Monday, 25 April 2011

Farage's UKIP, a home for third rate Tory failures

When I joined UKIP in 2007/8 it was the first political party I had ever been a member of. It is still the only party I have ever been in. Shortly after I joined I went to a local Freedom Association meeting where because we had a mutual colleague called Mervyn King I had a long and informative chat with Alan Sked of LSE who was one of the leading intellectual lights behind the formation of UKIP in the 1990s. When we met Alan had already given up on UKIP as it had become as he had predicted taken over by right wing Tory failures.

UKIP's real breakthrough had come in the 2004 European elections thanks to Robert Kilroy Silk, then a huge media star and easily the ablest politician UKIP has ever had, providing UKIP with a huge amount of TV coverage. I was at Liverpool University at just about the same time as RKS and knew of him as a man of the left. No one ever called Alan Sked right wing either! RKS triumphed in the Easy Midlands to the extent that the number two on the slate the even then useless Clarke was also also returned as an MEP.

RKS correctly identified the next step for UKIP was to go out and kill the Tories. It never happened. RKS was quickly shown the door by UKIP's so called ex-Tories who were very keen to resuscitate the Tories not kill them!

I became a UKIP activist and spent many useful hours travelling up and down to Lexdrum House with Alan Wood, then one of UKIP's few district councillors elected, get this Mr Farage, in a fptp election. Malcolm Wood used to drive us and was clearly discomfited by some of AW's remarks concerning UKIP's hierarchy and their clear desire not to damage their old Tory chums. I have never been one for conspiracy theories and took what Alan said with a pinch of salt. I was wrong to do so. Alan was dead right and to do no damage to the Tories was clearly the hidden agenda of Mr Farage and his cabal.

Since then this pattern of punch pulling where the Tories are involved has become so blatant as to now be obscene.

We have Pearson, Farage's UKIP puppet leader demanding UKIP candidates stand down in favour of Tory candidates in the South West and even going out canvassing for the Tories! Farage had of course absented himself from leading UKIP in the tightest General Election in a generation to take on in Bucks Bercow, formerly a Tory, but voted in as Speaker by Labour and now thoroughly hated by the Tory establishment. That earned Nigel a lot of brownie points with the Tory establishment!

Then we have Bannerman who when a Tory could not get himself selected for a winnable Tory Westminster seat but is now allegedly touting himself round the Tories for a number one MEP slot as a Tory candidate. The South West is currently rumoured to be favoured by Mr B!

Then there is ex-Tory MP Mr Gill of UKIP's NEC. He stood in 2010 for UKIP in his old seat but found out it was the Tory brand not him the voters loved. However he had previously done his bit by 'supervising' the MEP candidate selection process in 2008 for Nigel although perhaps supervising is to strong a word given how John West's confidential test interview suddenly appeared via a London Cab and Morocco on Youtube with the nasty title, ' How not to do politics'. Perhaps Mr Gill can remind us what supervisory action he took about this incident.

And how about Dartmouth, another unloved Tory, unselected in winnable Tory seats, who during the South West MEP selection process had a number of sole speaking engagements facilitated by the then UKIP RO Malcolm Wood. When Alan Wood found out about this he was rightly incandescent with rage as it was so blatantly unfair to the other candidates. Malcolm Wood is now helping the Europhile belted Earl further the cause of the EU as the Tories always have done since 1973.

Mr Farage has frequently claimed he was offered a 'safe' Tory seat if he stood there as a Tory. It is strange that this safe seat has never been named. It is like many of Mr Farage's statements uncheckable.

Nigel is still hopeful however that one day he may be nominated by the Tories to park his bum on the red leather of the House of Lords by Dave for services rendered.

And yet incredibly the UKIP foot soldiers still believe what Nigel tells them that the BNP and the wicked UK electoral system are the mortal danger to UKIP and that only Nigel can save them! To paraphrase General Franco it is the large legion of Tory fifth columnists within UKIP that are the mortal danger and will completely sabotage our withdraw from the EU cause. All the Tories have ever done since 1973 is hand over more and more of our country to Brussels and UKIP's Tories will do just the same. Once a Tory always a Tory!

Sunday, 24 April 2011

Farage's UKIP leadership failure re-visited

I see on Butcher's Forum the Faragistas responded to rational criticism with their leader's favourite ad hominen smear tactic linking any criticism to the BNP. Well I can squash that one straight away!

I am not a member of the BNP.

I have never been a member of the BNP.

I have never been to a BNP meeting.

I have never met Nick Griffin etc etc.

Unlike Nigel I regard the BNP as a complete irrelevance we should ignore and concentrate on arguments and facts that attack the EU and will get us our country back. This is what Trevor Colman is doing down here in the South West with his thEUnit initiative financed by Trevor, staffed with decent honest UKIP members and dedicated to putting the plain, clearly sourced, unvarnished, unspun, facts about the EU in an apolitical manner on a website accessible to all who are interested. Its an excellent initiative and deserves reward at the ballot box.

The second line of attack by the Faragistas on my comparison of the True Finn's excellent performance and Farage's UKIP's mediocre performance was another straight out of the Nigel book of excuses for electoral failure. The Finn's use a proportional d'Hondt voting system and if we used that in the UK Nigel's UKIP would be have won a LibDem number of seats and NF would be in Dave's coalition cabinet along with Nuttall, Bloom etc. It's laughabable! Farage supports the AV system which is not a proportional system and is no better than fptp and possibly worse.

There is a big difference between a National election with a high turnout, 70% for the Finns last week, that will lead to the formation of your government that will tax you, defend you etc and a European election with a low turnout of 34.7% that leads to no where but a silly talking shop in Brussels where Bannerman, Bloom, Farage etc can deliberately make an exhibition of themselves that damages our cause and makes it easy for Cameron to call us fruit cakes and loonies and ignore our arguments.

To recap, the Finns voted True Finn in an election that genuinely mattered. In similar circumstances in the UK the media would tear Farage and his Cabal apart well before election day. To paraphrase Sun Tzu quoted by Gordon Geko in Wall Street, 'Every election is won or lost before the first elector enters the polling booth'.

I agree the UK voting system does not favour very small parties but if the argument is UKIP can get 19% like the True Finns then its not a small party and in a fptp election UKIP would get a significant number of MPs. A likely scenario in England might be Labour 30%, Tories 30%, UKIP 19%, Lib Dems 16%, Others 5%. That would give UKIP the balance of power and they would be able to form a governing coalition with the Tories.

The problem for UKIP is not the voting system as Caroline Lucas showed last year in Brighton as did Dr Richard Taylor who won twice, 2001, 2005 in Wyre Forest on a single issue. It can be done! Farage and his sordid useless Cabal just are not good enough to do it. Bromley and Bucks proved that!

Until UKIP gets an entire new leadership it will continue to be as irrelevant as the BNP, Monster Raving Loony and the long standing Flat Earth party.

Thursday, 21 April 2011

And still the EU wants more of our money

The latest demand for an EU budget increase of 4.9% from Polish EU commissioner for the budget, Janusz Lewandowski, has brought the predictable squeals of disapproval from Dave. Its just like last time when Dave came home boasting he had succeeded in getting the EU budget frozen. What happened? It increased by 2.9%, just what the EU had asked for. One final point, which country currently benefits from EU budget increases? Poland now isn't that a strange thing with a Pole in charge of the budget?

The result will be the same as last time Dave will huff and puff and cough up our money to Mr Lewandowski citing treaty obligations or some other crap. What about your obligations to the British people who elected you Mr Cameron? It was amusing Mr Lewandowski could point out that Austerity Dave and Nutty Nick were in fact raising the UK budget by over 2% this year. Even at Eton people in glasshouses should not throw stones.

It must now be close to game over for Greece. The yield on their 10 year bond is now 15%. The ECB are intent on raising rates further. I smell a debt default, sorry debt re-stsructuring, within days. The EU 'crats must get their Easter holidays in first.

Portugal and Ireland will follow quick quickly with their debt restructure. Even the EU know they cannot be saved and anyway they are little countries a long way from Brussels but the Euro will still take a big hit.

The EU will then pull every trick in the book and break all the rules to try and save Spain. Currently Spanish bond to bund spreads have stabilised at 2.25%. It will be a close call but if Spain goes the Euro is dead as the EU currency. Spain's big problem as with the rest of Club Med is that tax evasion is the national game so government revenues will be badly hit.

I do wish UKIP were doing something to capitalise on this situation. They will never have more favourable conditions. The EU and the Euro are highly unpopular all over Europe. What we need is a star striker to put the ball in the net. What have we got? Yeovil Town reserves!

Tuesday, 19 April 2011

True Finns & Colin Denby show up Farage's leadership failure

The Eurorealist True Finn party gaining 19% in Sunday's national election shows up the failure that is Farage's UKIP currently standing at 6% in the polls. The True Finn result even exceeded UKIP's 16.5% in the meaningless 2009 Europeans. I say meaningless as the EU parliament is just a powerless talking shop full of puffed up non-entities like Farage and Dartmouth and powerless to change anything the Commission decides. The True Finns now have real power to veto EU plans and hence the EU 'crats since the election on Sunday have been running around like headless chickens shouting the extremists are coming extremists!

Looking at this result and results in other EU countries one concludes there is a solid core anti EU vote of around 20% throughout the EU. So why can UKIP not harness this and win seats in national parliamentary elections? The answer in one word is Farage. The treatment of Mr Denby, deselected without due process or the chance to defend himself, on the word of some one who it is reported has spent some time inside. Well Mr Denby the same thing happened to me. Farage appeared on TV saying a UKIP candidate had been advocating voting for another party. Well if it was supposed to be me it was completely untrue but I was never given a chance to contest my de-selection.

It becomes really sick making when you had Farage's puppet leader of UKIP Pearson going out canvassing for another party and Farage goes on TV dismissing it as 'not a hanging offence'. Well it would certainly have been enough to hang anyone who was not part of the Cabal! Dartmouth is running around in Brussels trying to get an EU mission set up in Yemen. Bloom continues his crass and embarrassing performance and now I read that Nigel's friend, Ms Fuller, is now a paid UKIP employee along with Mr Finch who posts his pro Farage drivel under the name Skeptyk.

Nuttall and Farage are both more obsessed with the BNP than getting us out of the EU. Well I can tell Nigel the BNP did not take us into the EU and don't keep us in the EU. That job was and is done my Nigel's Tory friends like Pearson. The BNP is irrelevant to our leave the EU cause! It is however very relevant to Nigel's cause of promoting Nigel on TV as the BBC's acceptable face of right wing politics on Question Time etc and when the Beeb want it he becomes the loony pro-smoking MEP with some ex-publican friends. Nigel is a god sent gift to the Beeb!

That is why Farage's UKIP can never deliver an effective parliamentary Eurorealist voice. First past the post is a handicap which can be over come as the Greens proved with Caroline Lucas in Brighton. If UKIP could harness 20% of the vote in a Westminster election over say the 450 or so English seats then statistically they would be certain to have at least 20 MPs. People will vote for a solid decent politician who articulates their worries and concerns . They will not vote for Nigel Farage with his spiv like image and unsavoury associates.

These days I prefer to write on the Euro problems which I think can bring down the EU grand plan. Today the EU 'crats are deciding how to react to the True Finns. Tomorrow is another day as Scarlett O'Hara used to say. Let us hope it brings another EU cock up.

Monday, 18 April 2011

Spanish bond default probabilities increase as Greece disintegrates

Last Monday the 10 year Spanish bond interest rate spread to Bunds was 1.78%. This morning its 2.10%, an increase of 32 basis points in one week! That is a huge increase in a very short time by bond market standards of the probability of a Spanish default. Spain is going the same way as Greece, current spread to Bunds 10.68% and Portugal, current spread to Bunds 5.86%. It is a recurring pattern.

Greek problems have been pushed out of the headlines by Libya. There is a strongly opposed land fill site development near Athens where the Greek police have been attacked with petrol bombs to the extent that they have withdrawn from the site. There has also been a refusal to pay tolls for a road improvement programme. Civil unrest and protests against the Greek austerity package has now spread to the smaller towns and countryside. I don't think the Greek government can last. Any hint of German involvement and we will be in a 1941 war situation.

Ireland's bond spreads are now 6.23% to bunds slightly above Portuguese levels. Moody has just cut the rating on long term deposits with the two big Irish banks so all Irish bank debt is classified as junk. Ireland wants to renegotiate their bail out interest rate terms but again they run into the German problem. Dr Frau Merkel wants the Irish to increase their corporation tax rate of 12% to stop companies re-locating their accounting centres to Ireland in a tax regime arbitrage operation. The Paddies don't like being told what to do by the Germans any more than they like Brit rule. Worse for Brit banks is that they hold a lot of Irish debt with £50 bn rumoured as RBS exposure.

Meanwhile the Portuguese saga staggers on paralysed by the coming Portuguese elections. All in all the markets are certain of a imminent Greek default and expect a Portuguese and Irish default within the year if nothing else changes. The most brain dead comment I heard on the BBC this morning was that Eurozone defaults could be managed if the banks were given time to rebuild their balance sheets. The Greek rioters, Portuguese electors and Irish politicians are not in a patient mood so there better be a plan B!

The other good news this morning was from Finland where the true Finn, anti-Euro party won 19% of the vote. Finland is in the Eurozone. Any Portuguese bail out requires unanimous agreement by all its members so if the Finns say No then what happens. The Euro is starting to sink. That's good news for us Kippers.

Friday, 15 April 2011

Greek default is on its way.

I can do no better than quote from today's latest Reuters report,

"European policymakers scrambled to reassure investors that a restructuring for Greece was not on the agenda, saying such a step could have dire consequences for European banks and the fragile economy of the 17-nation euro zone.

The Greek government also ruled out a restructuring, vowing to deliver on the ambitious fiscal goals set out for it by the EU and International Monetary Fund last year in exchange for a 110 billion euro ($160 billion) rescue.

Efforts to quell fears came after German Finance Minister Wolfgang Schaeuble became the first senior euro zone official to acknowledge publicly that restructuring may be a possibility.

French Finance Minister Christine Lagarde said no talks about restructuring Greece's debt were under way and that Athens was working hard to get its fiscal house in order."

I doubt even the immaculate Madame Lagarde can save the Greek's moussaka this time.

A Reuters poll on Thursday showed analysts believe there is a 60 percent chance Greece will have to restructure its debt in the coming years. They put the chances for Ireland at 40 percent and Portugal at 30 percent. That's the way the professionals are betting.

Still its a ill wind as they say and I am personally very pleased to see Sterling strengthen against the Euro as a result of these shenanigans.

Re Spain Reuter says Spanish bond yields are holding steady. I am not so sure about that but as I don't have a Bloomberg terminal I can't contradict it. On FT figures the Spain to Bund spread has blown out by 12 basis points in the last week which indicates some cold feet.

Re Biggles Farage I concur with the perceived wisdom and the reported comments of the judge that the pilot really needs psychiatric help more than a trial.

Just as it has always been unwise to lend money to Greece so I have always felt it is unwise to become closely involved with Nigel Farage. I was in truth relieved to be kicked off the NEC by his sycophants and thus no longer tied to rubber stamping decisions made by Nigel Farage and his private political committee. No factual evidence, minutes etc were ever produced to me to support these decisions a practice I found unacceptable.

Thursday, 14 April 2011

Farage Pilot update & Dodgy Banks

Mr Farage's evidence was widely reported in the national dailies on Tuesday but I could find no further reference in my wife's DT yesterday or today. The latest reports seem to be on the Oxford Mail web site, click on links below to read.

Oxford Mail Thursday

Oxford Mail Wednesday

Oxford Mail Tuesday

I make no comment on the case as it is sub judice.

I well recollect Del Young when on the NEC receiving death threats some years ago which seemed not to have been investigated by Plod as rigorously as it might have been.

Turning now to my post yesterday on the fragile state of German & French bank balance sheets a propos possible bond defaults by the PIGS, today's DT business reports Deutsche restructuring their US operations to minimise their regulatory capital requirements under the new Dodd-Frank bank regulations. Without this they would have needed to raise about $20 bn extra capital. Last October they raised €10.2 bn extra capital.

I am sure Dr Frau Merkel has been made aware of Deutsche's situation which of course will have no bearing on her EU PIG relief policy.

It was also interesting to read in the DT Jamie Dimon, CEO of JP Morgan urging US bank regulators to do "what's good for the US, not what's good for Europe" ie do not try to match EU and Swiss capital requirements. Would that UK regulators would do what is best for the UK banks and let the Eurozone sort out its own problems.

Wednesday, 13 April 2011

The real reason for the EU bail outs

As in many walks of life things are often not as they are spun by our political class but the diametric opposite. Thus it is with the EU bail outs of the PIGS spun as EU concern for the people of these benighted countries. Well not exactly. Who would be the biggest losers if a PIG defaulted or put it another way who lent the PIGS all this dosh in the first place to secure the juicy interest rates on offer?

The answer is French and German banks. A PIG default would generate a Franco Prussian banking crisis of Anglo Saxon proportions. This would require a G Brown size government injection for these banks financed by Pierre and Fritz. Sarky and Merkel would have to eat huge amounts of Anglo Saxon humble pie with no garlic or sauerkraut to take away the nasty taste.

Hence what is spun as altruism is naked self interest. The sovereign bailout ban in the EU Lisbon treaty was simply ignored. Bankers, as in the UK, invokes the force majeure argument.

However if all else fails in Spain expect the forced conversion of bonds with some value to worthless bank equity as we endured in the UK except it won't be Sarky and Merkel who ends up with the worthless shares but those who lent to Spain ie the French and German banks. Are they worried well Yes but they know, with government help, they can hide these shares on their balance sheets at par value and their shareholders will be none the wiser. The only thing they will notice is the inevitable call for fresh capital to meet Frau Merkel's new hairshirt for bankers regulations. So its bad luck if you hold Franco Prussian bank equity and bad luck if you hold Spanish bonds! As Eddie George used to say Dodgy Bank, dreadful Bank etc.

Tuesday, 12 April 2011

Why Nigel wants AV for his cerebrally challenged fans

One of the most common tricks used by the Cabal is to wilfully misunderstand plain English and twist it to mean the opposite of what was intended. This has been going on on Butcher's forum with the man who calls himself Septic. Presumably his second name is Tank and he certainly lives up to his name along with his latest chum who calls himself GothMog or is he a sort of black cat?

There is a saying, be careful what you wish for, you might get it. This is what has happened to the Lib Dems. They have wanted a change to the fptp electoral system all my adult life and now they have it tantalisingly on offer, or is it? They have it at horrendous cost. They will suffer electoral meltdown at the local elections. Already their candidate numbers are down in the South West, their heartland. So they get what they wanted in part but rather than delivering them electoral success they will reap electoral failure.

The cat man thinks this is Nigel's cunning plan to replace the Lib Dems as the third party. Like all Faragistas he is living in cloud cuckoo land somewhere up Nigel's bum. Disillusioned Lib Dems will turn to the Greens who have much more in common with LibDems even beards and sandals. Some may go back to the Tories. They will never vote for Farage. He is anathema to everything Lib Dems stand for and it is of course an article of faith for Lib Dems that the EU is the best thing since sliced bread. Ian Paisley joining the Catholic church is more likely than Lib Dems voting for Farage.

They may even lose the AV referendum which would make them double losers. Even if they win the referendum vote can Cameron deliver Tory votes in the House of Commons? The rank and file Tories hate AV. A Tory rebellion precipitating an early election would give them a chance to wipe out the hated Lib Dems Clegg and all. Even if there was a subsequent Labour victory they don't want AV either. Why should they having just won an election under fptp? They have seen what being in coalition with the Lib Dems is like, a complete disaster.

A Labour victory would leave Labour to clear up their own mess and give the Tories a chance to elect a leader more to their taste. Cameron is not popular with real Tories. Bank crises take at least 10 years and average 15 years clean up. Plenty of time to get a new leader and win the subsequent election.

I trust this clarifies my views on Farage's support of AV.

Monday, 11 April 2011

Farages UKIP leadership failure highlighted in the SW Politics show

Click on this link and fast forward to 50 minutes in to hear Adrian Lee, Plymouth University election guru, laying bare UKIP's local election failure in their strongest region in the UK. Think what must be happening in the East Midlands where Clarke is MEP!

In the South West Labour has doubled its candidates, the Greens have more than doubled its candidates, the Tories are contesting for the first time more than 90% of the seats and are targeting the Lib Dems. Two parties are fielding less candidates than 2007, the coalition blighted LibDems and Yes, you've guessed, Farage's EUKIP! Both Farage and Clegg have gone native, Clegg in Westminster and Farage in Brussels and in so doing completely lost touch with their grass root activists who are deserting both parties in droves. Other than possibly Plymouth it looks like another nil return for UKIP!

I stood as a UKIP candidate in 2007 really annoying the local EU phile LibDems, one David Laws currently under investigation by Parliamentary officials over his expenses claim, and the local Tories. I would have stood again except my possible candidature was blocked by Farage telling the party machine he would block me standing for even the Parish Council. Is it any wonder UKIP now has fewer candidates with a leader who is more concerned with victimising UKIP activists than fighting local elections! Better to have a UKIP candidate standing and give people a chance to vote UKIP than no anti-EU candidate at all. Worse still is to promote and support electoral liabilities like Pearson and Monckton as they are 'Lords'. The belted Earl is also no asset.

Activists are the key to electoral success. Not just my opinion but that of the latest Farage protege Ms Jane Collins quoted in the Yorkshire Post after her less than stellar recent performance in the Scunthorpe by-election:

'ACTIVISTS on the ground are more important than vast sums of money, according to the biggest-spending UK Independence Party (UKip) candidate.

Jane Collins trailed in fourth in Scunthorpe with just 1,686 votes, despite spending £10,072 during the campaign – more than any of her rivals. Labour held the seat with 14,640 votes despite a strong challenge from the Conservatives, who polled 12,091.

“I decided I wanted to put some money into the campaign,” said Ms Collins. “It was a bit of an experiment to see how it affected the result in Scunthorpe. But because of the determination to keep the Conservatives out and the determination of the Conservatives to get in – they made very big inroads – my campaign made very little difference.

“You can spend what you like but if you don’t door knock and get in touch with the people and create enough of a rapport with them to get the ball rolling, you can spend what you like but it won’t make any difference.”

Labour’s Nic Dakin, who won the seat with a majority of more than 2,500, spent just £6,957.36 – less than half that of Ms Collins.'

I am grateful to Junius for publicising these facts especially as the photogenic Ms Collins, looking less attractive in her Independence News pic post Barnsley than her presumably much earlier publicity shot, but then she was sandwiched between Farage and Nuttall in Independence News pic which makes it difficult for a girl to look her best.

Ms Collins did do well in Barnsley because she was a local lass. Farage never learns that parachuting in outside candidates of dubious appeal like himself in Bucks never works.

This is a lesson the Greens have learned. They have local activists standing in huge numbers in the South West. It is not by chance that the Greens have an elected Westmister MP and all UKIP has to show is a series expensive Farage flops in Bromley, Bucks etc. The Greens are on the right strategy and will build up their electoral base in the UK. EUKIP will only build up its bar bills in Brussels

Saturday, 9 April 2011

The reckless bank at the Euro's heart

Eddie George used to tell a joke that there were four banks in Germany, Comical Bank, Hypothetical Bank, Dreadful Bank and Dodgy Bank. To Eddie's list we can now add Eccentric Bank aka the ECB headquartered in the red light district of Frankfurt which can only add to its attractions to certain MEPs.

Peter Oborne wrote a good piece in common sense language in Friday's DT on this topic. He quotes an well-placed minister on the likelihood of the Euro unravelling as saying "That's not going to happen. There is too much political will behind the Euro for them to let it go". Ho-hum, throughout history many politicians have said that when they know the exact opposite is true.

The current EU/ECB attitude that no European country shall default on its sovereign debt is a bit like Petain at Verdun, 'Ils ne paseront pas'. They did not pass but the cost was to so weaken his country, France, that 20 years later he headed up the Vichy regime for Corporal Hitler.

The real reason as Oborne states is that French and German banks hold huge quantities of PIGS' paper which in the event of a single default would have to be shown as worthless in their balance sheets necessitating a huge government babk bail out just like in the UK.

The problem is compounded by the ECB doing the same thing by buying outright huge quantities of this useless paper. Central Banks are supposed to supply liquidity ie short term money, by open market Repo operations where the ECB takes bonds for a short period as collateral against a loan to a commercial bank. When the loan falls due the transaction is reversed. The crucial difference from outright purchases is that the first credit call is against the repoing bank so if there is a sovereign default the ECB still gets repaid by the the borrowing bank.

JP Morgan has estimated the ECB has current losses of 40 bn€ on its Greek 'investment' alone. It faces similar losses on its dealings with Portugal and Spain. Its just the same as Lehmans, misleading accounts, lies and undisclosed losses.

So who will end up paying? Well you will dear UK citizen. Thanks to our brilliant governing class we are shareholders in the ECB (Why as we are not in the Eurozone?) and therefore have to make good its losses.

When I worked for the Bank of England I was certain a properly run central bank could never lose money. In fact, during the credit crisis, the UK taxpayer has made money out of BoE lending to Northern Rock etc at penal rates. Trichet at the ECB has shown that when you trash the rule book someone has to pay. It won't be Trichet for sure. He will walk just as he did after his little problem as head of Credit Lyonnais.

Friday, 8 April 2011

And then there was one

Green bottles on a wall or little PIGS with dodgy houses there is only Spain left to fall off the wall or have the big bad market wolf blow its hacienda down. There has been endless talk this morning supportive of Spain from the EU, well naturally, but also from apparently independent commentators like investment bank Goldman Sachs' chief European economist opining 'we think the contagion stops here'. Sounds like someone talking their book as they say in the City. I would like to know what Goldman's exposure is to Spanish debt to assess just how independent Mr Nielsen's opinion is.

'Market relaxed about Spanish banks' €100bn plus exposure to Portugal' is the headline on today's business DT piece by one Harry Wilson. Oh really! On top of something like €200bn plus bad debts on worthless Spanish property loans. Both these figures almost certainly underestimate the true size if the economic problem but the commentators are missing the big picture.

This crisis is political economics writ large. The Euro has always been a political project trying to defy economics. The denouement will be played out not in dealing rooms of banks but on the streets of Athens, Lisbon, Madrid and finally Brussels as austerity bites and unemployment rises. This will panic the markets who will rush for the door leaving only the ECB to try and plug a huge leakage of money from the Eurozone. The lender of last resort, the ECB, of course has no money of its own other than the worthless stuff it prints, and is dependent on its German paymaster for its international credit worthiness.

Politics again! Merkel is in severe electoral trouble. As I have pointed out the fault line in the EU is where it comes up against the interests of national politicians seeking re-election. To survive Merkel has to choose German national interests over what good old Biggles would have described as a bunch of dodgy d***s. Think of it as a Stalingrad moment and let us hope it leads to the last days of the EU Fourth Reich hierarchy in their Brussels bunker, bars and bordellos.

Thursday, 7 April 2011

When will Spain fall?

Spanish economic and monetary problems reside in their banking sector. Their government finances look OK to me, certainly better than the UK. Going forward this may not last as tax evasion is as popular as football in Spain. But the Spanish banks must have around 200bn€ of bad property loans on their books. The repossessed properties the banks hold as a result are very difficult to sell because of the problem of establishing proper title and dubious planning legality of many of these houses.

Ex-pats have been badly burned in Spain because of corruption in the planning system sanctioning many thousands of illegal houses. So ex-pats are largely out of the property market. With unemployment at 25% domestic demand is also in decline. There are so many small Spanish banks, cajas, that I doubt the Spanish Central bank has any accurate assessment of the scale of the problem.

Worse,the Eurocrats are prattling on about creditors must share the burden, debt restructuring which is Eurobabble for a debt default etc. The market wont be fooled for one second. They know a default when they see one. The Eurocrats like it as it is politically sellable, well in the short term anyway, and involves no loss of face or mea culpa for Barroso again in the short term. Its a typical short term politically expedient solution that will start to unravel the moment its announced!

Just look at it from a common sense personal view. Are you going to lend more money to someone who has just reneged on their previous debt to you? Its as simple as that. When the first default is announced in the public or private sector of PIG land funds will dry up for banks and governments. The ECB will then be the lender of last resort. Euro money supply will rocket and with it inflation. Add that to increasing unemployment and its to the barricades comrades and lets lynch a few politicians en route.

Oh to be in Euroland now that Spring is there.

Wednesday, 6 April 2011

Not even Portuguese banks now want Portuguese government paper

The end draws nigh for Portugal just in time for the tourist season. No government, the country in electoral limbo, who can blame their banks? The way the system worked before was the Portuguese banks bought Portuguese sovereign debt as nobody else wanted it. They took it to the ECB who gave them Euros up to say 97% of the face value of the bonds. The Portuguese banks then 'lent' these Euros to the government to pay their payroll mainly.

So a lot of unpaid Portuguese and a downturn in tourism equals street protests and unpopular politicians. Barroso better stay in Brussels where he is safe from his own countrymen!

Tuesday, 5 April 2011

Why Nigel supports AV

To understand Farage's actions you just have to ask one simple question. What's in it for Nigel? AV will ensure a built in Europhile majority in the Commons in perpetuity. That's one of the reasons the LibDems want AV above all things. AV will dish the Eurorealist movement forever. Farage knows this so why does he support AV?

Simples! Farage does not want to get the UK out of the EU. Why should he want to damage an organisation that has provided him with a very lucrative living for many years and also gratified his insatiable desire for personal publicity and aggrandisement? Nigel thinks AV gives him his best chance of getting his bum on the green leather and in that he is correct. That it also consigns UKIP to the trash can of Brussel's history matters not one whit to Mr Farage so long as the TV producers keep calling their favourite Uncle Tom Eurosceptic to appear on their boring programmes.

So what stands in the way of this wizard scheme. Well, not a lot except Dave's increasingly unhappy troops on the Westminster front. They can see AV will also consign them to perpetual opposition. Worse the Cleggon is to announce a plan for a 90% elected Lords so no room for as many bums there then. That's bad news for the would be Lord Farage of Brussels.

I smell a Tory revolt and an early election if there is a Yes vote to AV. That will finish the LibDems for a generation and leave us Eurosceptics some hope. Let us hope 2011 is the year of the revolutions here as well as in Araby

Monday, 4 April 2011

Sarkozy wants HSBC in Paris with M&S

'Paris attempts to prise HSBC from London' reads today's headline in the DT business section. As I have opined for years this was always the French game following the location of the EU Securities and Markets Authority in Paris. HSBC sovereign bond trading is already headquartered in Paris, a city where one Samar Assaf, HSBC's new head of Investment Banking has spent much of his working career.

I doubt it will happen. HSBC is unhappy with wee George's ill conceived ideas on bank regulation and are just reminding Cameron what could happen if he does not rein in his none too bright Chancellor. If HSBC were moving headquarters in Europe Geneva in Switzerland would be a much more rational choice with its stable business and political environment. But given most of HSBC's profit comes from the Far East and the 'S' stands for Shanghai then China or Hong Kong, the 'H' in HSBC, would be again a more rational choice than Paris where l'etat c'est moi rules under le petit Napoleon and his Josephine.

Having shut down and sold up in Paris 10 years ago I now read that M&S are to open in Paris. So what's different this time? Ladies knickers are still the same as are M&S sarnies. As it says in the Bible as a dog returneth to his vomit so a fool returns to his folly. M&S are a SELL in my book.

Saturday, 2 April 2011

Euro staggers on

The Europhile BBC economists panel opined this week that Greece will default on its debts. Ireland has to find another £20 bn to bail out its banks. Portugal will soon be forced to take the EU support package at penal rates of interest and these three little pigs will sink further into the mire.

I don't post much these days because the EU is in its bunker mode and living in fantasy land sustained by its lick spittle supporters like Cameron. Rules are being ignored or re-written but that is the EU way. The UK is not looking in great shape either but the Euro's fate will be determined on the streets of the big Spanish cities. Spain like Libya is a divided country, Castille, Catalonia, Basque lands and Andalucia. With unemployment approaching 25% and youth unemployment twice that conditions are ripe for street protest. Also, the Spanish banks are hiding 100bn Euro + of property loan defaults on their balance sheets that will eventually out and trash Spain's ability to borrow on international money markets.

Back in the UK this AV referendum is a nightmare for boy Dave. As Portaloo remarked last night politicians love the trappings of power, private jets, limos etc. Ask Nigel Farage! If it is won by the pro AV lobby I opine the Tory MPs will rebel as an AV system will ensure a perpetual Lib Lab government. Turkeys don't vote for Xmas. Better to bring down the government, force an election which Millipede will easily win and in which the lying Lib Dems will be wiped out.