Tuesday, 30 June 2009

The ONS has just published its quarterly GDP "growth" figures. Growth was -2.4% in Q1of 2009, and -4.9% down on the same quarter last year. Here's a chart...



Dire, isn't it? The Beeb reckons we haven't had it this bad for 51 years. As a measure of how good the Bank of England is at forecasting look at this graph they published back in February this year.



We're now in the outer fringes of their worst-case scenario.

Links:
A previous post
ONS
BBC

Put 2159 in your calendar

Because that's when Bernard Madoff will get out of jail. He'll be 221 years old.

Of course he may appeal against his 150 year sentence.

Monday, 29 June 2009

Labour steal BNP clothes

We're all used to Labour stealing Tory clothes. The Tories are so used to it they are reluctant to publish any policy except under the pressure of an imminent election - they know they'd be seeing their ideas under a Labour logo pretty soon.

But Gordon Brown is now swiping BNP policies; well trying to anyway. First it was "British Jobs For British Workers," which would go down well at any BNP gathering, and today we have "British Houses For British People," in which "local people" will have a higher priority on public housing lists.

It has long been a source of anger to the BNP-voting classes that they languish for years on housing waiting lists and along comes Johnny-Foreigner, leaps the queue, and is ensconced in his own house PDQ. Of course Johnny-Foreigner doesn't have any legal priority; it's all decided by points, and children are worth lots of points - and strangely J-F often has quite a swarm in tow. This doesn't prevent a lot of gnashing of teeth among the less prolific Brits being pushed to the back of the list.

However, although Gordon steals BNP clothes, he never quite puts them on. British Jobs For British Workers never actually happened - no legislation was enacted to effect change on the ground. We wait with baited breath to see if British Houses For British People fares any better. I suspect it will never actually happen.

Link: BBC

Inflationists vs deflationists

The UK base rate is currently 0.5%. The question is: how long will it stay this low?

The markets are pricing in 2.5% by the end of the year. And yet various commentators are pointing out that there are deflationary pressures in the economy (job loses, commodity gluts) and so no reason why the BoE couldn't keep the base rate at 0.5% for years to come. In the past, eg the 1930s-1940s, the base rate has been kept very low for decades - although never as low as 0.5% it must be said - and there was a world war on for part of that time.

But on the other side of the equation the UK is having to offer higher interest rates to sell its debt. Gilt yields are now on 3% (approx). The Americans are also finding they need to increase the "insult" to place their debt.

The economic world is now divided between the "inflationists" who think printing money will cause price inflation, and "deflationists" who think the global recession will make prices fall.

Ironically this low base rate is not actually doing any good to the economy. It has not filtered through to the consumer. Mortgage rates for new borrowers tend to start at around 5% - and can be has high as 7%-8% for those with little equity. These numbers are consistent with a base rate of four or five percent. The margins are nice for the banks but useless to the rest of us. On the flip side savings rates are abysmally low.

Most likely the "real" reason for the low base rate (and let's not forget CPI is STILL above target!) is that the government is simply trying to keep its debt costs down so the binge spending can continue.

This blog takes the view that current monetary policy is storing up inflation for the future. And guess who agrees? The Bank of England's own pension fund has moved 70% of its assets into RPI-linked gilts. They seem to be expecting inflation.

Link: Report

Gazprom haven't really thought this through

The Russian oil giant Gazprom have a new joint venture with Nigeria.

Russia's energy giant Gazprom has signed a $2.5bn (£1.53bn) deal with Nigeria's state operated NNPC, to invest in a new joint venture.

The new firm, to be called Nigaz, is set to build refineries, pipelines and gas power stations in Nigeria.

Nigaz! How did that get past the marketing department?

Link: BBC

Thursday, 18 June 2009

Rumours in the Irish bond market

This is "rumour", hence no links.

Some say that all the bonds issued by the Irish government are being bought, on the orders of the Irish government, by nationalised Irish banks which wouldn't otherwise touch them, and then the bonds are being placed straight into the European Central Bank's Special Liquidity Scheme.

Or to put it another way: German taxpayers are funding the Irish debt binge.

They may not be happy when they find out where their money went.

The wheels are coming off the budget

Back in April, Alistair Darling presented to Parliament a budget in which he stated he would need to borrow £175bn net for the 2009/2010 financial year. Borrowing in April was pretty much in accord with this estimate.

But then in May he borrowed a net £19.9bn.

Yikes! Multiply by 12 and you get almost £239 billion - that's a £64bn over-spend compared to the £175bn in the budget.

We'd better hope that May is some kind of weird, exceptional month. If not the economic outlook is dire.

Link: BBC

Muslim demographics

Friday, 12 June 2009

Massive bond seizure in Italy

Let's start Friday with a story from the weird files. Italian police have stopped two Japanese gentlemen trying to cross into Switzerland with US$134.5bn (yes, billion!) worth of bonds in their possession.

$134,500,000,000


The bonds show every sign of being genuine! It is illegal in Italy to import or export more than 10,000 euros worth of financial instruments including currency without prior permission. This is an anti-money laundering measure.

If the story is true - and it's not currently being reported by the major news organisations so some scepticism is called for - then two possibilities exist:

1/ This bonds are real. In which case they are most likely not stolen since that would have been major news. So were the two Japanese gentlemen acting on behalf of the Japanese government - lawful holder of a vast amount of Uncle Sam's debt? Perhaps Japan is "exiting the dollar" covertly.

or...

2/ The bonds are fake. Some of them are apparently bearer bonds dating back to the Kennedy era and might actually be redeemable if the forgery is good enough. In this case Bernie Madoff has just been deposed from his "biggest criminal ever" throne.

It will be interesting to see how this one pans out.

Links:
Asia News
Karl Denninger

Wednesday, 10 June 2009

The Sun is worried about a BNP government

The Sun today is so worried that a future BNP government would decimate Rangers FC by deporting its ethnic players that they've published a picture with the missing faces painted out.


The Sun has largely missed the point that the BNP would not deport any lawful immigrant. Meanwhile a nationalist who shall remain nameless has illustrated the flip side of the coin...



Enough said, I think.

Link: Sun

Monday, 8 June 2009

Euro 2009 - Results

So the results for England are in. (Scotland and Northern Ireland will report today.) And it's pretty much as I anticipated in my previous post. This BBC article seems to capture the mood...

Nick Griffin, MEP: Victory!


Two BNP candidates were elected, the Chairman Nick Griffin and Andrew Brons a long time nationalist. The final results didn't come until 2am this morning due to voting being very close indeed in the North West region.

UKIP have their expected triumph, however the BNP breakthrough has happened. With the platform they now have it should be possible to put the party's agenda much more clearly to the public and counter the nazi/fascist/racist nonsense in which the media delights.

Thursday, 4 June 2009

Voting today - I'm calling it

OK, so it's 1pm on June 4th 2009, and today we're voting in the Euro elections and some areas are voting for their local councils as well.

I reckon the Euro results are likely to be as follows:

Labour: wiped out
Lib Dems: Small gains
SNP: Big gains (Scotland only)
Tories: Doing very well, thank you.
BNP: Breakthrough, 10% of the vote or more.
UKIP: Fantastic result, surpass all expectations.

The locals will be the same but with less dramatic swings to the minor parties.

Wednesday, 3 June 2009

The government is disintegrating

This morning Hazel Blears, Communities Secretary and MP for Lilliput (alright, Salford), resigned from the government. This follows Home Secretary Jacqui Smith's indication yesterday that she is also leaving. Blears seems to have aimed for maximum embarrassment for the Prime Minister - contrary to normal practise her resignation letter did not praise the PM at all, and she timed her resignation to just before Prime Minister's Questions so he would be given a mauling by Cameron in the Commons; which he duly was.

Rumours abound that a couple of other ministers, including the ill-starred Caroline Flint, currently Minister for Europe, will resign in short order. Possibly they are just waiting for PMQs to be over and will just go this afternoon.

Gordon Brown is starting to look isolated - and for him that's not a good look.

Some links:
BBC 1
BBC 2

Tuesday, 2 June 2009

Cheekiest MP: Shailesh Vara

Meet Shailesh Vara, whom I hereby nominate as the MP with the most barefaced cheek.


Vara, Conservative MP for North West Cambridgeshire, was elected to parliament in the General Election of May 2005. During that year he submitted an expenses claim for £22,600.51 - not vast compared to other MPs you might think.

But Vara's claim to to the Cheeky Boy title comes from the fact he sought reimbursement for expenses incurred before he was an MP!

I'd write more, but I'm putting together an expenses claim for the fees office at this very moment.

Link Daily Telegraph