Tuesday, 1 June 2010

More Eurozone bank losses likely & more LibDem Laws excuses a certainty

Reuters report that yesterday the ECB warned that Eurozone banks face a second wave of losses up to 190 bn €. The ECB also announced that up to 28th May it had purchased 35bn € of Eurozone government bonds. Although not stated by the ECB you can safely assume these purchases were overwhelmingly Greek, Portugese and Spanish government bonds. ECB council member and president of the Bundesbank, Axel Webber, expressed some unhappiness with this move extending these purchase which started on 3rd May to coincide with the announcement of the EU/IMF rescue package. "The purchases of government bonds in the secondary market should not overshoot a tightly-capped limit," Weber said in a speech prepared for delivery in Mainz, Germany. He did not suggest a particular limit.

The DT reported today that paradoxically the BoE announced it was showing a profit on £8 bn on it gilts purchased under its QE aka money printing programme! Ho, hum! That paper profit would rapidly disappear if they ever tried to sell those £198bn of gilts in the market as gilt prices would take a nose dive. It does show as BarCap said, 'quality is a relative concept'. Gilts are not a great credit at present but Eurocrap is worse hence the small rise in the price of gilts relative to Eurobonds.

Meanwhile Spain continues to suffer credit downgrades from AAA to AA. The Spanish government has announced it aims to pass a much anticipated labour market reform by the end of June with or without consensus with the unions and business representatives. The union boys and girls don't like this so stand by for more Spanish strikes, street protests and riots from the 20% unemployed. Euro equities continue to fall but not as much as UK equities. We will soon be in the spotlight post wee George's 22 June show.

Am I the only person who finds the apologists for D Laws expenses fiddle utterly nauseating. The attempt to conflate the issue with Laws' homosexuality did not go done well with Peter Tatchell the gay rights campaigner on Sopell's Sunday Politics show. As Tatchell said the issue is about honesty not sexuality and hearing Paddy Ashdown describing Laws as a man of integrity is clearly the opposite of the truth in this matter as Tatchell rightly pointed. We in Yeovil are well used to LibDem dissembling but it is good the rest of the UK sees it.

Guido Fawkes makes the same point on his blog, "Nevertheless, none of this trumps the fact that he took taxpayers’ money to pay his boyfriend’s rent on the quiet." and "Because legislators make the law it is surely right that we demand the highest standards from them, law-makers can’t be law breakers. If you don’t think you can merit the public’s trust beyond reproach, maybe public service isn’t for you.". I agree with Guido.

Finally I have written to the Yeovil weekly, the Western Gazette, calling for Laws to stand down as an Mp as he was clearly elected under a false prospectus. I copy my letter below which may well not be published by the West Gaz.


Mr Laws clearly broke the parliamentary rules on expenses by paying a large sum of public money to his long term homosexual partner as rent. Having campaigned as a candidate untainted by the expenses scandal, supported as Mr Integrity by Paddy Ashdown and made much play in the campaign of Mr Letwin, the Tory candidate in Dorset, being forced to repay expenses he wrongly claimed surely Mr Laws should now resign his Yeovil seat and give his constituents whom he clearly misled a chance to re-elect a different MP if they so wish. Mr Laws can of course stand in the subsequent by-election but if he is sincere in his oft stated wish to clean up politics let him put his fine words into practice. It is in his interests, the interests of Yeovil and my interests as one of his constituents for him to do so.

Eric Edmond

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