Thursday, 28 July 2011

UKIP's Janus

I copy below an email that ended up by mistake in my in box. The originating address was :;

I kept an open mind for a long time moving from moderately opposed to moderately in favour on the basis of the arguments in Independence News and the one hustings I attended.
Leaving to one side the personalities, with generally loyalists in favour and historical trouble makers on the other side, I found the case in favour better argued, not to say a lot less hysterical. Also the pro side is not threatening resignation as some of the others are doing.
More recently I have been taking note of what is happening on the Continent and am becoming convinced that there is a bigger game afoot over there and we have to help it. The sheer hubris of the Eurocrats is such that they may be underestimating the possibility of an official international opposition which Nigel is well qualified to lead.
That now finally puts me firmly into the yes camp.
Feel free to quote as you wish.

Guess who is Malcolm? Dead right Malcolm Wood, W Legge's minder and employee presumably paid on EU funds so hardly an objective opinion. Malcolm Wood is also a long time crony and supporter of N Farage so despite his pretence he is not entirely unbiased in these matters. 
Nor was he unbiased when SW RO and prior to the SW MEP selection votes was helping organise meetings at the larger SW branches for the belted Earl to speak at. There were 9 other candidates on the SW slate but I know of none other than the son of Raine, grandson of the pink vision Barbara Cartland, invited to speak at these intimate soirees. And just look where our esteemed former SW RO  Mr Wood now earns a crust to cushion his retirement
For the extra bonus point you have to guess who is Dear John and post the answer on my blog.

Wednesday, 27 July 2011

Don't cry for me Argentina

In 2001 Argentina defaulted and exited its peso from its one to one convertibility peg to the US dollar that had lasted for the previous10 years. What happened? Well since 2001 there has been 10 years of sustained economic growth in Argentina and last year growth hit 9.2%. .

 Was there any difference between Argentina and Greece? Some said  that because Argentina's crisis was preceded by a decade of free-market reforms, and followed by a huge surge in world commodity prices benefiting its farm exports, it would be unwise for Greece to try to take the same path or would it?.

The similarities were not lost on Athens protesters last month when parliament voted through more cuts. They floated a balloon asking: "Yesterday, Argentina; Today, Greece; Tomorrow?" In both countries the populace wanted rid of their parasitic political class and took to the streets to do so.

The difference was Argentina was on its own. There was no danger of their contagion spreading to the US economy. They defaulted, their bond holders sued capital fled the country and what then happened? The most interesting thing was the rise of democratic worker's cooperatives to take over shut down hotels, factories and even airlines. As Wikepedia says, " During the economic collapse, many business owners and foreign investors drew all of their money out of the Argentine economy and sent it overseas. As a result, many small and medium enterprises closed due to lack of capital, thereby exacerbating unemployment. Many workers at these enterprises, faced with a sudden loss of employment and no source of income, decided to reopen businesses on their own, without the presence of the owners and their capital, as self-managed cooperatives."

And it worked! Is this what the EU is really afraid of. Democratic worker power removing the need for Eurocrats and the political class? Its worth a thought.

Wednesday, 20 July 2011

EUKIP made flesh

I received today my copy of Independence news. It also contained two slips of paper and an envelope relating to Farage's financially motivated wish to join UKIP MEPs to a Pan European, EU supporting party. Farage  wants UKIP to take the EU bribe and sell out our core principle of EU withdrawal so that he can have a bigger budget solely under his control to spend in Brussels. This money cannot be used to support our withdrawal cause in any way and opens the door for Pan European parties to contest the next UK European election. I fully expect Farage will be standing for a Pan European party.  He may be prepared to sacrifice his principles for money but I, and I hope many other UKIP members, will never take the EU's poisoned Euro.

While on the NEC Del, David and I fought long and hard for UKIP elections to be conducted independently by the Electoral Reform Society to maintain the probity and integrity of UKIP elections. This has now been ditched. Both slips of paper say, "Should the UK Independence party MEPs join a European Political Party and a European Political Foundation under regulation EC 2004/2003". This wonderful piece of EU gobbledegook shows how far Farage and his cronies have embraced and support the EU!

One slip has YES on it and one slip NO. They are called ballot papers which must be returned to an address,  UKIP Ballot, 11 Church Street, Hartlepool, TS24 7DJ.  That is not UKIP's head office. It seems to be the address of the firm Atkinson Print Ltd who printed the ballot papers. What on earth is going on? No mention of checks or scrutiny of the electoral process, or returning officer. In short a system wide open to abuse and manipulation . No wonder UKIP is fast becoming a laughing stock.

This image is furthered by some real vote losing articles printed in Independence News. One exhorts UKIP to support Israel and is written by one Jacob Campbell, Press Officer, UKIP Friends of Israel. What can UKIP gain from this association given the largely justified bad publicity Israel gets in the media and the  BBC?

Then we have the batty Earl opining on the EU threat to OUR herbal pills and potions. This all seems to have originated from the Earl's grandmother Barbara Cartland. Wow! He then describes properly licensed drugs as a 'big killer' and follows with the sentence, "Over 40000 deaths are recorded in the UK alone". What on earth does that mean? Another vote loser

Our MEPs  certainly do their best to live up to Cast Iron Dave's fruit cakes and loonies description of UKIP. They should stick to pissing on Brussels hotel plants  and not pissing on UKIP. Still there is always Monckton being warned off pretending to be a member of the House of Lords to restore sanity to our party.

Tuesday, 19 July 2011

Merkel shows who is boss

If there were any doubts our mid-European friends  must now realise they are living in the Fourth Reich. Dr Frau Merkel calls the shots. She will not agree to anything that damages the Fatherland. Its as simple as that as N Farage likes to say. Nothing doing on the money markets other than Spain had to shell out  an extra 1% today for one year money.

I was vastly amused by the Steve  Allison report on Junius on the total irrelevance of UKIP's NEC. It was ever thus!  Until they get rid of Farage and his cabal nothing will change. Pip pip.

Monday, 18 July 2011

Eurozone crisis deepens - no way out

Today's piece by AEP in the DT is headlined, "An orderly break up of EMU is the wise way out of the eurozone crisis". His thesis is split the Eurozone in two with Club Med etc keeping the ECB and a currency called the Euro which would instantly sink on the Forex market to its correct level and the hard core Germany plus I guess Austria and Holland would have a new currency which would be like the Swiss Franc. Can I suggest it is called the Reichsmark. It would certainly rival the Swissie as a safe hard currency.

The plus point is the PIGS would be able to repay their Euro denominated loans in devalued Euros. Great for them but not so good for those banks in the new Reich who still hold a lot of PIGS paper. The other negative from Dr Frau Merkel's view point is German industry would be saddled with an appreciating currency raising the price of their exports. The German's did very well out of an undervalued currency after the war up to 1980. The soft Euro has been a godsend to them. Merkel would like to keep it that way at least until after her re-election.

Things today worsened on the bond markets so I update my 10 year PIIGS' bond yield table with as always the spread to bunds in brackets:

              8th July                11th July             15th July             18th July

Greece  17.04% (14.20) 17.19% (14.52)  17.71% (15.02) 18.23% (15.57)

Ireland   13.13% (10.29) 13.62% (10.96)  14.27% (11.58) 14.45% (11.79)

Portugal 13.05% (10.21) 13.28% (10.61)  12.93% (10.24) 12.84% (10.18)

Spain         5.69% (2.85)      6.08% (3.41)     6.07% (3.38)     6.32% (3.67)

Italy           5.28% (2.45)      5.72% (3.05)      5.77% (3.09)    5.99% (3.34)

Not a pretty picture when the squabbling mid Europeans Finance ministers meet on Thursday. Looks like Greek bonds could soon be at 20%! The only currency the Euro is holding up against is, yes, Sterling. Bad news for those UK MPs planning a holiday in Euroland but of no consequence for our wealthy MEPs who are of course paid in Euros.

Sunday, 17 July 2011

Bank Stress test adequacy questioned

I hesitated to opine on the rigour of bank stress whose results were announced on Friday as I no longer have access to Bloomberg and other financial news feeds Reading the business section of today's Sunday Telegraph confirms my misgivings about these much touted tests.

'EBA wanted tougher tests' is the page 2 headline. I quote, 'The European Banking Authority has attempted to quell City complaints over Friday's widely criticised industry stress tests telling analysts they would have liked to have made them harsher but were unable to do so', my italics. The EBA said they had faced great difficulties  getting different national regulators and banks to provide adequate data. They have my sympathy. I have been there and I have the tee shirt and scars to show for my visit.

As the ST says,' Tomorrow is the first chance for investors to give their view on the tests. Many are expecting a volatile trading session as markets assess the findings'. Indeed. Watch the PIIGS bond spreads, the Euro exchange rate and Eurozone bank share prices to get the market's view.

Another ST headline is 'Germany says Greek debt hit "unavoidable" '. It is strange how they cannot bring  themselves to use the truthful phrase, Greek default.  There is to be yet another European leaders meeting on Thursday for another emergency summit on Greece. I predict this meeting, like all their previous meetings on this topic, will produce much hot air and fine words but no action. Quite simply the EU is in denial on this issue and until they face the reality which I hope the markets will soon force upon them nothing will happen.

Banks have to raise huge amounts of capital on their 'name' in bond, commercial paper and short term money markets. Would you want to lend money to a Spanish or Italian bank?

Even our allegedly brilliant House of Lords, stuffed with all the retired  human expertise and excrement we can muster, is to mount an attack on the credit rating agencies for doing their job on sovereign bonds. Its called shooting the messenger and is an old British tradition.

There are another two pieces in the today's ST on differing aspects of the same topic. Our ruling political class however remains obsessed with phone hacking and press regulation, It is police corruption and regulation they should be concerned with on the home front but even that pales into insignificance besides what will happen in the money markets next week. As a US Treasury secretary once pointed out the bond market is the most powerful force on Earth!

Friday, 15 July 2011

Eurozone PIIGS 10 year bond spreads widen again

Bond markets are entirely rational. They form a major component of every MPC presentation and decision.I therefore look at the developments since the start of the week and give the relevant figures below.

                  Friday 8th July         Monday 11th July    Friday 15th July

Greece     17.04%  (14.20)       17.19%  (14.52)      17.71% (15.02)
Ireland      13.13% (10.29)        13.62% (10.96)       14.27% (11.58)
Portugal   13.05% (10.21)        13.28% (10.61)       12.93% (10.24)
Spain          5.69% (2.85)            6.08% (3.41)            6.07% (3.38)
Italy           5.28% (2.45)             5.72% (3.05)            5.77% (3.09)

So little change since Monday apart from Greece.

The much awaited results of the stress tests on European including British Bank balance sheets were published today. Nine banks failed the test, 2 Greek, 5Spanish 1 Austrian and 1 German. In addition 12 further banks came close to failing, 7 Spanish, 2 Greek, 2 Portuguese and 1 Cypriot. I find it puzzling no Italian bank was found wanting. Why? Well when I once contacted the Banca d'Italia to find out how many Italian banks they were they admitted they had no definitive answer and the last time they had mounted a count they had given up at 1000. I simply do not believe these figures in respect of Italy and I suspect the figures for Spain are an underestimate. The Greek figures are damning and indicate Greek bond rates will continue to go up and up.

Thursday, 14 July 2011

Eurozone chaos continues

The IMF head of mission, Ajai Chopra, to Euro troubled Eire made me laugh. He berated the EU saying in the context of Eire the EU needed to "provide consistent, cohesive and co-operative policies". He then went on to say "What we need and  what is lacking so far is a European solution to a European problem.!"

When I was involved in the early 80s in applying for academic grants from the EU that is exactly the phrase the EU used ad nauseam to justify not adopting already existing US technology and standards. We do not want US systems they cried. We want European solutions to European problems. A pity they do not heed their own advice. Also they now seem delighted to have the IMF, a US based Anglo Saxon invention solve their EU created half baked European problems. 

Instead the EU continues inventing fancy phrases at which they excel to avoid using the unpleasant but truthful words, Greek default. All the talk of private sector involvement, reprofiling debt etc  simply means a default in the eyes of the investors and credit rating agencies.

"The principle of having a Euro chiefs' meeting is accepted by the main players, including Germany," said one EU diplomat, adding that it was likely to happen next week despite earlier signals from Berlin that there was no rush to finalize a second package of aid.reports Reuters today. Well the EU is certainly never short of fine words and hot air but as the Emperor Augustus used to say before Jesus was even born, 'Fine words butter no parsnips'. They don't even butter up the Germans who are getting angrier and angrier over this mess. They may even be wishing they had never joined.

Wednesday, 13 July 2011

UKIP's Tweedledum and Tweedledee

I have often been struck by the uncanny similarity of Bannerman and Dartmouth. Physically they look very much alike, well fleshed I should say. Their views or should I say non-views are similar and one hears the same scurrilous Tory rumours about both. Dartmouth's mummy is the celebrated acid Raine as named by Diana Spencer. Nobody seems to know what claim Bannerman has to the name Campbell Bannerman.and what connection he has to the Liberal prime minister of that name. Mr Bannerman seems strangely reluctant to clarify this detail.

Both failed to make it in the Tory party defined as being selected for a safe Tory seat and both drained into UKIP via the plug hole in the Tory sink. Both sucked up to the great leader in the true Tory tradition and were rewarded with his patronage and a high place on UKIP's MEP slates and after their election both have taken to the EU like a duck to water endorsing their flexible political credentials  Bannerman by rejoining the Tory party and the other by his slavish support of Mr Farage's new earner, the Pan European UKIP party.

They encapsulate how UKIP is dominated by closet Torys eager to emerge from the closet and enjoy the munificence of the old Etonian Tory Sun King ,cast iron Dave, who might have been one's fag at Eton. Until UKIP rids itself of these people it will as Mr Bannerman observed not be a political party but a  Tory pressure group. Elections are won in the middle ground of British politics not on the playing fields of Eton.

To win on this ground UKIP needs to rid itself of its right wing buffers image and detoxify or should I say deFarage its brand into something the great mass of the UK electorate can identify with and vote for. That is not a load of Young Independence wannabee on the EU gravy train youf but people who have held real jobs with real responsibility to make something work who will put their country's interests first and last and who will work in the UK to achieve this goal. I was struck by something Greg Beaman said about Sinn Fein who refused to take up their parliamentary seats. Where are these people now? Well they are in government and where is Farage's Brussels based UKIP to be found ? In the bars  of Brussels where they will stay until they are eventually kicked out by a weary electorate recognising them for the freeloaders that they are.

Tuesday, 12 July 2011

Credibility crunch prompts debate on BoE mandate

Thus reads the headline on a Reuter's piece today instigated in the House of Lords by
Michael Spicer who challenged the government over the BoE's persistent inability to meet its inflation target. One of the original outside members of the  MPC, Willem Buiter, who was on the MPC when I worked at the BoE  and was in my opinion easily the best economist on that committee is quoted as below by Reuters.

"There has been a definite loss of credibility,"

Buiter said the BoE's rate-setting policy seemed to be more focused on supporting growth and the government's deficit reduction policy than its stated inflation target.

"The Bank...have overstepped the mark and acted in a very political way," he told Reuters.

He was very sympathetic to the BoE's wish to help growth, but said that by keeping rates low while claiming that it was still focused on reducing inflation, the BoE had damaged its credibility and was jeopardising its independence from politics.

"Rules matter and you can't opportunistically deviate from it whenever it suits you," he said. "There is a political mandate for the price stability objective. Any other objectives, even if MPC members personally consider them to be more important, have to be secondary."

He added that if he were still on the MPC and focused on returning inflation to its target, he would have voted for multiple rate rises by now.

"If I did not agree with the inflation target, I would have asked the Chancellor to revise the objectives, or I ought to have resigned. I think those are the only correct courses of action."

I can only support wholeheartedly Buiter's comments. When I was at the bank during the first MPC era I was a bit sickened by the amount of self congratulation and credit taking for 'controlling' inflation' that went on in the higher echelons of the BoE with the notable exception of Eddie George whose views when asked about this was to largely ascribe the control of inflation to benign external economic factors rather than BoE skill. That was only plain common sense something that is now noticeably lacking on the current MPC which is fixated on its pretty hopeless inflation forecasting model.

I write this as there is a great deal of schadenfreude about the current Eurozone mess and self congratulation about our wonderful foresight to not join the Euro. Absolute rubbish! The decision by Brown not to join in 97 was made on pure selfish political grounds to retain his powerbase in HMT. as was the decision to set up the MPC. Brown did not want to be labelled as responsible for raising interest rates. But just as with Gordon's gold sales things did not go the way Gordon thought they would!

The truth is the UK is in almost as big an economic mess as Greece and Portugal. When the markets have gorged on these two corpses and they are looking for more dead meat I fear they will turn their scrutiny to the UK. It has been a profitable feeding ground for them before on 16th Sept 1992 when George Soros made £2bn shorting sterling.

I expect an old fashioned  Sterling crisis this autumn.

Monday, 11 July 2011

Eurozone meltdown imminent

On Friday I pointed out the rise in the PIIGS 10 year bond rates showing contagion was spreading to Spain and Italy. I copy Friday's cob rates I posted below plus today's Monday 11th July rates. Bund spreads are in brackets showing how much more expensive the PIIGS rates are compared to Germany:

                  Friday 8th July         Monday 11th July

Greece     17.04%  (14.20)       17.19%  (14.52)
Ireland      13.13% (10.29)        13.62% (10.96)
Portugal   13.05% (10.21)        13.28% (10.61) 
Spain          5.69% (2.85)            6.08% (3.41)
Italy           5.28% (2.45)             5.72% (3.05)

 Now all the PIIGS rates have risen substantially today  but note how Frankie Dettori on Italy is making a late run on the rails with a 44 basis point move! This means that both Spain and Italy are paying more than twice as much as the Germans for their funding. Bad news as they both have a lot of serious funding coming up in the next quarter and Italy is the third biggest economy in the Eurozone and Spain the fourth biggest.

Its crunch time for Dr Frau Merkel. She has two choices. Let Greece default and accept Portugal will soon follow with an increasing possibility of Spain and Italy following and admit the great Euro project in its current EU wide incarnation is dead. Or, underwrite the Greek debt and commit the German taxpayers to pay for these profligate Club Med countries indefinitely. Greece they can fund plus Portugal as well but not Spain and Italy.

Its all looking a bit Wagnerian, Gotterdamerung!. It needs some pure Eurozone youth to emerge from the forest and save the EU. Its a pity Gordon the Brown engine is not available and DSK is still in the dog house. There is never a super hero around when you need one as Ronnie Regan used to say.

The good news for the Krauts is their rates are falling in absolute terms which makes it even easier for them to win Bombardier type contracts with the help of cast iron Dave..

Sunday, 10 July 2011

The Euro, UK Overseas Aid and the NHS

All three of these are the great project of politicians and exhibit the same defining characteristic of chucking money away and getting no return other than enabling politicians to boast how much they are doing ie how much of our money they are wasting.

All three of these areas are corrupt so the money poured goes into the pockets of the fat cats in Greece and the other PIGS, corrupt third world regimes and health service fat cats principally GPs and management  Money spent in all three of these areas has been and will be wasted. All three need  root and branch reform but all are political sacred cows so can never be reformed by the political class..

The Euro is the great project of the EU. It defines the EU a nation. It must succeed at all costs and it will certainly cost more and more until one day the money runs out. At the end of this process there will be some very wealthy fat cats in the PIIGS and the problems of the great mass of the PIGS people, no jobs etc, will be exactly as before.

The UK aid budget doubling is a cynical attempt by Cast Iron Dave to detoxify the Tory brand so he and his public school chums can win the next election by persuading the electorate that Tories are caring people. Its going to cost the UK £10 bn most of which will end up with ruling third world despots. Does Dave care? No, as long as he can point to a rising foreign aid budget that is sufficient. The UK electorate has no way of finding out where the money goes and what it buys and Dave is certainly not oing to tell them.

It has been the same with the NHS and Labour. Money has been poured in since 1997 and has achieved very little other than create some very wealthy GPs who now do less work than they did 10 years ago and an army of wealthy health service managers.

All three projects are impossible to challenge as they define the EU, Tory and Labour political class. The problem is no attempt is ever made to measure the outputs of these projects. How has the Euro benefited the PIGS's proles? How much has overseas aid raised the living standards of the poor in the third world? How much has UK heath improved relative to other developed countries?

Politicians do not want these questions answered. For them success is spending more and more of our money. End of story.

Friday, 8 July 2011

Brittania no longer rules the waves but Trichet waives the rules

So it does not matter that Portuguese and Greek bonds are now junk, Trichet has waived the ECB rules and made these bonds eligible as collateral to give these two bankrupts yet more Euros. The Italian finance minister is now in political trouble. A pity as he was trusted by the markets.

The effect of these shenanigans immediately impacted on these countries 10 year bond rates which have all hit all time record highs along with Spain. I give the bund spread below in brackets.

Greece 17.04% (14.20)
Ireland 13.13%(10.29)
Portugal 13.05%(10.21)
Spain  5.69%(2.85)
Italy 5.28%(2.45)

All the little PIIGS are comong home to roost.

Wednesday, 6 July 2011

Portugal next to go says Moody's

Moody's on Tuesday became the first rating agency to cut Portugal below investment grade. The 10-year Portuguese government bond yield  leapt more than 1 percentage point to a new high. Slow growth and  administrative problems were cited as the reasons why the deficit will not shrink as demanded by the bail out plan. Just as in Greece the indigenous tax avoidance culture will ensure the deficit continues to grow.

In Greece the demand from the Germans to run an East Germany type takeover is causing deep resentment. Greeks well remember the German occupation of Greece in WW II. They don't want another dose of German rule at any price. The government will fall on this issue.

Meanwhile back in the UK in a Newsnight interview with Paxo the useless UK Transport minister Hammond admitted that if he awarded the train building contract to Bombardier the EU would step in to stop him signing the contract. Nice to have EU power in the UK  so brazenly admitted but it opens up the question why do we bother with UK ministers at all?

Tuesday, 5 July 2011

The UK's leaders are destroying our countries faith in itself

It was depressing to hear the lame excuses advanced for not awarding the London Cross Link train construction contract to Bombardier, a Canadian company that employs thousands of skilled British workers in Derby. P Hammond, millionaire and transport minister trotted out the usual excuse, it was the last government that set the rules for awarding this contract so there is nothing I can do, not that Mr Hammond needs an excuse to do nothing that is his normal operating mode.

Bombardier said it all this morning. "It could not have happened in France or Germany where large public contracts are awarded to companies with manufacturing facilities in these countries. Who was it said British jobs for British workers?  Both G Brown and IDS said it! Obviously a comment not meant to be taken seriously.

Contrast this with the behaviour of the ECB following S&P categorisation of Greek bonds as in default following the latest Franco Prussian CDO 'solution'. Central bank rules debars defaulted Greek collateral being used in ECB repo refinacing operations for Eurozone banks. So what did JC Trichet do Mr Hammond? He simply changed the rules to say the ECB will use the best credit rating for Greek bonds they can find. So if S&P, Moody's or Fitch Lovell are giving the wrong answer I have no doubt the lately established Merkel Sarky agency will give a suitable one so French and German banks can continue to refinance themselves using Greek paper. Those banks have done very well out of usury in Greece and intend to go on doing so.

I read Richard North's blog with some interest yesterday on the great state visit to Canada, click on link to read it for yourself. Richard was writing on the picture the BBC tried to show as little as possible of protesters in Quebec carrying a banner saying, 'Royal Parasites go Home'. I reproduce Richard's comments below:

"What you will see circulating amongst a sub-set of the eurosceptic fraternity, however, is a series of impassioned pleas to "her majesty", couched in diverse terms of asking her to save us from the machinations of our venal politicians, and rescue us from the encroachments of the European Union.

Not once throughout her reign, however, has the queen stepped in to reduce or modify in any way the instruments which have ceded greater power to the construct in Brussels. Yet these have effectively neutered her role as head of state, by transferring authority to a new supreme government.

Now, since we have a sovereign who is no longer sovereign in her own land, one might perhaps stop to reflect whether the banner-holders in Quebec are more accurate than we would care to admit. If the queen no longer fulfils her role as head of state, defender of the sovereignty of the United Kingdom, what is royalty for?"

I remember being booed for saying the roughly same thing in response to roughly the question at a UKIP meeting from one who believes in our all powerful Queen. On a wet day in a hotel I found the Andrew Morton book on Diana, 'Her Story', on the bookshelf and for want of anything better I glanced through it. One chapter mentioned how once at tea a Royal shooting party at Sandringham Diana tried to raise the topic of UK sovereignty and what was the Queen's position vis a vis the EU president in head of state terms. It obviously went down like a lead balloon with the Queen, Betty von Battenburg is I suppose her EU name, and she  switched the topic of conversation immediately to who shot the last bird of the day!

Richard poses the question, 'What is royalty for' The answers in the comments section are illuminating. You can read them on the link I posted above but the comment below gives a flavour of these comments:

 Post subject: Re: What is royalty for?
PostPosted: Mon Jul 04, 2011 2:24 pm 

Our sovereign Queen has reneged on her Coronation oath in allowing a foreign potentate power to pass legislation in this land directly affecting the people. Was she made an offer she could not refuse - or is she 'master' of all. Either way, the people have been dismissed as unimportant enough to be considered. Our head of state is seen through nostalgic eyes by the majority, but as a traitor by an increasing number, and there is nothing the people can, or will do about it - nothing effective that is, bar call upon the empowerment of Magna Carta and the Constitution through the Barons. And what then? A subservient land to the EU, or a renegade to be attacked? And with what do we defend ourselves?

Richard is a historian and today he returns to the Royal spin machine, long before Tony Blair was even born, and how it worked during the war to keep the masses happy. I recommend reading it. It is as relevant today as it was in the war years. Of course spin used to portray the Royals as demi gods but that is a mere bagatelle compared to the political masters it now serves. Richard answers his own question better than me.

' "What is royalty for?" Well, part of the answer was evident way back in 1940. Then as now, they are part of the propaganda machine that keeps the proles happy and under control.

Just don't run away with the idea that "them up there" have any concern at all for your well being. What matters with any policy is "... to keep people quiet, to give them confidence in the measures taken ...". Nothing ever changes.'

One thing the Queen felt very deeply recently was the defeat of her horse Carlton House in the Derby. A huge disappointment to her and her many adorers. Well what do you expect her to do? Defend our sovereignty from the Eurocrats?

Friday, 1 July 2011

What now for Greece?

The Greek parliament has voted through an austerity package to get the next tranche of bail out money. Where will this money go?  Well mainly to Greece's French and German creditor banks who have been running huge carry trade positions in Greek bonds.

A carry trade involves a bank buying Greek bonds and then repo-ing these bonds as collateral with the ECB to get more Euros to buy yet more Greek bonds. The bank collects the coupon of say 12% on the bonds but its repo financing cost at the ECB is only just over 2%. Wonderful! What is the snag? Well if Greece defaults on these bonds there are no coupon payments plus far worse the ECB demands its money back and the bank's Greek paper is unsellable rubbish and the banks end up with a bigger than Lehman hole in their balance sheets which will as before have to be filled using tax payers money.

This would be seriously bad news for politicians coming up for re-elections like Sarky and Merkel. Seen in this way one realises Sarky's gestures are simply naked self interest. He wants to use other peoples, ie your money, to rescue his banks. The good old British taxpayer wil pay via the IMF which is now a wholly owned subsidiary of Sarky via its new MD Mm Lagarde who wants to be president of France in 8 years time after Sarky. Her interests are exactly aligned with Sarky's which is why the French were so keen to get her into job.

As Portillo pointed out last night and I opined in this blog some weeks ago the really depressing thing is boy George and cast iron Dave were vociferous supporters of Christine. Whose side are they on? Well not the UK taxpayer. I weep for our country.

Sarky's wizard scheme to reschedule Greek debt along Brady bond lines is all smoke and mirrors and again designed to help French banks rather than Spiros in Greece. It involves a substantial hidden government guarantee that the Germans will not accept. Brady bonds worked because it was run by the US Treasury and the banks involved took a 50% haircut on their loans to Latin America. Oh and the currencies involved were devalued as well.

Its all about postponing the evil day until the Eurocrats can get their hands on yet more of our money and with Dave, George and now Christine to help them they should not have too many problems doing this.