Monday, 30 November 2009

The cost of China’s excess capacity

"In China’s current development model, household income is taxed, to support corporate profits. Corporations now generate more than half of China’s huge savings. Since consumption tends to grow more slowly than GDP, excess capacity can only be used up via yet more investment or exports. This year, economic crisis has made the latter impossible. But China desperately needs to expand its exports once again. The result may well be a crisis in the trading system."

Morgan Stanley warns UK risks full-blown debt crisis

The Times
"Economists from Morgan Stanley said that if next year’s elections resulted in a hung Parliament, the country could face losing its AAA debt rating as investors panicked over whether the majority party had the authority to push through the fiscal tightening needed to get the UK’s finances back on track."

The leaks that prove how worried the Treasury is

"The significance of this should not be underplayed. The Treasury, it appears, is going to the extent of leaking market-sensitive details of the forecasts in the PBR because, one presumes, it is extremely worried about the market’s reaction to the red book itself. This probably shouldn’t be surprising: we all know full well that the UK is heading into unknown territory when it comes to its fiscal position: total UK net debt is set to rocket from around 50pc of gross domestic product to close to 100pc in the next few years."

Morgan Stanley fears UK sovereign debt crisis in 2010

“In an extreme situation a fiscal crisis could lead to some domestic capital flight, severe pound weakness and a sell-off in UK government bonds. The Bank of England may feel forced to hike rates to shore up confidence in monetary policy and stabilize the currency, threatening the fragile economic recovery,” they said."

Friday, 27 November 2009

Fears stalk global markets on Dubai debt crisis

The Times
"Masayoshi Okamoto, head of dealing at Jujiya Securities in Tokyo, said: “I think we won’t know the full impact of Dubai until Monday after we see what happens in New York, where bank shares are likely to be hit pretty hard.”

Treasury 'forced' to reveal secret £62bn loan for banks

"Edward Leigh, Conservative chairman of the Public Accounts Committee, and John McFall, Labour chairman of the Treasury Select Committee, indicated that the prospect of this information being "outed" had been the primary reason why the news was finally released this week."

Dubai's ruling family moves to calm debt fears as global markets slide

"Dubai's ruling family has attempted to calm international fears over its economic stability, saying its rescue package for its most indebted state company was "carefully planned"."

Thursday, 26 November 2009

Why was I kept in the dark over £61bn loans - asks Leigh

"Edward Leigh, chair of the public accounts committee, has written an angry letter to the Chancellor demanding to know why the £61bn loans to HBOS and RBS have only just been made public."

Wednesday, 25 November 2009

Treasury rift with Bank deepens over secret loan

The Times
"Relations between the Governor of the Bank of England and the Chancellor hit a new low today after Alistair Darling faced a barrage of criticism from both sides of the Commons over the emergence of a £61.6 billion secret loan to RBS and HBOS."

As one crisis recedes, the fiscal one may be only beginning

"It is hard to recall a time when opinion on asset markets was more sharply polarised between bulls and bears. But then it is also hard to recall a time when the future course of the world economy looked so uncertain."

How the Bank of England made £62bn 'disappear'

"In order to hide the emergency loan, all it had to do was, when printing the details of its balance sheet, to plop the loans in the same category as these currency swaps. Voila, no-one could be sure that all that fizzing in the Bank’s accounts wasn’t just due to those volatile currency swaps."

Tuesday, 24 November 2009

Bank of England propped up RBS, HBOS with £61.6bn in emergency loans at height of crisis

"Royal Bank of Scotland and HBOS received £61.6bn in emergency loans last October, the Bank of England said as it revealed for the first time the scale of crisis that brought Britain's financial system close to collapse."
Bank gave RBS and HBOS 'secret' £62bn loan (The Times)
"Royal Bank of Scotland (RBS) and HBOS were secretly kept afloat with £62 billion of emergency Government support at the height of the credit crisis last year, it was revealed today.The Bank of England kept the massive liquidity injections secret until today, when it judged calm had been restored and there was no longer any need for secrecy."
Bank of England gave RBS and HBOS £61.6bn in 'secret' loans at height of credit crisis (Daily Mail)
"The Bank revealed for the first time the details of its Emergency Liquidity Assistance (ELA) to both banks in a submission to the Treasury Select Committee."

Monday, 23 November 2009

Warning on borrowing, with third of Britons in fear of debt

"Britain's debt levels have been a source of concern for finance professionals and regulators. While most of the banks now say the increase in bad debts levels is slowing and some, such as Lloyds Banking Group, say they have peaked, experts argue that only historically low interest rates have prevented tens of thousands of people from defaulting on mortgage payments."

UK economy is the 'sick man' as rivals recover

The Times
"The leading industrialised economies emerged from recession between July and September, but Britain remained the "sick man", staying in an economic slump, figures from the Organisation for Economic Co-operation and Development (OECD) showed today."

Britain has run out of money, the CBI is told

"....the Prime Minister stuck to already announced plans for halving the deficit over four years. He promises to keep fiscal support measures in place for as long as it takes to produce a sustained recovery in private demand.Yet in placing so much of his hope for future growth on infrastructure spending, he seems to have plain forgotten that his fiscal consolidation plans involve some of the biggest cuts to capital spending by the public sector ever seen. The rhetoric on creating a business friendly Britain wide open and attractive to inward investment says one thing, but the practice of higher taxes and more regulation the complete opposite."

Sunday, 22 November 2009

Greece tests the limit of sovereign debt as it grinds towards slump

"The newly-elected Hellenic Socialists (PASOK) of George Papandreou confess that the budget deficit will be more than 12pc of GDP this year, four times the original claim of the last lot. After campaigning on extra spending, it will have to do the exact opposite. "We need to save the country from bankruptcy," he said."

Saturday, 21 November 2009

Deflation hits Japan ... again

"The monthly report from Tokyo's Ministry of Finance is blunt in its assessment. "Recent price developments show that the Japanese economy is in a mild deflationary phase," it says starkly, before calling on the Bank of Japan to implement "appropriate and flexible monetary policy" to help fix the problem. ....In Japan, it is already happening. As Tokyo admitted yesterday, deflation has haunted the country since the spring and is now worsening faster even than in the years after the bursting of the 1989 asset bubble. Core CPI – which excludes fresh food – was running at minus 0.1 per cent in March. By June it was minus 1.7 per cent. Now it is between minus 2.2 and minus 2.4 per cent. But CPI is not all there is, and real deflation is typically taken to include falls in the nominal value of all kinds of assets, not just consumer prices."

An inflationary spike is not just hot air - it's a very real threat

"n October, UK inflation rose sharply - with the Consumer Price Index up 1.5pc annually, compared with 1.1pc the month before. Most prominent British economists say this is a "blip" and that "deflation" remains the most serious danger. I'm afraid such economists are wrong."

Government deficit now increasing at £3bn a week

"The government borrowed some £11.4 billion in October, bringing the total borrowed so far this year to £86.9 billion - the highest running total in history - according to the Office for National Statistics."

Thursday, 19 November 2009

UK borrowing spirals as tax receipts dwindle

"October's shortfall reached £11.4bn compared with £130m at the same time last year. City economists had pencilled in a deficit of £7.1bn.Although October is traditionally a strong month for revenues such as corporation tax, Britain's deepest recession since the 1930s has hit the tax take hard and spurred spending on unemployment benefits. Overall tax receipts fell 9.1pc in the month as spending gained 10.3pc."

Its the deficit, stupid

John Redwood
"The deficit is estimated to be running at between 12% and 14% of national Income. It is, as David Cameron reminded us, double the level of deficit relative to the size of the economy that the UK struggled with at the time of the IMF loans in the 1970s. It is massive, growing too rapidly, and out of control. Today’s figure for October confirms that the Treasury was not for once overestimating it when they forecast £175billion of borrowing for the year. Some forecasters now think it will be £200 billion. This surge in borrowing is an interesting backdrop to the decision to print another £25 billion."

Britain's borrowing hits record £11.4 billion

The Times
"The threadbare public finances were thrown back into the spotlight today as it was revealed the Government was forced to borrow £11.4 billion in October to meet its bills - the worst figure for the month since records began in 1946.Tax receipts collapsed by £4.1 billion compared with October 2008 while spending was £4.5 billion greater as the recession took its toll on corporate profits and consumer spending while welfare payments surged.Total public sector net debt grew to £829.7 billion, equivalent to 59.2 per cent of total national output, by the end of October. That compares to £695.1 billion and 48.6 per cent a year earlier."

Tuesday, 17 November 2009

Yo dude - where's the Deflation ?

Guido Fawkes
"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. They subsequently, coincidentally, bought the debt using the money they had just printed."

Inflation leaps- before the VAT increases hits us..

John Redwood
"The inflation increase was the largest since August 1990, when our economy was being distorted by following the German currency. RPIX (Retail Price Index without housing) stormed above the growth of the CPI (Consumer Price Index, Mr Brown’s preferred measure), hitting an annual increase of 1.9% compared to 1.3% a month earlier. ..."

QE has not yet improved lending

"He also admitted the Bank's £200bn programme of quantitative easing (QE), which injects money and spending power directly in the economy, had not yet had the desired effect, despite some £175bn already having been spent by the Bank in buying gilts and corporate bonds."

Core deflation in the US continues to gather pace

"Mr Fisher said the “peak impact” of the Obama fiscal blitz has already come and gone. “Several recent sources of strength are likely to wane as we head into next year. Cash-for-clunkers and the first-time-homebuyer tax credit have both shifted demand forward, increasing sales today at the expense of sales tomorrow. Neither of these programmes can be repeated with any real hope of achieving anywhere near the same effect. The more demand you steal from the future, the less future demand there is for you to steal,” he said."

Monday, 16 November 2009

Inflationary armageddon? Not yet, but come 2011 it's another story

"In many ways, the real test for the inflation numbers won't come next year but rather in 2011. By that stage, barring another major commodity price move, the effects of that roller-coaster will have fallen out of the annual inflation numbers, along with the effects of higher VAT rates. Moreover, the inflationary effects of a lower pound should have faded away too."

Sunday, 15 November 2009

China has now become the biggest risk to the world economy

"Far from taking over as the engine of growth from an exhausted West, China is making matters worse. Its "beggar-thy-neighbour" policies continue to play havoc with global trade and risk tipping the world into a second leg of the Great Recession."

Saturday, 14 November 2009

Dollar carry trade could herald the next global crisis, analysts warn

The Times
"The warning was issued at the Apec summit of Asia Pacific leaders in Singapore and came after a variety of assets started to display bubble-like patterns of inflation: everything from gold and copper to fine wine and Hong Kong penthouses."

Currency devaluation is no magic bullet

"Mervyn King, the Governor of the Bank of England, was at it again this week. The fall in the exchange rate over the past two years, he said, will help smooth what he characterised as a necessary rebalancing of the economy, away from consumption and towards exports.His remarks were reminiscent of past currency crashes under Labour. Remember Harold Wilson? "It does not mean," he said, when he announced a 14 per cent devaluation, "that the pound here in Britain, in your pocket or purse or in your bank, has been devalued. What it does mean is that we shall now be able to sell more goods abroad on a competitive basis." Nobody was fooled then, and it would be unwise to rely on that idea this time, either."

Friday, 13 November 2009

Simple truths about the economy

"The truth is sometimes simple, however elaborate the detail. The main feature of the world economy over the past few years has been the growing savings surplus of China and other Asian countries. Until recently it was offset by consumer borrowing in the west, especially in the US and the UK. .....The best place to begin is the International Monetary Fund’s current World Economic Outlook . One table shows savings rates in “emerging developing economies” rising far faster than domestic investment. The difference, known as “net lending”, rose from negative numbers at the end of the 20th century to a peak of 5.2 per cent of gross domestic product in 2006. The figure of 5.2 per cent of GDP may not seem much, but the countries concerned are estimated to account for nearly 45 per cent of world output or more than $30,000bn a year."

Britain lags as eurozone climbs out of recession

"From a UK perspective today's figures do not make pleasant reading," said Charles Davis, senior economist at the Centre for Economics and Business Research. Richard McGuire, senior fixed income strategist at RBC Capital markets said the Eurostat data "further underlined the UK's isolation, itself a reflection of the more structural nature of the latter's downturn."

Thursday, 12 November 2009

Britain's recovery is only just starting, warns bank boss Mervyn King

Daily Mail
"Governor Mervyn King said the recovery was under way, and signalled that interest rates will remain low at least another year, in a boost to mortgage payers.But he warned the country has 'only just started along the road' towards getting the economy back to business as usual, in the wake of the worst financial crisis in modern history."

Britain will take two more years to regain strength

"In its quarterly Inflation Report, the Bank produced new research showing that annual UK economic output was unlikely to return to the £1.4 trillion level it peaked at in early 2008 for two more years. The warning, which underlines Governor Mervyn King's repeated warnings that the UK faces an arduous struggle as it attempts to rebuild and rebalance its economy, came as the Bank signalled that recovery is nevertheless in store, and that interest rates may rise, or quantitative easing (QE) be withdrawn, in the coming months."

Wednesday, 11 November 2009

Overhaul the EU budget

"Fraud and mismanagement have long been endemic in the EU. Its taxpayers are concerned less about which nondescript politician will take on this or that role, than about whether any of them will get to grips with the colossal waste of their money. This extends beyond the familiar stories of phantom tobacco plantations and inefficient French farmers."

Obama has lost his way on jobs

"The past week brought news of US double-digit unemployment and the Federal Reserve’s decision to maintain near-zero interest rates. Both pieces of news expose the inadequacy of US economic policymaking. The Obama administration’s stimulus policies are not well-targeted. The Republican alternatives are even worse. Both sides are missing the key fact: the US economy needs structural change that requires a new set of economic tools."

Tuesday, 10 November 2009

Outlook for jobs will remain grim ‘for several years’

The Times
"Gerwyn Davies, public policy adviser at the CIPD, said: “The UK jobs market remains flat on its back. Things aren’t anywhere near as bad as they were earlier in the year, when redundancies spread through the economy like a virus — [however] the patient remains seriously weak and won’t recover for several years, even if a return to robust economic growth provides the necessary tonic, and could easily relapse if the recovery is as fragile and anaemic as many economists fear.”

UK most exposed to losing AAA credit rating

The Times
"The UK Government is most at risk of losing its AAA sovereign debt rating among the top-rated nations because of its huge budget deficit, Fitch, the ratings agency, warned today.However, the country does not face the imminent threat of a downgrade, because whichever party is voted in at the next general election is then expected to announce radical measures to cut debts, Fitch added.David Riley, the head of global sovereign ratings at Fitch, said that he has a “stable” outlook for gilts to reflect “our expectation that the UK Government will articulate a stronger fiscal consolidation programme next year”.

European Commission asks UK to deliver £25bn a year in spending cuts

"The European Commission will propose tomorrow that the UK's budget deficit be brought down from a prospective 12 per cent of GDP to just 3 per cent by 2014-15, requiring tax increases and public spending cuts as yet unimagined by the main political parties. It would mean about £25bn in spending cuts and tax rises every year."

Barack Obama pledges to tackle Beijing on yuan

"Concerns are that Beijing artificially hold backs the value of the yuan to cheapen the cost of its exports, therefore making Western goods more expensive.But Mr Obama will have to tread carefully as the Chinese government owns almost $800bn (£477bn) of US Treasuries, its largest foreign creditor.Earlier in the day, the Chinese premier, Wen Jiabao, urged the US to "effectively discharge its responsibilities" and "maintain an appropriate size" to its budget deficit."

Monday, 9 November 2009

Obama has lost sight of the centre

"But the Democrats should be worried about what voters think of them right now. The lesson for Mr Obama and his party is simple: listen to the centre. They are not listening. They appear to be stone-deaf. In Mr Obama’s case this is perplexing. He triumphed last year as a moderate, a pragmatist and a bridge-builder. He promised to change Washington. It was what centrists wanted to hear. It helped, of course, that Mr Obama is a man of charm and intellect, enormously likeable, a case-study in presidential demeanour."

Bank of England says it is hard to measure QE’s success

The Times
"When will it end?Nobody knows. The Bank’s latest £25 billion tranche of purchases will be completed in February, but the MPC could decide to extend the £200 billion limit again."

The Big Question: Is quantitative easing creating more problems than it is solving?

"..Evidently, the economy has not been responding to the medicine with the alacrity once hoped for."

Harmony in the G20 is starting to unravel

"But behind the ostensible harmony, the shared interests forged at the height of the financial crisis are starting to diverge. Some countries are already going their separate ways (see box). Australia and Norway are both already tinkering with monetary policy, although their commodities-fuelled economies have few implications elsewhere. But last week's statement from the ECB also included noises about an exit strategy: "...looking ahead, not all our liquidity measures will be needed to the same extent as in the past." And within 24 hours of the weekend's G20 communiqué, Manmohan Singh, the Indian Prime Minister, signalled that stimulus measures are set to be withdrawn from 2010."

Europe's industry slams China over currency

""I am deeply concerned about recent exchange rate developments," said Jurgen Thumann, president of Business Europe, the pan-EU lobby."An overvalued euro is not good news for growth and is inconsistent with the commitments of the G20 countries for an orderly resolution of global imbalances. We must insist that our partners honour their commitments." ...China has held the yuan fixed to the dollar despite its huge trade surplus through vast purchases of foreign bonds. This has allowed it to flood Europe with cheap exports, gaining market share on the coat-tails of dollar devaluation."

Sunday, 8 November 2009

This financial mess isn't even the end of the beginning for UK wealth

"So terrible was Gordon Brown's economic stewardship during his decade as Chancellor from 1997, and so huge has been his "fiscal stimulus" since, that the UK now has the biggest structural deficit of any major country.

Britain faces a 2009/10 fiscal shortfall equal to 13pc of GDP – the biggest in our peacetime history – with little sign of improvement. The Government will borrow some £200bn on taxpayers' behalf every year until 2012/13 at least – eight times above "normal" levels. In just four years, an extra £32,000 will be added to the existing sovereign debt burden of every British household."

In an admirably frank report last week, the International Monetary Fund singled out the UK as "uniquely vulnerable" to spiralling debt service costs as we deal with the mess left by Brown's fiscal incontinence. In 2007, Britain spent 4.2pc of its tax revenues on debt interest. By 2014, we'll spend almost 10pc of receipts on servicing government loans, before we even start paying them back, as our national debt sky-rockets from 40pc to more than 100pc of GDP.

Saturday, 7 November 2009

Bank of England says financiers are fuelling an economic 'doom loop'

"On the eve of the G20 meeting of finance ministers in Scotland, Andy Haldane, the Bank's executive director for financial stability warned that the relationship between the state and banks represents a "doom loop" which will keep inflicting crises on the public unless arrested. ....Mr Haldane, who was a key part of a Bank unit which was among the first to warn, well ahead of the crisis, of a dangerous gap between what banks had in their balance sheets and what they were lending customers, made the comments in a paper written with Piergiorgio Alessandri, published on Friday."

Friday, 6 November 2009

£1.5trn could be added to national debt

"The financial crisis is likely to add up to £1.5 trillion to the national debt, the Office for National Statistics (ONS) said today.The surge comes from the huge liabilities of bailed out banks such as Royal Bank of Scotland and Lloyds Banking Group being taken on to the public balance sheet."

Thursday, 5 November 2009

Bank of England primes money presses for another £25bn to fight recession

"The Bank's Monetary Policy Committee voted to extend its programme of quantitative easing (QE) by £25bn to £200bn as it stepped up the fight against the most severe recession the country has faced in post-war history. It left interest rates unchanged at the historically low level of 0.5pc."
Bank of England pumps extra £25bn into economy (Independent)
Bank of England to inject another £25bn into economy as rates remain at 0.5% (Daily Mail)

Wednesday, 4 November 2009

National debt likely to double in four years

Daily Mail
"In research released as the Treasury unveiled its latest City rescue, the European Commission warned Britain's national debt is likely to double between 2007 and 2011 - a leap only exceeded in the EU by Ireland and Latvia.It lashed Gordon Brown's government for entering the downturn with fraying public finances, releasing estimates showing we are running the worst underlying, or 'structural' budget deficit in the EU, at twice the regional average."

Fitch Cuts Ireland's Credit Ratings

"The Irish government suffered another blow Wednesday as Fitch Ratings Inc. cut the nation's credit ratings by two notches, citing a decline in gross domestic product and ballooning government liabilities."

MPC’s 'feeble six’ need to do their jobs before the economy falls off a cliff

"The MPC needs to increase QE by at least £50bn at this meeting. Posen and Tucker seem likely to vote to do more. Why Sentance, Fisher, Barker and Bean voted against more QE remains unclear, as they haven't told us. It's time for them to shape up and do their jobs, and take out more insurance to prevent the economy dropping off a cliff. My guess is that King, Miles, Posen, Tucker and probably Barker at least will vote in favour."

US to reduce Quantitative Easing as rates kept low

"The Federal Reserve reiterated its desire to keep American interest rates “exceptionally low” for an extended period, but gradually reduce some of its quantitative easing as the US economy begins to recover."
U.S. to Sell $81 Billion in Long-Term Debt Next Week (Bloomberg)

UK interest costs 'equal to entire Transport bill'

"The IMF singled out the UK as being at significant risk from the threat of rising debt interest costs as it absorbs the effects of the financial and economic crisis. It said that the proportion of UK taxes that will go towards financing the national debt will, in five years' time, be double what it was just before the onset of the crisis.It said: "Just the increase in interest spending in the United Kingdom is about twice annual outlays for environmental protection and is equivalent to annual spending on public transportation."

Tuesday, 3 November 2009

Billions of dollars in aid but nothing in return from Afghanistan

The Times
"If you are putting that much into a country — $38 billion (£23 billion) in aid since 2001 and $10 billion planned for 2010, according to the Congressional Research Service — you have a reason to ask for co-operation. ..."

Taxpayers hit for £28.7bn more amid banks break-up

"Taxpayers were hit for at least another £28.7 billion today as two state-backed lenders unveiled break-up plans on a seismic day for the UK banking sector.Royal Bank of Scotland and Lloyds Banking Group will have to shed more than 900 branches to ease European competition concerns over the vast state support given to them in the past year.The disposals - which could take up to four years - will put around 10 per cent of the UK retail banking market up for grabs for smaller players or new entrants."

Australia raises rates for second month

"Australia's central bank increased interest rates by a quarter point for the second month in a row as the recovery in the economy gains traction."

RBS & Lloyds: the cost to you

"According to experts at Fitch, this move will cut the total potential losses to the taxpayer by a half from £485bn or 30pc of GDP to£208bn or 14.4pc of GDP – though this assumes that everything in the APS is worthless. In July it said it expected the eventual net cost to be £41bn, but whether or not that should now be halved they are yet to calculate."

Bank of England Poised to Sustain Crisis Aid

"The U.K.'s top central banker, Mervyn King, faces a tough call at a pivotal meeting this week: Whether to continue showering money on Britain's troubled economy while other countries consider dialing back emergency relief measures.Many signs suggest Mr. King and officials on the Bank of England's interest-rate policy committee will expand their sweeping bailout of the economy. Growth prospects are dimmer for Britain than nations such as France, Germany and the U.S. The British economy, heavily dependent on the financial-services industry and fueled by high levels of consumer debt, is seen by some as acutely vulnerable to the aftershocks of the global crisis."

Gold Trades Near Record in Asia After IMF Sale, Dollar Decline

"Gold futures in India and Dubai surged to records today after the IMF said it sold 200 metric tons of bullion to the Reserve Bank of India for about $6.7 billion. The Washington- based lender agreed in September to sell 403.3 tons of gold as part of a plan to shore up its finances and lend at reduced rates to low-income countries."

Sunday, 1 November 2009

Labour's great bank sell-off could cost taxpayers another £40bnTreasury sources have told The Sunday Telegraph that the move will be announced to the

"The EU is demanding branches be carved out of Royal Bank of Scotland and Lloyds Banking Group that will be sold to new entrants and operate alongside a rejuvenated Northern Rock, creating three new banking players in an industry that was becoming dominated by a handful of high street names. ....The £40bn estimate is subject to change and will be finalised once the delicate negotiations with the EU are concluded in the coming 24 hours"
High street banks to be broken up (Telegraph)
"Treasury sources have told The Sunday Telegraph that the move will be announced to the House of Commons after the European Union made it clear that the state aid pumped into Lloyds Banking Group and RBS meant that they had to be reduced in size."

The slow-motion New Labour putsch that swept our nation away

Daily Mail
"This is the disclosure, by a New Labour apparatchik, Andrew Neather, of the real purpose of his party’s immigration policy.The Blairites’ aim was to undermine and get rid of traditional conservative British culture. They really did want to turn Britain into a foreign land. Mr Neather wrote an article praising immigration because it provided lots of cheap nannies and gardeners for funky Londoners like him.Apparently thinking nobody would notice, he then revealed that there had been ‘a driving political purpose: that mass immigration was the way that the UK Government was going to make the UK truly multicultural’."

Why is America gloomy when the news is good?

The Times
"They are fearful that a new banking crisis will emerge. They see an administration and a Congress that are spending America into such deep debt that the dollar will continue to decline, forcing the Fed to raise interest rates to prevent a collapse of the currency."

Labour’s secret scheme to build multicultural Britain

The Times
"Can the recent success of the British National party be explained by the misguided immigration policy of the government? That was the killer question from the floor during the notorious episode of Question Time 10 days ago. Four times it was put to Jack Straw, the justice secretary, and four times he avoided answering it. Until that evening I had thought Straw was a fairly decent sort of bloke, for a politician. No longer. In a man so central to the new Labour project, who has served in cabinet under Tony Blair and Gordon Brown, who has been home secretary and foreign secretary, evasion on such an important subject is shocking. ....Under these circumstances, Labour’s obvious gerrymandering by mass immigration — black and ethnic minority people are very likely to vote Labour — is perhaps the least of its crimes. ...But it is obvious that if you abandon any attempt to know whether a visitor has left, according to the rules of immigration, then you have given up control of your borders and what would also be a useful security measure. ....But the first thing to do is to expose the patronising lies, the seigneurial arrogance and the criminally foolish social engineering of the Blair-Brown regime; it does not deserve the name of Labour government."