At the End of the Day

The only thing in Britain which doesn’t take us by surprise is failure

I imagine quite a few perfectly healthy Brits will be throwing a sickie tomorrow. Once again, Britain has a Wimbledon semi-finalist. He’s on absolutely top form, and playing the top seed Nadal in what promises to be a cracker. When that obnoxious git Krishnan Guru-Murthy said on a news comedy show last night “Of course Murray can’t win Wimbledon, don’t be silly”, I immediately began wanting Channel Four’s answer to Johann Hari to be proved spectacularly wrong.

A large part of me, however, thinks Guru-Murthy is probably right. For Wimbledon has become, over the years, the best weather-vane with which to gauge Britain’s state of mind, and level of decline.

Murray himself, for example, is a classic case of an obsessional loss of life balance in pursuit of a goal. I don’t know if you’ve ever noticed this, but our Andy has no sense of humour and – beyond tennis cliches about focus and attitude and feeling good about himself – little or no conversation. He has no style either, what with that dreadful wispy bumfluff sprouting from his neck, and shorts that always look as if they might be on inside-out. I know dozens of Andy Murrays in the UK. They work in ad agencies and commodities and Hitech and retail, and the reasons I don’t know them better are first, they never have any time; and second, they never talk about anything except digital banners, footfall and pork-belly futures. Andy Murray is the British dickheads’ champion.

Wimbledon crowds reflect our emotional incontinence and increasingly exhibitionist tendencies to a tee. Murray has set point, so those shrill “C’mon AndEEEEE!” yells start. He bounces the ball in readiness, and some twerp always wants to fill the silence by going “Whoooo” or “Yehheer”. In thirty years time, the yarooing twerp will play back recordings of the moment to bored grandchildren, saying “Hear that? That’s me that is!” It’s all part of living in the Facebook generation, because it’s all about Look At Meeeeeeeeee.

The expensive strawberries and corporate entertaining tents increasingly reflect a society within which the awful few have an awful lot, and the rest of us watch the telly. The prize money is getting ridiculous. And the ever-present pc insists that women earn the same as men – this despite endless market evidence that mens’ tennis is far more attractive to most fans. Once again, the feminists triumph over the realities.

Equally British is the BBC’s hold on the coverage rights. Auntie has lost most of them, but the traditional BBC (one somehow imagines) will always be the perfect Wimbledon broadcaster.

The Beeb still suffers from the generic live-sports delusion about former players making good commentators. Boris Becker makes technical observations during every game, but the problem is they’re the same ones over and over again. “That’s good, he has broken service. This means he can have a rest, and then come back fresh to clinch the set”. Becker is engagingly honest when talking about his life, but up there with Martin Keown in the commentary box. And Tim Henman is wooden. Nice enough, but wooden. I keep on wanting to shout “C’mon Tim!”: it was a way of life for so long, I can’t break the habit. Perhaps in recognition of his Wimbledon career, they won’t let him commentate on the Final. He’ll lose to John McEnroe in the semis.

Penultimately, if Wimbledon is about anything, it is about the British plonker. In the background are very old upper-middle class men trying to maintain some air of dignity in the face of all the grunting and line-call arguments. In the foreground are very wealthy young men and women cadging free Champagne off their suppliers and agencies. On the Court are British players who promise much and lose badly. And in the commentary box are the semi-finalists from three decades of average performance and hopeless temperament. Britain is superficial, amateurish, incompetent, visibly falling apart and devoid of adventure. All of this is on show at the All England Club championships.

And yet finally, the cachet of the event for foreigners demonstrates just how much potential there still is in the brand ‘England’. (Sorry, Scottish people, but on this issue I agree with you: Andy Murray is a Scot, but the appeal I’m talking about here is green England, not Bonnie Scotland). What’s lacking among many other things in the country England is one, any imagination within the Government corridors of Whitehall and Westminster; two, an education system based on ambition, inspiration and individuality; and three, a sporting investment plan to raise standards. What the Wimbledon Club itself is good at is preserving the brand Wimbledon. It was made in England to be quintessentially English. These days it is a confection: but the enormous power is still there.

Many English products reflecting our lingering image of fairness, eccentricity and decency are woefully under-exploited. The reason is obvious: Britain has no brand manager. I don’t mean the ‘Cool Britannia’ bollocks, I mean those aspects of England with global appeal – Savile Row, Oxford, Shakespeare, country pubs, solid furniture, tea, jam, milk chocolate, real ale, rock stars, the BBC, architecture, fruit cake, roses and a million other things.

Our lives in 2011 retain virtually none of this. But we don’t need to sell to ourselves, we need to sell our cultural output to others. I hope Murray wins tomorrow. But if he loses, that too will be in tune with our increasingly self-placating acceptance of mediocrity: “Never mind – there’s always next year”. The UK faces a situation in which there isn’t going to be any next year unless we raise our game now.

 

 

HACKGATE DAY 166: Furious yawns as Hunt gives Murdoch the BSkyB go-ahead

Murdoch….closing his grip

As long as Camerlot fears Murdoch more than us, Newscorp is going to get away with this bent approval

Jeremy Hunt was 15 when Rupert Murdoch bought the Times titles off Thomson. So he probably won’t remember all the undertakings, promises, non-exec directors and watchdogs that were used to quieten opposition back then. I have to assume this, because it is clear from today’s announcement by the Culture Secretary that Murdoch is about the pull precisely the same stunt to get the BSkyB bid approved. Of course, it could just be that the oleaginous Hunt is stupid; but more likely, he is simply doing as he’s told.

But to show fairness and illustrate that he is the complete Hunt,  he has added four extra conditions to the deal:

• Sky News board meetings will be attended by an independent director with editorial experience when editorial decisions are to be made.
• A monitoring trustee will be appointed to make sure News Corp applies with its undertakings on Sky News.
• Other Sky channels will continue to promote Sky News.
• Sky News’ Articles of Association have to be approved by the secretary of state.

The government received more than 40,000 representations in its consultation, but said there was ‘nothing to change its earlier view that the spin-off of Sky News would make the BSkyB takeover acceptable’. Not 100 civil cases for phone hacking, then? Not 30 years of pernicious influence on politics? Bribing coppers? Probability of senior Newscorpers facing criminal charges? Well no – the Government does have a point here: the scheming, corrupt criminality was there before, and it’s still there now. So why change your mind?

Enough: we’ve been over this terrain so many times before. The main reason that Camerlot feels minded to accept Rupert Murdoch’s BSkyB bid is because they are infinitely more scared of his power than they are of ours. It’s as simple as that. At the moment – and it’s important we all grow up and face this – Newscorp is going to pull this deal off. I am still of the view that even if it does, afterwards the filth will all float unpleasantly to the surface. But will it matter by then?

There are six key reasons why this grubby arrangement is going largely unopposed by the majority of Brits:

1. The news is dominated by economic meltdown and Greek riots.

2. Individuals and families are very concerned about their personal outlook, and whether they’ll have a home this time next year. Who owns what newspaper is a matter of extreme indifference to them at the best of times: at the moment, it’s miles away from any radar out there.

3. As Andreas Whittam-Smith wrote splendidly this morning, Murdoch’s real domination of the UK media market – as in all media – is being hidden by just this one deal.

4. The most high-profile objectors to the takeover tend to be people in the liberal-to-Left axis of British politics. They tend to express their opposition in terms both pompous and polemic. Middle England loathes all that bollocks. It also notes that not a single member of the Tory Party  has come out against the deal.

5. The newspapers these people read are the only ones pursuing Newscorp criminality and police/political cover-up with energy. Most of the time, mainstream British opinion is unaffected by the revelations.

6. Irony of ironies, the distraction offered by Murdoch’s highly marketable mix of cheek, prurience and sport means that Essex Man actually loves what the old bugger has to offer. Destroying Newscorp, perhaps they think, will put an end to those big plasma screens of a Saturday and Sunday down the pub. Rupert Murdoch has, in fact, played a major role in brutalising the culture in a way the majority of citizens at worst tolerate and at best enjoy. Whereas 73% of Greeks strongly oppose their country being auctioned off, I doubt if even 25% of UK voters know enough about the BSkyB deal to have any opinion either way.

This isn’t defeatism, it’s realism. It’s going to take a Dictatorship of the Awake to stop this now. No longer can most of us sit back while the Guardian and the Independent dig up evidence of pointing the finger at most of the UK’s senior Murdoch personnel. As with most things today, the cops are corrupt and the Government doesn’t care: it’s up to us.

What can we do?

Well for starters, you can go the Avaaz website and send an email giving your support to its opposition to the deal. The statement there is, I’m afraid, syntaxically the rather Leftist idealism I mentioned earlier. But it’s in a good cause: send the email. They’ve only had this page up for a day or so, and already they have over 370,000 supporting votes. While your at it, share the page with every social network you’re on…especially MySpace, which the Antipodean Genius was forced to sell yesterday for 10% of what he paid for it ho-ho. He lost half a billion dollars on the deal – he IS in trouble. Without this BSkyB deal, he’ll be in even more trouble.

 

Next up, you can pay heed to what Whittam-Smith wrote this morning:

‘….the Murdoch share of the combined daily and Sunday circulation of national newspapers is currently around 35 per cent. The Daily Mail group is in second place with a 20 per cent market share. But there has been no inquiry. In no other industry would the matter have been left unexamined for so long….’

In short, under the Monopolies Act, Murdoch’s press ownership is illegal by 10%. Why hasn’t this been rectified? Bombard the MMC with this question. Do the same to Basil Brush at Culcha. Jam the switchboard at Number Ten.

Enlist the help of Americans – they hate Murdoch even more than we do. Give them the Avaaz link – get them to vote. Get them to email their Congressional representatives. Explain why this could help get rid of Fox News. After my spat with them, this sticks in my thoat: but comment thread at Huffington post, again with the Avaaz link. Huffpost readers loathe the Digger. Do the same at The Daily Beast: the editor’s old man is Harry Evans – the first Times editor screwed over by Rupert Murdoch. Enlist Tina Brown’s help. If you know Harry or people close to him, enlist his too: he’d like nothing better than to poke Merdeschlock in the eye.

But in the end, the three things most likely to stop this atrocity coming to fruition are Government fear, high-profile Newscorp arrests, and civil Court proceedings….during which senior names such as Brooks, Murdoch (James), Coulson and so forth. Whacking these Newscorp achilles heels requires more thought than I’ve been able to give to this so far – but if you’ve got ideas, then let’s hear them. This is now open house and open season until the BSkyB deal is either done or dead.

 

At the End of the Day

How America lost its appeal, and its sense of community

I’ve been listening online to some Oldie rock n roll stuff from the late 1950s tonight: Eddie Cochrane, Buddy Holly, Little Richard and the Everlys – that sort of thing. I’m finding it difficult to remember why, but it evokes memories of hot summers (I think 1959 was very hot indeed)  and the early stirrings of sexual desire.

Very few Brits are prepared to admit it these days, but everyone where I lived wanted to be American. When my Dad came home one evening in 1960 to show off his new two-tone Zephyr Zodiac with whitewall tyres, I affected an American accent for months afterwards. Mum made me a Davy Crockett hat in 1957, and I doubt if it left my head, come day or night, for even more months. America was it back then: the Yanks had Chevvies and levees and drive-ins and senior proms and they dug things and said stuff like “hit it man!” I had not the remotest idea what any of it meant, but boy was it desirable. When Elvis released I’m All Shook Up, in my head it was a new noun, Amallshokap. These American people had it all, and I was desperate to join in.

These were the heady days before Vietnam and Lee Harvey Oswald ruined it all. Booby Vee sang Run to Him, and although I hated him for stealing my girlfriend Hilary’s heart, I would’ve undergone a larynx transplant for that voice. I heard it again tonight – The night has a thousand eyes -  and it sounded as great as ever. I’m baring my breast here, dear reader: liking the stuff between Elvis and the Beatles is about as unhip as it gets.

Time now to look with more than a little sadness at where we have arrived half a century later. I went to the Reuters website an hour ago, and saw this headline: ‘Exclusive: S&P to deeply cut U.S. ratings if debt payment missed’. OK, there was a split infinitive there wide enough to fill a 60″ HD plasma screen, but that wasn’t the point: the nation that had boldly gone to new worlds was about to be deeply cut. How in hell had this happened?

Standard & Poor’s managing director John Chambers was saying that if U.S. Treasury bills maturing on August 4 weren’t immediately honoured, then the series would be downgraded from Triple A to D.

Once again, we are back in that room with a debt ceiling. No glass ceiling, this: the Republicans would prefer it to be made of concrete, but President Obama has another material in mind. Like rice paper, maybe.

Fears of a technical default have been rising after budget negotiations between Democrats and Republicans fell apart in Washington earlier this week. If agreement isn’t reached, then the US will be unable to pay off $30 billion in maturing short-term debt. Thanks to tactical Congressional wrangling, an amount less than 10% of Greek national debt could render the USA a debt pariah. To be exact, S&P sees a 1 in 3 chance that the States will default during the next three years.

The U.S. Treasury reached the country’s $14.3 trillion debt limit on May 16, and has been making use of extraordinary measures to keep servicing its debt since then. This can’t continue for long. Of course, the US is sliding into the abyss – but it has far more alternatives than dear old Blighty. What it doesn’t have is a President capable of taking on the Enemy Within.

Ripple dissolve back to my earlier reminiscence. My teenage years were spent watching Eliot Ness sorting out America’s Mafia-fuelled drink problem single-handed through the strangely wooden medium of Robert Stack. Al Capone and Frank Nitti might have made billions in the numbers rackets (whatever they were) but they couldn’t survive once Ness’s unwavering glare had vapourised their evil.

Today, Lloyd Blankfein threatens to starve Obama of re-election funds and lo, in New York, Democrat fund-raising falls by 45%. Ben Bernanke blasts taxpayer billions into a QE programme designed to create credit liquidity, and Wall Street gratefully swaps its toxic rubbish for crisp Dollar bills, which are then used to underwrite megamergers to move yet more American jobs offshore. In 2011, ‘The Feds’ are no longer Eliot’s Untouchables, but rather Geithner’s Unethicals.

The Bay of Pigs, Vietnam, Nixon’s bombing runs over Cambodia and Reagan’s trickle-down greed recipe destroyed the American global reputation for promoting good stuff. Ronald Reagan was a well-meaning man who understood the USSR’s inherent weakness better than most, but he was too easily bamboozled by smart-alec economists. Their snake-oil ideas went unchallenged for too long – and when they were at last found out, Dubya the White House pet chimp could only grin and say, “Hey – Wall Street got drunk”.

When I was a kid, it wasn’t just that America had malls, Ed Sullivan, Phil Silvers and Murray the K. It had innovation, it had chutzpah, it had crazy aspirations, and it represented unlimited potential for human betterment. It was going to the Moon, it was going to eclipse every Empire in history, it was going for it. As such, it commanded respect.

In 2011, the best its two Party machines can come up with is Barack Obama and Mitt Romney….and a bunch of self-absorbed idiots playing politics with the nation’s credit rating. America hasn’t been to the Moon for over thirty years. Let me tell you why I think this is.

What happened was that the multinational accountant and the investment banker got the upper hand. They replaced the capitalist risk gene with the ROI for shareholders bollocks. Aspiration was replaced by accumulation. Life balance went the way of the balance sheet. And above all, ambition was replaced by ambivalence.

Accountants and bankers discovered a different New Frontier. It was called South America, Eastern Europe, and then Asia. But so busy were they Doing it for the Shareholders, they ditched American core values in favour of Globalist fervour.

Now eternal growth and globalist mercantilism has been found wanting, the arid imaginations of bankers and bean counters know not what to do. All they can think of is the survival of their corporate entities and bonuses. They would not know which way to hold up one of JFK’s greatest encouragements:

“Think not what your country can do for you. Think instead what you can do for your country”.

Corny? Perhaps. But Kennedy’s challenge was for everyone to contribute communally: it wasn’t brainless jingoism. I’ve wittered on endlessly for years about the need for manageable pack sizes to which our species can relate. As the Greek unrest has shown today, nationality is still the strongest of these. Money isn’t it. Family and Community needs to be a bigger part of it. Globalism sure as hell isn’t it, any more than the EU is. Neither is banking and accountancy.

I’ve no desire to turn the clock back. But even at five to midnight in the dark night of capitalism’s soul, I want to look back to when it was a bright new morning – when business had a master called the greater good. Those who were small or unborn at the time could learn valuable lessons from the naive 1950s. More than anything now, America – and the west as a whole – need to reject the cynicism of bonus pools and the greed of liquidity pools. It is time we got back to pooling resources for the good of the greatest number.

 

CRASH 2: Banking crisis? Wait until the UK property bust really gets going….

Bank of England MPC in disarray on rates as new data disappoint

The Bank of England released the latest personal lending figures this morning. The level stayed pretty constant at £1.2billion, but is still 30% below what it was in February. In the same month for 2008, the figure was £7.8billion – over six times higher. This is, however, only the latest confirmatory piece in a jigsaw that is beginning to suggest a property implosion of unparalleled enormity. And the influential BoE Deputy Governor Paul Tucker has signalled his growing conversion to the need for interest rate rises.

The two reasons the UK housing crash hasn’t been enormous to date are (1) the banks have a gun to their heads from government forcing them to be tolerant of those behind on their mortgage payments; and (2) zero-rate interest policy (Zirp) has meant that only a fraction of buyers have actually handed over their keys to the provider.

UK Asset Resolution (UKAR), which owns Mortgage Express, many mortgages from B&B, and some £44bn of “bad” mortgages from Northern Rock is tackling the “forbearance” offered to 44,000 customers last year by reducing monthly repayments to help them stay in their homes. The chief executive, Richard Banks, a former Alliance & Leicester banker, was blunt with the Guardian last week:

“As a kneejerk reaction in the emergence of the crisis and because the government asked us to be forbearing to customers in the hope it would all go away – we as an industry have been too lenient with some customers…..You can see that if you don’t do something about it, there will be a tsunami. If you don’t get into the hills, you could get drowned by this. If you don’t manage this properly, it could get very messy.”

You can almost feel the anxiety in that quote – and, I think, the frustration Banks feels that so few homeowners or policymakers have taken in the level of catastrophe that is coming. New research from zoopla.co.uk shows that 4 out of 5 homes purchased in Britain since 2006 have a value in 2011 below their purchase price. Of these, it is estimated that well over 75% are in negative equity as well. That’s around three million dwellings. Think through the effect on market values, once interest rates go up again, of that many properties coming up for auction. Auctioneers are already reporting sales going through at 40% of the original price paid by the insolvent owners.

Even half of all homes bought over the last 5 years in London are now valued below their purchase price. While this underlines how resilient the capital has been to the property downturn compared to the North and Midlands (where things are already dire) we should recognise that mortgages are on average (because of lifestage and property costs) 40% bigger in London than elsewhere – and thus exceptionally vulnerable to interest rate increases.

It’s also important to overlay onto this picture issues such as under 25 year old unemployment – now at record levels among those relationship-formers who would previously have represented the feeder-traffic into the bottom end of the market. This, too, is especially true of London.

The broader issue of rising unemployment is also one that must be addressed. It is abundantly clear now that, while unemployment has been steady for a while, the fall in full-time contracted employment has been enormous. The private manufacturing and ‘new industry’ sectors of the UK economy are doing well, but at an absolute level far too low to sustain productive growth. The IMF has reduced its 2011 forecast on UK economic growth to 1.75%….down from 2.5% in September last year. Government ministers admit in private that this may be optimistic – 1.4% may be nearer the mark – and that things will get a great deal worse before they get better. Unemployment, many observers feel, will rise further towards the end of autumn this year.

Contrary to expectations, lowering interest rates has not led to increased willingness to spend. Repaying debt has been the trend for some time now. Another sign of this is the continuing slump in retail sales, with increasing numbers of shop chains going into receivership. Thorntons have closed stores, Carpetright profits crashed by 70%, and Jane Norman has gone bust in this week so far alone.

Two weeks ago, UK house prices fell at their sharpest annual rate in 19 months. The acceleration in price falls is obvious, and this may well be connected to the fact that official statistics yesterday showed real disposable income in the first three months of 2011 suffered their most painful annual squeeze since 1977 – 34 years ago, at a time when the IMF very nearly fired the Labour Government from the job of balancing its budgets, and the top rate of tax was 83%.

So-called analysts have consistently underestimated the pace of market contraction. The 4.2% fall so far this year was expected to be 3.7%; this may not sound like much, but it proved to be a 15% optimistic outlook. The Daily Mail in January said the market would be stable.

Rather more reality is available in the shape of the gloomy forecast from investment consultancy CheckRisk, which suggests a perfect storm could send house prices down 20% this year. Even this, I fancy, is a vision of the future stuck in the past.

For me, the problem with so many contemporary predictions is that very few forecasters use their imagination to deal with new circumstances. On top of this, they talk of a ‘perfect storm’, the effect of which they have aggregated. But after a certain balance is tipped, the rate of acceleration becomes exponential. Tired parallel or not, the Titanic’s loss still remains the best analogy: 67% of the submersion of the ship took place in the last ten minutes before it disappeared below the waves.

To each physical data set, for example, one must factor in the effect of micro family bad news, macro economic bad news, and micro market bad news. This is never 2+2+2: more often the progression is (2 x 2) squared. So instead of six, the answer becomes 16. Very few people can think beyond the linear; but most case histories of market panic and economic slump show that such thinking is central to accuracy. After a certain time, the sheer weight of bad news acts like the steel of a liner that is no longer buoyant: the speed is so frightening, everyone is taken by surprise.

In just the last six days, an example has emerged right at the heart of interest rate policy: Paul Tucker, the BoE’s deputy governor, revealed he is close to voting for a rate rise – putting him at loggerheads with Sir Mervyn King, the Governor. A vote for higher rates from Mr Tucker, who many think will succeed Sir Mervyn in 2013, could very easily tip two further MPC members over to his side. To this sensitive balance has been added the Bank for International Settlements’ blunt observation that rates need to rise sooner and faster than expected. While King has been airily talking of Zirp being retained until July 2012, a number of commentators (myself included) think this to be spin: inflation is yet another economic dimension that tends to catch even experienced mathematicians out. UK inflation is already more than double that which King forecast: with a weakening Pound and still struggling exports, it could hit 10% in no time.

My money (as of yesterday) is on a maintenance of what I call Dogmatic Denialism by the US, the EU, and the UK. Debt will not be forgiven, there will be no coordinated G20 strategy on either this or inflation, China is going to find itself the less than proud owner of self-inflicted stagflation on a grand scale, and over-leveraged Russia will struggle in an environment where industrial ennergy needs evaporate. In that context, some major defaults are a certainty – and thus the banking system in its current form will not survive.

For Western property owners, that is the unfactored development. All things considered, I think we will be very lucky if the average domestic property correction this time next year is under 25%.

 

GREEK AUSTERITY LATEST: Austerity vote will be carried, but doubts grow about details, asset sales

Hysterical Domesday propaganda masks the real tragedy

While there seemed to be general media agreement this morning that Greece’s austerity package will not be voted down by Deputies in Athens, sources both in Greece and among credit suppliers are of the view that some of the detail will be rejected. There are also growing signs among lenders that cutting losses now would be preferable to what the EU is attempting to achieve.

“I’ve been told that the ruling Party will nick it,” said one late yesterday, “but there are some bits of it that will fail, without a doubt. There is a long, long way to go on this yet”.

“Part of me would like the package to be voted down,” said another, “this is a stay of execution, not a pardon”. Sources close to a major Swiss creditor also told the Slog that there was little faith among professionals that Greece could survive.

Meanwhile, the scare-mongering media assault has gone into hysterical overdrive. ‘Greece faces suicide vote on austerity’ warned the FT’s main front page headline; the ‘suicide’ bollocks was extracted from Greece’s central bank governor, George Provopoulos, who has been quoted as saying “For parliament to vote against this package would be a crime. The country would be voting for its suicide.” Suicide is obviously still a crime in Greece. And voting against what the EU wants is about to be.

Ollie Rehn was also turning the screw from Brussels: “The only way to avoid immediate default is for parliament to endorse the revised economic programme …..it must be approved if the next tranche of financial assistance is to be released,” he said in a statement, “there is no Plan B to avoid default”. Are we all clear on this one now? The Conservative Opposition in Athens, however, takes an entirely different view – which happens to coincide with mine. Antonis Samaras reiterated his objections:

“This policy is wrong, it has exhausted the Greek people and Greek society,” he told parliament. “If we perpetuate this mistaken policy we will only make things worse, both for Greece and for Europe.”

However, it’s time to welcome Queen Christine back into the melee, albeit at three seconds to midnight. The new IMF boss – you read it here first - said she hoped the Greek people would unite on the austerity issue. I think quite a lot of us wish for that Mme. Lagarde, except perhaps not in the way you mean. As we have seen here many times before, Christine Lagarde is an idiot. And Richard Blackden airs her lack of experience with unconscious humour in the Telegraph this morning (my italics):

‘The first and least troublesome [issue] is some inevitable concern within the IMF that she’s not an economist.’

Blackden has a point: compared to the factory-fitted idiocy, Christine’s inexperience probably doesn’t count. You really could not make this up.

Following The Slog’s analysis of Greek assets last week, several mainstream media have repeated my point: it’s a fire sale, and so the prices will reflect that; and there is little appetite out there at the moment for buying assets, let alone Greek assets.

I stick with what I’ve asserted all along about this madness: Greece will not get the assets away, and will not be able to keep up with the new restructuring. Further, once it becomes clear to the Greek people that they have sold their sovereignty in order to prop up three French and two German banks – and Wall Street CDO insurers – there will be hell to pay. And finally, we have at least another four of these collapses to go through yet.

We are about to find out just how gluttonous the EU’s citizens are for this kind of obscene punishment.

At the End of the Day

The quotes and agendas game

Anyone can play this one. All examples will be gratefully received, and in the meantime, here’s a few I did earlier….

‘ Deutsche Bank’s CEO describes the situation in Greece as critical and warns contagion to other euro zone members could lead to a crisis bigger than the one sparked by the collapse of Lehman Brothers. …’

Agenda: please don’t make me pay towards this Greek unpleasantness, after all I’ve already been forced to buy DeustchePost and  I wasn’t there honest, I was inside watching telly officer, and anyway if I go broke the sky will fall in.

‘ European Commission President Jose Manuel Barroso said: “On Greece, we have once again shown that we find agreement when agreement is needed. It was important because we have shown that our new way of dealing with the European economy is working. We can turn today’s challenges into opportunities only if we stand together, give a collective response.”

Agenda: Look, I’m on a good screw here, and heh – if we just pretend that this is really about solidarity rather than saving the banks and my salary, then you never know….you lowly peasants out there might make it into the lower middle-class one day. Really.

‘I’m Boris Johnson and I’m on your side what with all these bicycles that make me look green and by the way, that idiot Cameron…hah, perff – what does he know, eh? He’s happy to be ridden roughshod by a bunch of ClubMed twisters but if it was me let me tell you, I’d say you can stick your EFSM up your a…n….u…s, so make me Tory leader for a better future and bigger cuts without silly EU contributions’.

Agenda: Oh dear, capital expenditure by local authorities in England rose to £24.5 billion in 2010-11, a year-on-year increase of nearly 15 per cent, due mainly to the Greater London Authority’s expenditure via Transport for London….

Behind every good man there is a great woman.

Behind every good quote there is a bad man.

ANALYSIS: How and why Camerlot is losing the persuasion battle

The Prime Minister’s entourage and attitudes are getting in the way

Because of the unexpected and undignified nature of his passing, the content of Christopher Shales’ last memo on Earth has passed most people by. On reading it again this morning, I was struck by the obvious point it was making: that many of the Coalition’s actions are seen by the electorate as not only lacking legitimacy; the general demeanour of the Tory Party in general and Camerlot in particular are adding to this feeling. Bizarrely, Lord Tebbit of all people said something very similar in a press interview last weekend – that knee-jerk action to curb strikes would be seen by the electorate as gratuitous and lacking in public support.

The interesting thought here is that it may not just be the hopeless incompetence of the communications team around David Cameron that is to blame for the Government’s failure to win arguments against the predictable avalanche of liberal criticism. It may not even be the persistently truculent behaviour of the LibDems in only grudgingly approving any of the legislation at best, and sabotaging it into meaningless muddle at worst.  Rather, the main problem might be the insouciant boorishness and arrogant assumptions that underlie most things said and done by the loyal boys club around Dave; and the complete lack of conviction with which these ‘professional’ technocrats then turn tail and run at the sound of gunfire. The hallmark of bullies is, after all, that unattractive mixture of threatening bluster and then desperate cowardice.

Considering that the Tory Right regards Camerlot as ineluctably wet, the Round Table has a remarkable ability at times to represent all that is ghastly about assumptive privilege. The casual way in which the Prime Minister approves of  ‘the family leg-up’, for example, I find profoundly distasteful. The similarly insensitive manner in which he dismisses those who want out of the EU as ‘BNP lite’ is more typical of a spoilt popinjay than a politician with an instinct for what’s on the voters’ mind. (Let’s face it, if you have to hire Andy Coulson to read the punter’s mind, then you don’t know much).

On the few occasions when I’ve raised it with them, the inability to engage any of Camerlot’s elite in my feelings of repulsion for the values of Rupert Murdoch has set me hard against them. The intelligent stupidity of Jeremy Hunt’s sleazy grin is one of the few sights capable of making me want to thump somebody – him – very hard. The remark of a Cabinet minister to me least year that the utterly undemocratic EU could be safely ignored as ‘an imponderable’ disappointed, for I have always found him a caring man. And so on and so on. It all adds up to a sense that these are people looking down on ‘popular opinion’ as something which can be circumvented – until such time as it becomes a threat, at which point it must be slavishly indulged. Prison sentencing is perhaps the best example of this: the overall impression given is of people who care for populist power, but not the hard duties of leadership.

I am on many issues several leagues to the Right of this mob, but their ability to irritate with this electorally superior attitude never fails to strike me as uniquely repellent in British Conservative politics. Heath was chilly, Thatcher slightly mad, and Major simply boring: but none of them got on my tits to quite the extent that Cameron, Osborne, May and Hilton do. Only Harman, Jowell, Brown and Blair have ever beaten the ire they can evoke in me. In that context, I’d rather have the Goves, Duncan-Smiths, Clarkes and Tebbits of his world. To be honest, I’d probably rather have Frank Field than any of them.

An unattractive melange of U-turn, half-hearted Thatcherism and polemic bigotry, for example, probably led to the astonishing vote at the BMA Conference yesterday, when delegates backed, by 93% to 5%, a motion arguing that ‘competition should not be forced on the NHS by imposing any duties on commissioners to promote choice as a higher priority than tackling fair access and health inequalities’. I couldn’t agree more with that sentiment, because it represents a form of moral common sense: why does choice matter to a patient staggering into A&E with chest pains?

The latest set of opinion polls to come out of UK Polling Report (an excellent site if you’re a former research anorak like me) represent fascinating support for this view of the Coalition as an entity that shoots itself in the foot with a carelessly cocked, hand-crafted Purdey on every occasion. Comres, for instance,  asked last June 19th if people agreed that “public sector workers” were right to take strike action over maintaining their pension plans. They found 48% agreed and 36% disagreed – a reflection of just how many people are employed in the public sector, but also of Camerlot’s spectacular failure to convince the one fifth in between.

On the same day, Populus conducted fieldwork asking Brits whether it was ‘fair’ to strike in Britain’s current circumstances. A relatively high 54% thought striking legitimate in this climate: but only 18% disagreed. The Coalition should surely see its inability to persuade what seems to have been the 28% middle-aged, middle England  in between as a communications disaster. I have no designs on the right to strike: but I do object to the highly-paid opportunism of Dave Prentiss and Bob Crowe – and I have little faith in a Tory Government that can’t win that argument.

Also supporting my view was the YouGov research of three days earlier, which did demonstrate that on the issue of whether people supported specific strike action by teaching unions over pension changes, job cuts and a pay freeze, 39% supported it, but this time 42% opposed it. I would strongly contend that this was an experiential and profoundly cultural expression by private sector strugglers and hacked-off parents about the pompous inadequacy of Lefty teachers – and that almost none of it was down to anything said by Camerlot…most of which had been wishy-washy: the sort of lets-be-nicey-even-though-we’re-nasty that was so transparent during the 2010 General Election.

Yet when it chose to get heavy – and for once the Coalition did now set off on a well-designed and executed programme of positioning the teachers as reform Luddites – things quickly swung in its favour. Eight days later, YouGov found only 38% in support, and 49% against strike action.

I doubt very much if the Round Table will take note of any of this – its inability to analyse research with thoroughness and insight has been a hallmark ever since the Camerlot triumph of 2006 – but they should. Its very lack of conviction about anything means that it rarely bothers to speak from the heart. And that empty cynicism in turn means that when Ministers do demonstrate passion, the tendency is to dismiss it as the worst kind of ham acting for the cameras. Michael Gove is an honourable exception to this rule, in that while he rarely shows passion, he is passionate about education reform – and it shows.

In this context, I also feel sorry for Ian Duncan-Smith. A spurned former leader, he is completely out of place in this Administration: a quiet, well-meaning and dedicated bloke with the needs of welfare users as important to him as taxpayer value for money, he is dismissed by Cameron’s lightweights as a plodder. Nothing could be further from the truth: both he and David Davies, for all their faults, easily detect the public pulse, but refuse to be slaves to it. They have insight and the genuine love of the Rule of Law and a level playing field. They are public servants in the best sense of the term. Along with Malcolm Brady and his passion for the social mobility that flowed from Grammar schools, they represent an element which, if it predominated in the Conservative Party, would effortlessly attract my vote.

But what we have instead here is a quite incredibly unrepresentative oligarchy – the triumph of One School Oxbridge Toryism over One Nation Conservatism. A largely ineffectual mafia with no qualms at all about dealing with gargoyles like Murdoch for their own advantage – or doing the banks’ bidding because one’s uncle was a stockbroker, don’t you know. They fail in the persuasion battle because – as every good negotiator in history has always known – the secret of success is finding out what the clients want, and then selling what you think they need -  without compromising your principles irrevocably.

Some level of compromise is inevitable. But understanding and believing in your principles is vital if one is to persuade honestly and convincingly. The Blairites failed because of this. And so too will Camerlot.

An end to the Greek crisis now looks definitely uncertain.

Fee-diddle-fy-do-bum-bum-bum

The French have a plan. What’s more, even Trichet has approved the plan. It is called, “Nous kickons la boite down le road”. But it is still a plan that will ‘change the game’, and that much is true: it will change the date of Greece’s default, but not its inevitability. It’s also illegal under EU Law…but Blind Eyes are the order of the day, it seems.

An hour ago, the New York Times said world stocks were already rising ‘on hopes of a resolution of the Greek debt problem’. Sloppy reporting is so common these days, you wonder about the average hack’s ability to think. My New Year’s resolution was never to believe politicians who have resolutions to problems: so lacking are they in resolve, they never resolve anything.

As if to prove the point, within 30 minutes another NYT lady said no, hang on a minute, it’s now looking bad again…the vote may not pass, as some of Papandreou’s socialist comrades fear being ripped to shreds by the mob. This reporter’s mind-boggling assertion two paragraphs further down was ‘failure to pass the new law will engulf the world banking system in a spiralling crisis’. Yes, hmm. Well if you believe what the banks say about the danger, it will. And if you believe what the French banks say about their ability to withstand Greek default, it won’t. And if it won’t do the French can-kickers any harm, why the plan to (effectively) write off half the debt and delay Domesday?

This remains the fundamental problem at the core of so much media coverage these days: lazy, naive, ill-informed, and lacking in any attempt to read past, through or around the numbers in the press pack. The FT’s oped today, for example, is headed ‘Give Greece time to prove it can do the job’. But nothing below the headline suggested how it could do that job – or indeed, what the exact job might be. At the BBCNews website, Bobby Peston’s piece – ‘Is the French plan flawed?’ - showed no awareness of Der Spiegel’s piece from the day before saying the flaw was its illegality. (One of his comment threaders was left to point this out.)

The Wall Street Journal writes about how ‘the European Union warns that failure by the Greek government to pass into law and implement its newest austerity package would disqualify it from another bailout’. It still beats me exactly why the Greeks see this as a threat, but then I’m not there and staring oblivion in the face. However, I don’t make the point lightly: the EU’s diktat lacks any real ability to back it up. As so often in international affairs, the leader who just ignores the threats gets away with it. Hitler built a career and a Reich doing it. Not that I’m suggesting Greece should demand an Anschluss with Troy (although that would certainly be more entertaining) but rather that Papandreou could say “Stick your rotten, hypocritical rules up your Rompuy” or something similar.

The whole charade – the bailout, the deals, the threats and the dire predictions – is bollocks. Wholesale debt forgiveness or disaster: the choice really is that simple. For myself, I’m hoping there will be what the Fascists in Bankfurt quaintly call ‘an accident’. That is, the People or their representatives saying ‘No’. Usually, that sort of thing makes no difference to the EU at all. This time it would. If the Greek Deputies vote down the deal today, they will be doing all of us a favour in the long term.

If you liked this, you should have a look at Crash 2: Situation Normal, all….

HACKGATE DAY 163: Press Association Journalist Laura Elston arrested

 

A 34 year old female Press Association journalist was arrested tonight by Operation Weeting officers, on suspicion of illegal phone hacking. I understand the suspect is Laura Elston, a royal affairs reporter who has worked at PA since 2000.

Laura Elston was appointed court correspondent at the PA following the retirement of Peter Archer.  She interviewed Prince William in his final year at university, and Prince Harry to mark his 21st birthday. She has also travelled the world covering the Prince of Wales’s tours including Iraq, Iran, Bosnia, Jordan, Sri Lanka and Australia. She recently travelled with the Prince of Wales and the Duchess of Cornwall on their official visit to Egypt, Saudi Arabia and India.

 

 

CHRISTOPHER SHALE: Just what the Hell is going on here?

Doubts are growing about the nature of, and reasons for, the death of the Prime Minister’s local Party Chairman

Those who you who read last night’s At the End of the Day at The Slog will know that I was quite happy to put Camerlot’s local Party Chairman down as a simple heart-attack victim way back then, all those 24 hours ago.

But now things have gone from odd to silly and on to suspicious. In last night’s post, I wrote:

‘These days, just the words ‘dead in toilet’ are suggestive of drugs. Given that Christopher Shales expired at the Glastonbury festival, I must confess this was my first thought….’

As events have not so much unfolded as been folded up into a form of spin-origami today, it might help if I summarise below the order of play, and why it sometimes seems with government these days that the desire for everything to look normal actually creates conspiracy suspicions that may be completely unfounded.

* Shales is found dead. The police cordon off the area as ‘an official crime scene’.

* The Glastonbury organiser says the death contains “the circumstances of suicide”.

* We learn that the Shales corpse ‘wasn’t found for ten hours’. That’s a long period for a husband to be missing.

* The local Tory Party refutes the suicide assumption as ‘scurrilous’, and showers the media with evidence of Shales’s family history of heart problems.

* Police decide they are “not treating the death as suspicious”.

* The post mortem staff yesterday decide to carry out ‘toxicology tests’.

* The Coroner’s Court inquest opens this morning, but within a few minutes is adjourned.

* During the brief session, the Coroner’s officer Ben Batley tells the inquest that a post mortem examination was carried out, and the preliminary cause of death was “unascertained”.

* Despite this, the Coroner says, “As a result of me having opened this inquest I am content to release the body to the family.”

Just a few observations on this train of events. Despite some of the early contradictions in the statements, such is not unusual in cases like this: there are red herrings and confused people all over the place.

Things only start to get confusing when the post-mortem staff (looking for an Elvis-straining style weak heart trauma) take toxicology tests.

They become suspicious when statements like ‘unascertained’ are released….with further toxicology tests to come.

They start to look extremely odd when, after just a few seconds consideration, the Coroner decides to release the body.

——————————

Look, if there’s nothing unusual here, why not just say so? If there is nothing dodgy emerging from the post mortem, then why not confirm that? There could still be a perfectly normal explanation for all this: Shales had a cold, he took an OTC remedy, it turned up in his bloodstream. So now they need to recheck a few things….and release the body so it can be cremated?

I repeat: this may all be something and nothing. But anyway, there are two theories in circulation as I write.

The first is the one I made glancing reference to last night – and the words were composed after several email exchanges with my voluntary legal help:

‘rumours have been around for some time that several powerful media Tories of a West Oxford persuasion are fond of tooting the talcum of a weekend.’

I’m sure most of you can work out who the alleged line-dancers are in all this: as we know, WO is a tight-knit and rather incestuous area where elite mutual assistance and a leg-up rule supreme.

The second one has been advanced and expanded by Will Heaven in the Telegraph this afternoon. It can be summed up by the key phrase in his piece: ‘Strikingly, it looks like Tory High Command was desperate to keep this [Shale's memo] away from the public eye’.

I’m told by a reliable media contact that the leaker was NOT a local Tory. And more along the Tebbit end of Toryism than the Prime Minister.

The best way to close this piece is by me formally apologising to The Observer for raising the question of Shale’s ‘proximity’ to the senior Newscorpers who are WO-based. The Big O may well have a point after all.

Related: Cameron and the Murdochs: a close alliance

NEW EU DEBT CRISIS SHOCK: Hats off to Homburg

Stefan Homburg

Top German economist lifts lid on eurobank legal stitch-up

In an astonishing development in the EU/Greece fiscal crisis saga this morning, leading economist Stefan Homburg told Der Spiegel that ANY EU bank involvement in sovereign bailout – voluntary or otherwise – would be illegal.

You may have noticed that Trichet and the ratings agencies have been splitting the hairs of angels dancing on a pinhead since everyone started trying to figure out how to get out of the debt mess. This is because they represent all things banking, corporate, Wall Street, Bourse economics and US Fed Reserve.

But under EU banking law, they have a point. Because the ‘voluntary contribution’ solution is a red herring introduced by cynical Sprouts and Germans to disguise an inevitable fact: in the end, by EU law, if there are member bailouts, the taxpayer must cough up for all of it.

As the leading German economist Stefan Homburg points out (my italics):

“(EU) Banks cannot participate (even) voluntarily. An executive board is committed to its company’s welfare, and not the public interest. If it waives outstanding debts at the expense of its own company, this is a breach of trust and punishable by law….A bank can waive a portion of a debt with the aim of saving the remainder. This occurs in all bankruptcy proceedings. But things are different here, precisely because of the bailout package: If the bank refuses to make its own contribution, taxpayers alone will pick up the tab. This is exactly what a board of directors has to strive to achieve to avoid being accused of criminal breach of trust.”

Isn’t that neat? What we have here is an allegedly ‘market economy’ under which banks must not partake in bailouts – otherwise the State can prosecute them, and the shareholders can sue them for a failure of fiduciary duty.

As with most things EU, corporate interests insisted on this in the lawmaking, and so their needs came before those of the citizens.

Just so we’re crystal clear about this: if we bail out the ClubMeds, the banks must stay clear of any involvement. But if we don’t bail them out, the banks must pick up the total tab themselves.

Well, we’re doing the bailouts. Which tells you in one what’s really being protected here. And who the fall-guys are.

The seriousness of the situation has been exaggerated by the EU’s banking and political elite in order to save the banks from taking the hit….and Wall Street from the insurance hit. And if you doubt that exaggeration, take a look at some numbers.

The Greek GDP is valued at around $350bn, some ½% of global GDP – and less than 3pc of the eurozone. Greek debt all up is around $450bn. A crewcut level of debt forgiveness for Greece – or restructuring of timelines – would have the global effect of a gnat biting an elephant – inside or outside the room.

If all the peripheral EU economies followed suit in a disorderly fashion, then yes – things would get tricky. But not if the banking sector accepted serious haircuts. What has been kept from the general public so far, however, is that if the EU simply said ‘no bailout’, the banks would be responsible.

The top three French banks themselves admitted yesterday that exposure to Greek default would NOT sink them. But instead, we’re asking the PIIGS to stop all spending and sell the family silver – and it isn’t going that well.

Following the introduction of public sector austerity in Greece, the EU itself forecasts a sharp contraction of 3.5% in the Greek economy this year….and a deficit at 9.5% of GDP. As this seems to be happening throughout the PIIGS, the monetarist approach to these economies can be fairly firmly said to be making things worse – at least in the short term. And these countries don’t have any long-term without a relaxation of attitudes pretty soon.

This is indeed a crisis of solvency, and always has been. But it was initiated by cheap, reckless lending by the ECB, other eurobanks – and the usual US culprits such as Goldman Sachs…who also, remember, coached Athens on how to lie to Brussels about its deficits.

But nil desperandum banker people, because the law says you have zero responsibility. And as YOU tell our politicians that they must bail out the peripherals, that’s game, set and stitch-up to you.

Jean-Claude Trichet at the ECB wants every single euro to be paid back, interest rates to rise and make things worse for the Greeks, and a zero tolerance policy towards even debt restructuring. He only has a few months to go. He has an ego the size of Brussels does Jean-Claude, and he has his sights on a legacy that says “It didn’t happen on my watch”. The ECB boss is about sound money. Which would be fine if your own cheap loan deal for new EU members hadn’t kick-started all this spendaholic behaviour in the first place.

But Tricky is no more than a wily old banker putting his own kind first….as ever. Cameron kept us out of the bailout? If he was half-briefed, he could’ve made this a mega-issue about bailout validity in the first place.

Related: Why the Greek asset sale is irrelevant.

Dr. Stefan Homburg is a current Member of the Supervisory Board at MaschmeyerRürup AG. After studying economics, mathematics and philosophy, he was awarded his doctorate in Cologne, and his post-doctoral qualification in Dortmund. Even before graduating, he co-authored a standard work on economics. He is now Economics professor at the Leibniz University in Hanover, and Director of the Institute for Public Finances. Professor Stefan Homburg is highly regarded internationally as an economist and a successful political advisor.

At the End of the Day

 

Two people who were probably holding their breath today in anticipation of the autopsy on Christopher Shale were James Forsyth (the Spectator columnist who wrote the piece about him in today’s Dacre Mail) and the person who showed him Shale’s secret strategy document.

However, if they are upset (and you’d have to be a bit of an arse not to be) then it seems likely they can breathe again: most people who knew Shale say he was not the suicidal type. In turn, colleagues say he was aware of the MoS article and not terribly concerned by it. Further, it seems there was a history of early heart attacks in his family.

The slightly puzzling part of the whole affair is why the 75 year old organiser of Glastonbury Michael Eavis should’ve been prepared to say that the death “had suicidal circumstances”. He has a long experience of dealing with the media, and so one suspects he was fairly sure of what he thought were the facts.

Either way, Forsyth’s piece was the usual Dacre/Barclay brothers fare: get the Coalition at all costs, and do anything you can to show what a Horlicks Camerlot is making of everything. I would’ve thought it wasn’t necessary to publish leaked documents in order to demonstrate that – just reporting on what the Government does most weeks would be more than sufficient.

The rather unpleasant phrase Forsyth used about Shale’s  strategy document – ‘classic evidence of Cameroon Tory self-loathing’ – is the sort of gratuitous psycho-bollocks that can so easily come back to haunt those who write such drivel. There but for the grace of God go all scriveners: but some deserve the poisoned arrows of fate more than others. Cue death of James Forsyth, and shoals of letters to me from Mail devotees.

The Observer, meanwhile, surpassed itself in attempting to bring everything back to Newscorp perfidy. It noted that Shale’s family home was ‘a short drive from the homes of Rebekah Brooks, the chief executive of News International, and Elizabeth Murdoch, a board director of News Corp’. Nobody wants to see Murdoch in rags more than I, but this was overdoing it a bit. Cue revelation in tomorrow’s Guardian that Becky and Liz were seen behaving suspiciously around the VIP portaloos early this morning.

These days, just the words ‘dead in toilet’ are suggestive of drugs. Given that Christopher Shales expired at the Glastonbury festival, I must confess this was my first thought…..especially as rumours have been around for some time that several powerful media Tories of a West Oxford persuasion are fond of tooting the talcum of a weekend.

We’ll know more tomorrow. But it looks like nothing more than a medical, genetically-inherited tragedy.

————————————

For a few minutes off and on this evening, I’ve been thinking that there might be a glimmer of hope in the bank exposure v debtors v EU nutters stand-off. I read in the Wall St Journal that the top 3 French banks have proposed a plan to reinvest half the proceeds from maturing Greek government bonds into new Greek long-term bonds, provided they can be free to invest 20% of the totals  in ultra-safe (ho-ho) French gilts.

It’s an ingenious idea, in that it offers Athens a sort of 30% haircut devolving into a 50% haircut, but without anything concrete that the debt ratings agencies could call a default. And necessity is the mother of invention, as without such a plan, the French banks would be in one mother of a mess. Further, as this is the banks’ own idea (allegedly) there is no element of compulsion for Trickey Trichet at the ECB to get uptight about.

But it may not even be this simple. I’m told that anything you agree to which could be construed as ‘not in your interests’ can be regarded as compulsion by the ratings agencies. Given not being able to do this might sink the banks, I’d call the deal compelling rather than compulsion….but what do I know?

Anyway, buying 30 year bonds in Greece might also be classed as evidence of insanity. Plus, of course, this is only more can-kicking: the plans for Greece assume economic growth (yeh, right) and selling unsaleable assets in double-quick time. A year down the road, the Greeks will simply owe more, the banks will have only partly deleveraged, the repayments will be behind schedule again….and because of that, the bond yields will be a thousand per cent or something equally potty.

Neverthless, an important principle has been established: that some debt forgiveness is in order, of around 30% , for Greece. All we need now is some global reality about 70% forgiveness for everyone, and we’ll be out of the woods.