Wednesday, 27 May 2009

A fistfull of Lati

It's High Noon; the sun sears down on a dusty street; women and children have scurried to safety; tumbleweed rolls between two gun-slingers as they stare each other down through slitted eyes; hands twitch inches above the six-shooters.

Yes, folks, the IMF and the Government of Latvia are duelling for control of the Latvian economy. The IMF has already handed over a 7.5bn euro loan and wants 40% spending cuts before it will fork out more. The Latvian government is desperately defending its currency - the Lat - as it strains against its euro peg. Short-term interest rates are up near 14% while the economy is shrinking at 18% a quarter. The Central Bank has spent a third of its foreign currency reserves buying Lati to hold up the value and the IMF wants the rest.

It's Argentina all over again. Who will blink first? Whatever happens, the vultures will feast.

Thursday, 21 May 2009

UK credit rating has negative outlook

Further to my post almost exactly a month ago regarding the UK's "perfect" AAA credit rating, Standard & Poor has now put HMG on "negative outlook". We are now AAA/A-1+. Negative outlook is a step down from "stable" but not as bad as "negative watch".

So there's the path if the government doesn't pull its finger out: negative watch and then we lose the triple-A.

Needless to say sterling sagged and CDSs spread on the news. (CDS = Credit Default Swap, effectively the cost of insuring our debt.)

Like I said in a previous post; really I'm just documenting the decline here.

Wednesday, 20 May 2009

The BBC are playing a dangerous game with Esther Rantzen

The BBC seem to have taken it upon themselves to put their own woman into Parliament.

In the wake of the expenses scandal, Esther Rantzen, a long time employee of the BBC, in fact one could almost say a lifetime employee of the BBC, announced that she "might" stand as an independent parliamentary candidate for Luton South, currently the constituency of the disgraced MP Margaret Moran (Lab) who has claimed expenses on a house she doesn't live in, which is neither in her constituency nor London.

Esther Rantzen: BBC

When Esther Rantzen made the jump from journalist to politician the BBC should have dropped her like a hot potato. Instead she has been given prime time exposure the like of which any other "wanna-be" politician could only dream of. She was on Newsnight the day she announced her tentative foray into politics and news programmes have been following her excursions into Luton, giving her unwarranted exposure and a decided advantage over other candidates. The BBC's political neutrality is severely compromised.

At the same time the BBC has been raising the profile of the English Democrat Party. This well-meaning, but very small, party promotes a degree of English devolution from the United Kingdom. In recent days the BBC has covered their activities to a far greater extent than it is covering larger minor parties such as the Greens, the BPP and the BNP.

The motivation for this sudden interest in minority politicians seems to be as follows. The public is disgusted with all the major parties for their porcine attitude to public funds and looking for someone else to vote for who will come in and clean up the mess. The usual suspect for this role is UKIP. However, the UKIP leader, Nigal Farage has recently let slip that he has claimed £2 million in expenses as an MEP. Although the BBC has carefully refrained from reporting this nugget of information it seems likely that UKIP will implode when it becomes widely known.

Nigel Farage: £2 million

That just leaves the BNP as party of choice for protest voters. The BBC hates the BNP and is desperate to promote an alternative, hence their flailing around looking for someone else, anyone else, for the public to use as a vent for their fury. The BBC does not report the BNP if it can at all help it. It doesn't want the public to know what the BNP stands for. As an illustration, BNP politicians are never invited onto programmes such as Question Time although other small parties, eg the Greens and even the Monster Raving Loony Party, are.

Ironically, the BNP is very much in favour of public service broadcasting. They don't think getting all your news from the likes of a Rupert Murdoch or a Conrad Black or even the Barclay Brothers (not suggesting that Rupert or the twins have ever done anything criminal here!) is a good idea. In a democracy, free citizens need an unbiased source of news. That should be the BBC. Sadly, at the moment, it is not.

Daily Telegraph
Nigel Farage's expenses

Tuesday, 19 May 2009

Mr Speaker is going

Well, that was short and sweet. A few minutes ago at 2.30pm the Speaker stood up, announced he will "relinquish" office on Sunday the 21st June and a new Speaker will be elected on Monday the 22nd.

And then they proceeded with questions to the Foreign Secretary.

So now we have a whole month to choose a successor.

Inflation in April

April's inflation numbers are out, if you're interested.

CPI: +2.3% (+2.9% last month.)
RPI: -1.2% (-0.4% last month.)

So CPI is STILL above its 2.0% target, and no, the BoE isn't going to do anything about it, so just suck it up as they say in the US Marines.

RPI may look "good", but RPIX (excludes mortgages) is +1.7% and don't forget we still have the oil price collapse in this number.

Link: ONS

Mr Speaker must go

Yesterday Parliament gave its Speaker, Michael Martin, member for Glasgow Springburn, a mauling. He stood up to make a statement about MPs' expenses and while he was bumbling his way through reading the statement was hit by a barrage of spurious points of order - almost all of which called for him to resign or retire.

There was a motion calling on him to step down. Mr Speaker seemed to think it was an "Early Day Motion" on which no vote would take place. Various MPs stated that it was a "Substantive Motive" on which a vote must take place. The Clerk of the House explained sotto voce to the Speaker that it was a Remainder Motion not on the order paper and so no vote was required unless the government chose to move it onto the order paper.

Even if we disregard his part in the entire expenses scandal, Michael Martin, having been Speaker since 2000, should know the difference between various types of motion by now. He's an embarrassment; he should go.

Monday, 18 May 2009

"Ayo Gurkhali"

The Gurkhas are topical - so perhaps a few words are appropriate.

The "Ayo Gurkhali" title means, "the Gurkhas are coming" and is part of the Gurkha warcry, and curiously apt since it seems the Gurkhas want to come and live in the UK. The complete "cry" is: "Jai Mahakali, Ayo Gurkhali" which translates as, "Glory be to the Goddess of War, here come the Gurkhas!"

In fact all post-1997 Gurkas are allowed to live in the UK since our one remaining Gurkha regiment is based here. Prior to 1997 they were based in Hong Kong and did not have right of abode in the UK.

The Gurkhas have a special place in British hearts and their demand to live here, lead by their champion Joanna Lumley, has been very popular, and the government very unpopular for opposing it.

However, let's be dispassionate about this. The Gurkhas, orginally from Nepal, are mercenaries: they fight for several nations including the UK, India, Malaysia and even the US navy employs a few. No-one doubts that those few Gurkhas enlisted in the British army develop a strong loyality to the British nation and crown. This loyalty can make British people sentimental towards them; we feel an innate urge to reciprocate.

Gurkha soliders receive a pension which assumes that around age 35 they will leave the army and retire to Nepal. It is extremely generous by Nepalise standards although it would be inadequate in the UK.

The Gurkhas knew the deal when they enlisted and should not expect a more favourable deal now. That said, anyone who has risked his life in the defence of Great Britain is owed a debt of honour by the nation.

This means, ironically, that the government's position that those Gurkhas injured or decorated for bravery during their service may settle in the UK but the others should retire to Nepal seems reasonable.

Probably the best way for the government to deal with the Joanna Lumley "problem" would be to recruit Diana Rigg - she was a better "avenger" anyway!

Shaid Malik : "Justice" minister

Shahid Malik was the first muslim to hold high office in a British government.

Last week his career ended in ignomy as he was found to have abused the generosity of the British taxpayer by claiming, amongst other things, £2,600 for a home cinema system and £730 for a massage chair for his London home - under rules which stipulate that only expenses necessary for his work may be claimed. Over three years he claimed £66,827 - the absolute maximum possible.

Shahid Malik and Tahir Zaman

Although he claimed his London home as his "second" home, his first home in his constituency of Dewsbury in North West England was a house rented for a less than market rate from his friend the convicted slum landlord Tahir Zaman, which in fact appears to be occupied by someone else entirely.

One of Malik's cheekier expense claims was £65 for a court summons for not paying council tax.

Malik may be seen in this YouTube video anticipating the muslim takeover of parliament.


I think it's fair to say we do not need his ilk in our government.

Daily Telegraph

Friday, 8 May 2009

A guide to expenses for MPs

Just for the convenience of any MPs who don’t understand the system I thought I’d produce a quick guide to how expenses are claimed.

The under £250 rule: If the expense is under £250 no receipts are required and you can put in as many of these claims as you like provided you claim they are necessary to your work. For example you can “employ a cleaner” on £241 a month, every month, and no-one will ever check the paperwork.

The second home rule: Whichever of your houses is the largest and most expensive must be designated as your “second” home – all the costs of running it, including mortgage payments, are then claimable.

Moving house: Whenever you move into a new house you can claim the costs of installing new kitchens, bathrooms and full redecoration. When you sell the house you can pocket the increase in value from all these improvements. Remember: you can move house as often as you like, four times a year if you want.

The grace and favour home: If your government job comes with a central London government home, usually with staff and a nice wine cellar, this is free to you, and tax-free as well – it doesn’t count as a benefit-in-kind like it would if someone else let you use their house.

Over-charging: Say you’ve got a large regular bill like your council tax, bung in an expenses claim and you’ll get paid regularly. If that bill then goes down by 50%, for example because you tell the council the property is empty, just keep pocketing the difference.

And most important: make sure you’ve used all your annual allowance by the 5th of April each year, and then start again on the 6th.

Link: Telegraph

Tuesday, 5 May 2009

Baroness Uddin

The revolting specimen above is Baroness Uddin. She is a peer of the realm and a chancer of of the first degree. She was ennobled by Tony Blair in 1998 for no obvious reason. She lives in subsidised social housing in the London Borough of Tower Hamlets but, because she owns a flat in Kent, is entitled to claim an attendance allowance of £174 per day at the House of Lords.

As well as her daily allowance at the Palace of Westminster, Uddin has two jobs: one at the Home Office and the other with the philanthropic wing of insurance giant Zurich.

The flat in Kent, despite being her "main residence" was until recently unfurnished and largely unvisited. One could speculate that her whole purpose in buying it was to allow her to claim the Lords' attendance allowance.

Considering that she is a public figure and a "working peer" Baroness Uddin would seem to lack public spiritedness; in fact she could give lessons to a swamp leech.

Evening Standard
Daily Mail

Friday, 1 May 2009

Watch that debt grow at the DMO

Over at the UK Debt Management Office website you can see a calendar of gilt auctions and the amounts raised. Link: here.

Today is the 1st of May, so a good time to check on how our debt grew in April - the first month of the government's financial year. A quick totting up shows they sold £18,637,000,0000 worth of gilts in April.

Multiply that by 12 and you're up to £223bn which is well on track to raise the £220bn they will be needing this year; that's £175bn to cover government over-spend plus £45bn to replace gilt bonds reaching their maturity, ie debt roll-over.

In the auction results you can see how much was actually paid for the bonds; usually slightly more than their nominal value. It's when buyers offer less than the face value, or just don't bid at all, that things get interesting.