after frantic negotiations only four were included - none of them regarded as major tax shelters."

G20: A 'new world order' is simply fantasy

"The international act of posturing was pointless; because despite having caused the problem, the political class had none of the requisite skills to sort it out"
"Those who thought that Dr Goebbels came to an end on a stretch of waste ground in Berlin in 1945 have been forced to think again. The piece of theatre that concluded in London on Thursday was one of the great confidence tricks of our lifetimes."

Thursday, 2 April 2009

G-20 Pact Has New Rules and Commitments of $1.1 Trillion

New York Times
"The most concrete measures relate to support for the International Monetary Fund, which has emerged as a “first responder” in this global crisis, making emergency loans to dozens of countries.The Group of 20 pledged to triple the resources of the Fund to $750 billion — through a mix of $500 billion in loans from countries, and a one-time issuance of $250 billion in Special Drawing Rights, the synthetic currency of the Fund, which will be parceled out to all its 185 members.The countries, in turn, could lend that money to troubled neighbors. The I.M.F.’s members also agreed to lend the proceeds from sales of the fund’s gold reserves to the poorest countries."

Brown unveils historic $1trillion deal as G20 vows to rescue world economy and crack down on reckless bankers

Daily Mail
"But there were immediately claims the measures did not go far enough and had in fact mostly already been announced.Shadow chancellor George Osborne said the agreement 'does not contain a single extra dollar or a single extra pound of fiscal stimulus'. ...There was no co-ordinated global fiscal stimulus, as had been originally hoped by Mr Brown and President Barack Obama.Instead, the Prime Minister said that the boosts already announced by individual countries would amount to $5trillion by the end of next year. ...but France and Germany, who had threatened to wreck a deal if they did not get their way, seemed to have succeeded.Not only was there no new fiscal stimulus, but their demands for far tighter financial regulation and for worldwide curbs on bankers' pay and bonuses were both agreed.The cap was a key issue for the two countries, who had last night threatened to wreck the deal if their demands were not met. ...But rather than new plans for a fiscal stimulus, there was only the muted pledge for central banks to continue 'expansionary policies as long as they are needed'.Mr Brown pointed out that $5trillion will have been poured into economies around the world by 2010 but this is money already announced in the last few months.

Wednesday, 1 April 2009

G20 Summit: it's no place to put out the raging fire

"The world economy is in a relentless downward spiral but G20 finance ministers have barely noticed, judging from the communiqué of their mid-March meeting. ....There can be no Grand Bargain where the US agrees to fix its banking system because the EU agrees to aid Eastern Europe. It is in the interest of the US to fix its banking system purely on domestic grounds. Similarly, it is in the EU's own interest to staunch the bleeding in its East and avoid blowback to its financial system, US bank recapitalisation or not. Saying to the Congress "we should recapitalise our banks because the EU requires this as a quid pro quo for taking the lead in Eastern Europe" would be a nonsequiter."