Friday, 27 February 2009

Bond Market gives thumbs down to EU bond

It did not take the bond markets long to fulfil my prediction of a few days ago and give the latest EU idea a raspberry. The idea of funeling these offerings via the EIB (European Investment Bank) lead to EIB 10 year bond spreads blowing out to 90 bps over bunds and close to Spanish levels indicating where the market thinks the money will go.

Dresdner are quoted as saying the yields on EIB bonds could go through the average for EU countries if the EU persists with this idea. You can fool Darling Gordon but you cannot fool with the bond market! EIB debt is not government guaranteed so why buy it when there is so much sovereign issuance around?

RBS are paying a fee of just 2% to insure their vast supply of toxic assets with the Bank of you and me. The B shares in RBS will only pay 7% when they get around to paying a dividend cf 12% HMG got on its previous bank rescue prefs. Good deal for RBS and a bad deal for us, our children and grandchildren

I found Junius very funny on Dippy Denny and MI5. Unless DD has connections to OBL then I cannot see how he can be of the slightest interest to the British authorities.

Thursday, 26 February 2009

Euro problems like bad blood will out

I remember at one of the first regional UKIP events I attended in 2007 standing up and telling Malcolm Wood who was chairing the event that the Euro would inevitably disintegrate unless there was a political union to back it. This was a minority view then but is now probably the majority view. The second leader in today's DT is entitled, "An ever weaker union" and writes of growing europhile concern that the Euro is unsustainable. It makes the point that the Euro was conceived in the good times but the test would come in bad times and that time has now come. Or, as Warren Buffet puts it, "When the tide goes out you find out who has been swimming naked".

Germany has the strongest economy in the EU but they have made it clear, most recently in a speech by their former foreign minister at the LSE on Tuesday, that they do not intend to bail out the PIGS.

The other part of the leader deals with Barroso and the Commission's desire for a pan-European financial regulatory system asap. I explained yesterday what a disaster this would be for the UK. In the words of the former Home Office permanent secretary we would be f*cked.

The Telegraph run this story in their Business section as well under the headline "Europeans seek oversight for financial regulation" based on a report to the EU commission by, you've guessed it, a former Governor of the Banque de France one M de Larosiere. He waffles on about a choice between 'chacun por soi' or 'enhanced pragmatic sensible cooperation'. I have never known the Banque de France not put French interests first! Perhaps la vie en rose is not quite as rosy in Paris these days.

However as the DT journalist notes countries have been very reluctant to give up regulatory control of their financial system. I bet our dear saviour of the world, St Gordon of Dunfunkle, is amongst the first to volunteer to give away this, one of the last vestiges of our sovereignty, to the EU to secure his next lucrative job on the international stage like Tony

Wednesday, 25 February 2009

German Landesbanks & Swiss Cheese

Let us leave Dippy Denny to NF's tender mercies and his inevitable fate and write of more important matters.

The DT business section reports today that the state owned Landesbanks, one for each German State so 11 in all are in trouble through getting involved in leveraged excess and straying from their home patch. Alas it is the same old story of fallen bankers and fast derivatives. Landesbanks remit was to boost regional industry and finance family run Mittelstand firms that are the heart of the German manufacturing economy. To that end they had a state guarantee for their liabilities but alas that guarantee also extends to covering their losses in foreign fields. This could even bankrupt the guaranteeing state!

One cannot overemphasize the importance of these banks to the German economy. They are more important than the infamous larger Dodgy Bank, Dreadful Bank, Comical Bank and Hypothetical Bank. Landesbanks are truely the heart of the German economy. Frau Merkel will slaughter her PIGS but if the Landesbanken fall then Germany falls.

Coming closer to home the story in the same organ that Ivan Pictet, head of the Geneva banking association, has warned that if Switzerland gives up its banking secrecy laws the Swiss financial sector will reduce by 50% from 12% to 6% of Swiss GDP. Customers are already withdrawing their money because of concerns about tax probes from the EU and US. The Swiss know how important it is to keep their competitive advantage in this area. The EU will be applying pressure with talk of level playing fields etc. I am sure the Swiss will resist this and call the EU's bluff but I am equally sure HMG will cave in to EU pressure. They always do. The Swiss have a great Ace in the Hole in that the EU political class do not like paying tax either and have squirrelled away money in Switzerland. No bank security is perfect as I am sure M Pictet will remind Barosso.

Tuesday, 24 February 2009

Denny savages the Soggy Sheep

In the words of the common croucher I had a good chortle when I read on GLW's blog the contents of Denny's email to Arnot slagging off Zuckerman,

"I have to say too that to me, MZ has proved himself to be a dubious P.Secretary. There have been a number of times when I have wondered about his competence as a lawyer.

I don't mind saying that because I would happily say so his face (I would not say anything about someone behind their back that I would not be willing to say to their face). In fact have come close to doing so. The only reason I have not is for the sake of conciliatory harmony in the NEC, but it is not easy for my personal disposition to accept fools lightly, and those last two decisions lead by him which swung the NEC into unnecessary decisions are foolish enough by any standard in my opinion.

I know for a fact he deliberately will not answer anything to anyone, unless practically forced to, and complained to me once about being too busy to answer silly people asking silly questions - as he sees it. The whole idea of a PS is to deal with the queries coming in, and organise the direction of party business within his remit. He does not seem willing to do this, beyond narrow confines of what he deems suitable. My opinion is if he does not like the heat he should get out of the kitchen."

When I was elected to the NEC last March I was in 3rd place and Denny was 4th. The first question I was asked by most people was, "Who voted for Denny? Nobody likes him". I found out why at my first NEC in early April when I was verbally abused by Denny for having the temerity to ask our leader, NF, produce some evidence to support his demand we expel an entire branch. My fate was sealed. Farage was heard later shouting at his sycophants, " I want him off". Over the next 5 months Denny aided by Bannerman led a vicious, unprincipled campaign to have me removed from the NEC. I never did find an answer to the voting part of the question!

I soon found this pattern of expulsions repeated in London and the Eastern region. It is no wonder that UKIP membership is in decline. I sat through a number of NEC discussions on expulsion but not a one on recruitment or coming electoral campaigns.

Their excuse to get rid of me was that I had defamed Mr Gill behind his back. Mr Gill was supposedly in charge of MEP selection and I took the old fashioned view that when you are in charge of something you make sure you can be contacted and better still you are present. Mr Gill was neither. I made repeated attempts to contact him with no success. Is it not ironic that this is exactly Denny's recent complaint about Zuckerman?

I did say that Mr Gill, 15 years a Tory MP, seemed never to have even been a PUSSY. Denny of course thought I was talking about cats but in parliamentary terms a PUSSY is a Parliamentary Under Secretary and is the lowest rung on the government ministerial ladder. No Government Minister is ever allowed to go on holiday without leaving clear and effective contact details with the private office. Mr Gill had gone on holiday and seemed unaware of this important executive convention.

I never impugned Mr Gill's competence or ability in any way. Denny however seems to have impugned Zuckerman's professional abilities something I deplore. Further NF will not forgive or forget Denny's description of him as a waffling Soggy Sheep!

It was clearly convenient to blame me for the NEC leaks. Give a dog a bad name etc. This has now been shown to be completely false. Whilst on the NEC I never leaked and nor did I post Internet comments. Denny is shown as having 1229 posts to his name on Democracy Forum since 2005 the period he was on the NEC! Read Denny's postings on the Democracy Forum thread, Dr Eric Edmond removed from SW MEP list and you gain much insight into Denny's character. Click here to read

I trust the NEC will now act promptly to remove Denny from its number.

Credit Contraction in Euroland and the UK

There is another piece in today's DT by AEP noting the mutiny by the NCB Club Med Governors on the ECB board against the financial rectitude the ECB inherited from the Bundesbank. Print money cries the PIGS but who will pay the piper? The Maastricht Treaty, which set up the ECB, forbids the ECB from buying up dodgy bonds with newly printed money. This is perceived as minor problem that can be ignored by Barroso but will go down very badly in Germany where already a majority of the populace want their Deutsche Mark back.

A major credit contraction was inevitable once banks were forced to raise their capital ratios. Previously a minimum of 8% of a banks lending was its own capital and the other 92% came from deposits i.e. a multiplier of 11.5 roughly. Increase capital requirements to say 12% and the multiplier comes down 7 and credit contracts by around 40% or banks need 50% more capital. It's a simple sum!

We saw the same lack of joined up thinking in the UK when Northern Rock was required to repay its Bank of England finance as quickly as possible encouraged by the idiotic chanting of the mantra " the tax payer's money must be repaid asap", lead singer the Lib Dumb Vince Cable. He should have stuck to dancing! Northern Rock obeyed and customers with expiring fixed mortgages were told to go elsewhere. Northern Rock made very large payments to the BoE and their customers paid through the nose for fresh fixes if they could get them. Credit collapsed further and the contagion was spread to other banks.

Now Northern Rock has been commanded by Gordon, the saviour of the World, to up their lending using £14 bn. of taxpayer's money! Unfortunately the Rock has a number of bonds coming up for refinancing. Simple, split the Rock into two separate legal entities and dump all the liabilities into one bit and start again with the good bit and our £14 bn. They did this when they effectively robbed the shareholders of their interest in the Rock in a compliant UK court. The bond market where these liabilities will end up is a much more powerful and international beast that has in the past destroyed US presidents. Gordon may save the world but who will save Gordon from the bond market? Who saves the saviour? (I would be grateful for a Latin translation of this question.) The bond market always wins.

Monday, 23 February 2009

EMU Crisis and SW MEP list

AEP has a good piece in today's DT business entitled "Is it fair to ask the Germans to bail out the PIGS", a theme I have frequently written about. More worrying is the final paragraph that notes the architects of EMU were well aware of its in-built problems. That this was planned to force the EU to create new rules and institutions to strengthen and safeguard the Euro and when the 'beneficial crisis' arrives, as it has, this would bring about the great leap forward to full union. I fear this is what will happen given NuLabour's desire to admit to nothing but blame external factors for our problems so when the external institutions react Nulabour has to jump to their command. GB will of course soon be looking for a new job commensurate with the talents of a man who has just saved the world. What better post than EU OberGruppenfuerher worldwide Financial Stability?

I wish to highlight some statements I made on my website when I stood last summer for election onto the SW MEP list:

Give all my salary to UKIP – some £40k pa

Yes I know MEPs get paid gross more than that but that is roughly what I would receive net. NB I know of no EU rule that stops an MEP giving his own money to whom he wishes.

I will always put my country’s interests before party interests.

All my actions, statements and articles have been governed by this over-riding principle. Unlike most candidates for political office I will do what I say. I am often asked by honest decent UKIP members who they should vote for. I always reply look at what candidates have done not what they say they will do and especially look at what percentage of their income they give to our cause and how much they take out.

I don’t want a country for self-important greedy political careerists.

UKIP members can judge for themselves who these careerists are and make their decisions accordingly.

I have never been in any other political party.

Those who seek to smear me and besmirch my reputation should note this. It is true and I will vigorously defend my reputation at all costs against those who seek to destroy it. A party that encourages half truths and anonymous lies that seek to destroy a members good name forfeits its claim to loyalty from its members.

I was elected on these commitments by the SW members. I attended all four hustings where the voting members were able to question me on what I stood for.

My views have not changed and will not change.

Thursday, 19 February 2009

ECB on Sterling Devaluation

As I noted previously our EU partners are not happy about Sterling's slide which they see as a competitive devaluation in order to gain economic advantage. One Mr Bini-Smagi of the ECB is reported in today's DT as saying, "The integrity of the single market itself can be put at risk if the exchange rate is used - and seen to be used as an instrument to gain competitiveness at the detriment of others"

More worrying is Mr B-S's subsequent comment that he was pressing the UK to allow the ECB to become a pan-European financial regulator and he expected the UK to agree to such a deal that would give the ECB banking supervision powers throughout the EU.

If this happens we are f*cked! The City of London business will leak away to Frankfurt and Paris and London will become like Detroit.

The CBI yesterday said that Sterling's depreciation was not helping UK manufacurers as their wonderful EU market beloved of the CBI Europhiles was also in deep stuk! When the tide goes out you find out who has been swimming naked as Warren Buffet says!

Friday, 13 February 2009

Darling will be pounded at EU Finance Ministers Meeting

The Germans and French are not happy at the the UK government policy of letting sterling slide. They see it as a currency war designed to undermine the competitiveness of their exports to the UK. Did the UK government complain when the Euro was on the slide against Sterling, North of 1.40 €/£? They did not! This shows clearly the UK market is far more important to the EU than the EU market is to us. It gives the lie to the Europhile claims that us leaving the EU will cost us jobs. The truth as in many Europhile arguments is the exact opposite They are more dependent on our market than we are on theirs!

Mervyn King's statements on Wednesday on 'Quantitative Easing' , economist speak for printing money has also enraged the EU as it causes Sterling to sink further. The French and German car manufacturers maintain a very powerful lobby in Brussels to ensure the Commission brings forward regulations beneficial to their industry. Hence the regulation to only allow franchised, expensive garages to carry out car maintenance and repair using expensive 'authorized' spare parts. Car manufacturers make far more money from selling spares than selling new cars! Eliminate the competetion from independent garages using second source, perfectly good, spares does wonders for the profits of Renault, VW etc. Second source spares are usually made on the same production line as authorised spares, they are just put in an unbadged box!

Its amusing to see Mervyn making mincemeat of the journos questions at the BoE press conferenence. The Oxbridge Professor addressing the village idiot as Jeff Randall put it except Mervyn was a Professor at the LSE! The problem with printing money is it's a Robert Mugabe ploy and leads to hyperinflation, but then so are a lot of Gordon's policies on democratic rights copied straight out of the Robert Mugabe handbook. It also upsets the PIGS who used to run their economies doing this until Frau Merkel whipped them into being good citizens of the 4th Reich

Tuesday, 10 February 2009

Has Democracy Forum Fallen?

The whole of Democracy Forum has been taken down. Does anyone know what has happened? Is it sabotage? Has Anthony Butcher been rubbed out?

Re Euro matters it is reported that at the emergency EU summit of national leaders later this month the Germans will be ambushed into supporting a 'debt agency' to issue EU bonds so the PIGS will not suffer further market humiliation. The PIGS public finances are rapidly deteriorating, Ireland's deficit is now 12% of GDP and there are doubts Italy and Greece can roll over their maturing debt in a tightening credit market.

The German's are not happy as they don't want to bankroll the PIGS.

Sarkozy's 6.5 bn Euro bail out to French car companies must be spent in France. No nonsense about fair competition or free movement of capital troubles the Gauls. The Brussels competition police will examine the bail out but it is certain it will be waved through. Toujours le self - interest.

Sunday, 8 February 2009

Swindon Meeting 7th Feb

Driving conditions were dreadful getting to Swindon and deep frozen snow made the car park very difficult. There were 63 attendees which given the weather I felt was a decent attendance. Mainly UKIP but a fair few former UKIP members.

The location, the Swindon GWR railway museum was excellent. Its well worth a visit, Mr Bannerman. Well done Bruce for finding it

A diverse range of views were expressed both from all sides of the UKIP debate in a very civilised and proper manner. This cast considerable light on UKIP issues from different strands of opinion.

John Petley made an excellent speech on the UKIP Brussels operation from the inside. Del Young gave a rousing appeal for democracy and integrity and how we should always put our country before any narrow party interest. Bruce Lawson gave a brilliant set of his personal manifesto proposals. Robin Page gave an entertaining and accurate account of his MEP non-selection process. Martin Haslam detailed how he was set up with a journalist from the Independent.

Unfortunately the Last King of Swindon, Bob FM, did not attend. A pity, he could have taken down some genuine witness statements and questioned the witnesses himself. I thought that's what good police work was all about?

The meeting finished promptly to give people a chance to get home in part in day light.

Friday, 6 February 2009

Swindon SN2 2TA Open Meeting Sat 7th Feb @10:30

I hope I will see you there at the railway museum, post code above, on Saturday. Registration is from 10:30 am and admission is £5 per head. We have tried to keep the costs down so bring your sandwiches, flasks etc if you wish. The speaker programme is below. This is an open meeting that anyone from any party who is concerned for the future of their country can attend. I want to die feeling we have passed on to our children and grandchildren what our parents and grandparents fought for to bequeath to us.




10.30 a.m. Registration

11.00 a.m. Welcome by Geoffrey Kingscott

Why are we here today?
Aims of U.K. Renewal

11.10 a.m. Peter Williams
Why we need an effective withdrawalist party

11.20 a.m. Eric Edmond
How we are controlled by the EU

11.45 a.m. Bruce Lawson
Vernon Colman - Why he is not here

TaxPayers Alliance - Why they are not here

11.50 a.m. Harold James

The View from here

12.05 p.m. Panel/Forum

Chairman - Peter Cole


Peter Williams

Delroy Young

John Petley

Martin Haslam
LUNCH - 12.45 p.m.

2.00 p.m. Len Baynes

English and British

2.10 p.m. John Petley

Disaster in Brussels

2.30 p.m. Robin Page

3.00 p.m. Bruce Lawson

Aims and Possible Solutions


3.30 p.m. Martin Haslam, F.C.A.
The Finances of a political party

3.45 p.m. Panel/Forum

Chairman - Steve Roxborough


Bruce Lawson

Robin Page

Delroy Young

Geoffrey Kingscott

4.30 p.m. Approximate Closure and Thanks - Eric Edmond

I see the Common Man has been posting his usual lies about me. I say to him, put your name to it and we will see you in court. I notice that the honourable Mr Gill has been unable to produce any evidence to support his despicable BNP smear against any one of the signatories of the letter opposing the constitutional changes. Thinking of the NEC of which Mr Gill is a member, I am reminded of Mark Anthony's line from Julius Caesar, " so were they all, all honourable men"

I refer anyone who wonders what possible rationale is behind these evil, malicious and very damaging lies about me, David & Del to recent speculative posts on the democracy forum

Many people put their names to these posts on the Forum unlike the Common and cowardly Man.

On the economics front Ros Altmann, TB's former pension guru, hit the nail on the head on Newsnight last night by pointing out that Government, i.e BoE policy, in cutting interest rates to near zero was penalising those who had behaved responsibly and prudently e.g. old people with savings, whilst rewarding those who had gotten us into the mess by over lending to property spivs. Nothing sums up the dishonesty and immorality of this Government more than this.

Worse it will discourage saving and make banks and building societies even more dependent on the wholesale money markets whence came all our problems.

Immoral and stupid!

Wednesday, 4 February 2009

Lies nailed & Spanish Economic Woes

Spain is now in dire economic straits, their 10 year bond spread to bunds rose to 1.37% yesterday at their 7bn Euro 10 year bond auction. Greece dare not even try to get a 10 year offering away for fear of complete disaster. Unemployment in Spain is now at 3.3 mn or 14.4%. Civil unrest will follow. They are being shafted by the Euro.

I have made it clear I will not tolerate my reputation and integrity being trashed by sources close to the UKIP hierarchy. This is not being disloyal to UKIP. I have an absolute right to defend myself and my reputation and I will do so at any cost.

The statement from the Common Man blog that "Mr Young voted in favour of the expulsion of both Mr Abbott and Mr Edmonds." is a lie. Del voted against my expulsion and David's whenever he was present. As Nigel says, Any Fule do know the Common Man can't spell.

An email from Mr Gill to Mr Huxley is now posted on the internet. It smears me and my co-signatories to a letter sent to UKIP members advocating rejection of the proposed constitutional changes . Mr Gill was in charge of UKIP MEP selection last summer. I print my email reply to Mr Gill below.

Dear Mr Gill,

I reproduce part of your email in italics below to Mr Huxley, a decent ordinary member now posted on the internet..

"The fact of the matter is that until they were expelled from the NEC the behaviour of certain members frustrated all attempts at progress (hence the need to change the Party rules) and I am convinced that this was a deliberate tactic.

I would not go so far as to say that all of the signatories to the letter have links to the BNP - some almost certainly do but there are one or two others who I suspect have simply been duped into lending their support without recognising the ulterior motive.

The first paragraph clearly refers to David Abbott and myself and is a lie. David, Martin Haslam, Del and I argued on the NEC for justice for ordinary UKIP members and for financial transparency in UKIP accounts. I presume the converse is your idea of progress. Did you not learn from your long service on the Tory backbenches that British democracy means tolerating and respecting people who have views that may not agree with yours?

The second paragraph is a disgusting attempt to smear the signatories to a letter opposing the proposed constitutional changes, a letter they were perfectly entitled to send. If you have evidence to support your outrageous accusation that I, or any of the other signatories, have BNP links then you are honour bound to publish it. Otherwise you should publicly apologise to all the signatories.

Eric Edmond

An elected NEC member with a democratic mandate illegitimately expelled

Tuesday, 3 February 2009

Bond Spreads & UK Strikes

I returned from ski-ing in France on Saturday. The Snow conditions were the best I have seen in 30 years but the mountain cafes were virtually empty. The prices are too high and even those from the Eurozone are feeling the pinch. Unemployment in France will rise and indeed they had a public sector transport strike last Friday. As I predicted civil unrest will spread as we can see in the Total refinery and its associated sympathy strikes in the UK in the last week. Politicians who ignore this grass roots feeling do so at their peril. The seeds of these problems in the UK were sown over the last 15 years when our government handed over control of much of our country to the EU bureaucrats. It as Warren Buffet says, "When the tide goes out you can see who has been swimming naked". The economic tide has certainly gone out and the pigeons have come home to roost. For Noah this was good news but for Gordon its very bad news indeed.

Italian bond spreads have come in a bit to 1.4% over bunds. Greek spreads are still at an eye watering 2.5%. Most worrying from Gordon's viewpoint the UK spreads have widened to 0.4 % from 0.2% two weeks ago indicating as I noted in my pre-ski blog, Johnny Foreigner may be thinking twice about buying more of Gordon's gilt edged toilet paper.