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I must say that one of the few gratifying aspects of the current financial turmoil has been the way in which one of the UK’s biggest banks, Barclays, has decided to spurn any offers of help from the UK government – ie, the UK taxpayer – and raise funds from mostly private investors. In its recent raising of about $12 billion of funds to improve its capital position, Barclays made it clear that it wanted to stick with funding via the commercial market because, if it had drawn on the UK state moneys that have been provided for the likes of Lloyds TSB and Royal Bank of Scotland, it would lose its freedom to set pay, among other things.
Now, free market purists may object that the Middle Eastern funds that have pumped cash into Barclays are not entirely private sector organisation and of course they have a point. But the fact is that as a taxpayer, I haven’t been asked to write a checque to Barclays, in contrast to other UK banks. Barclays has also kept its affairs away from the hands of such characters as Alistair Darling, the UK finance minister. Those banks which have taken state aid face the risk that the confidentiality of their clients, especially in the wealth management area, could be compromised. Of course, even before 9/11, banks have been required to compromise on secrecy due to things like money laundering laws and the like. But there is no doubt that once a bank becomes an arm of the state, such erosions of client confidentiality that have already occurred will increase.
And the reaction of certain parts of the media has been interesting. On Friday evening, the BBC economics correspondent, Robert Peston, told us in that extraordinary voice of his how Barclays shareholders would be penalised by having to pay a higher amount to obtain funding than if they had, like good little corporatists, gone along to the UK Treasury. Peston, as a corporatist himself and creature of New Labour, cannot fathom why a bank wants to stay out of the public sector. Barclays’ executive bonuses may be “obscene” as far as Peston is concerned, but at least Barclays avoided some of the worst excesses of the credit boom. It is, as a result, relatively strong as a bank. Barclays must be thankful that it lost a merger battle to buy ABN Amro last year. If its refusal to eat from the state table annoys BBC journalists – who of course are paid out of a tax – then the bank must have done something very right. One cannot exactly say that of a lot of banks these days.
Dizzy, of Dizzy Thinks fame, recently made an interesting prediction, concerning the attitude of Brits towards the USA:
If Barack Obama becomes President-Elect next week, don’t expect any of the snide anti-american Brits, Aussie and others to change their tune. They’ve had a hate figure in Bush for the past eight years, and I don’t doubt that Barack Obama will become an equal hate figure within a short amount time.
I do doubt this. I think that much anti-Americanism is really anti- a particular part of America, and this hatred is felt with equal strength by other parts of America. President Bush, after all, is not only hated in Britain. Many Americans hate him too. And Obama is from a very different part of America to the part that gave us President Bush. Obama is from one of the parts that hates President Bush.
I recall the Clinton years. Had the (very large) part of Britain that now hates Bush wanted to hate Clinton, it would have had at least as much to work with as it has had with Bush. But it didn’t want to hate Clinton, and it didn’t. Likewise, it won’t want to hate Obama, and it won’t.
Well, we shall probably soon see.
Snow in London last night. The BBC news report I just watched (having come home past the BBC’s television studios which were covered in the white stuff) mentioned it on the East coast of England, but no mention of it in London.
For those not familiar with London weather, the last time I can find when snow was even claimed here this early in the autumn was 1974. One eyewitness suggested it was really hailstones. I don’t remember. All I know is that today, October 28 2008 is the earliest proper winter that I can record.
Now here’s where it gets interesting. Only a few weeks ago, we were hearing that South Africa had snow, and not just that, but of the very late variety (South of the Equator, this time of year should be warming). But don’t worry, we must have a flexible view of reality: when it gets hot, it’s warming; when it gets cold, it’s warming; and when it seems to stay the same, it’s warming twice as fast.
Does global warming predict the weather right now? Only in the sense that Nostradamus predicted the assassination attempt on Pope John Paul II in the 1985 edition, and the fall of the Shah of Iran in the 1980 edition.
What does predict the weather we’re having is the sunspot cycle and we can now add some idea of what reduced solar wind does. [Hat tip, Instapundit]
Here’s a somewhat better forecast of the end of 2008’s weather than anything cooked up by the “capitalism causes tsunamis” crowd. Farmer’s Almanac? Maybe astrology is more scientific than the ecofascists.
I must say I find all this global warming business to be jolly exciting.
Over a year ago, when parts of the UK were inundated by floods, I remember the Spectator’s Rod Liddle moan that one reason why the water was running off the ground and into the rivers so much faster was because of all the additional immigrants crowding into the UK at the time. (Yes, really). It was a nonsense argument: much of the worst flooding was in places like Gloucestershire rather than in London, the former hardly being a hotbed of immigration. But hey, if you are in the business of defending zero-sum economics and the “lump of labour fallacy”, not to mention hold a general dislike of foreigners messing up the view, any stick will do.
It turns out that tens, maybe hundreds, of thousands of immigrants want to go back to their country of origin because of the changing economic landscape, and may do so. So Rod and his other worriers can sleep easy. Britain is now able to breathe free (sarcasm alert).
On a side-note, I’d add that with a recession now occuring, dislike of “foreigners” taking “our jobs” is going to become an even more toxic political issue, particularly where among the low-paid, arrivals from abroad do depress wage rates, if only in the short run. But then one should consider the shocking fact that during the boom years, immigrants were taking half of the new job vacancies in the UK, despite there being a large amount of unemployment among the indigenous population, a terrible indictment of the tax and welfare system’s destruction of work incentives.
Spectator politics correspondent Fraser Nelson spots that Gordon “off balance sheet” Brown, as I will now continue to call this shit of a national leader, has devised an accounting wheeze to remove the tens of billions of public debt involved in the Northern Rock bailout from the public accounts. As a result, Brown can claim that the UK public finances are fine, nothing to look at here, please move along.
As Mr Nelson points out, Brown engages in practices that politicians are only too keen to condemn when applied by banks. But at least banks, if they try to remove certain default risks off their balance sheets, use forms of tradable insurance policies known as credit default swaps. I’d be interested to know how exactly Brown & Co. intend to hedge out the risk that Northern Rock does not return to any form of profit. This disconnect between the talk of prudence on the one hand and financial trickery on the other will, I hope, be the undoing of this overrated bullshitter from north of the border. Brown is damaging the age-old Scottish reputation for plain dealing. No wonder so many Scots want to cut loose from the UK. I don’t blame them.
Home Office plans to require registration of mobile phones (and to register the identities of hotel guests (pdf), record who calls whom and what they read online, etc …) have a familiar feel. In the Soviet Union, all printing machinery and typewriters were registered just in case they might be used for ‘anti-social’ purposes, when the people who had access to them could be tracked-down, watched and questioned.
The polls have not been kind to the dominant media narrative. Taking lessons from their coverage of Obamamania, the fourth estate puffed up and justified the representation of Brown as a political superhero, straddling the globe whilst other leaders squabbled like pygmies beneath his legs. I am not sure where the source of this hagiographic support stemmed from, but the source in part, is Brown as a personification of the nation.
The appearance of undertaking such a role allowed an orgy of headlines about how Britain as Brown saved the credit crunch. That the mainstream media grasps this story is a testament to their insecurity. It is narrative of a nation in decline: febrile, brittle, with reporters suspending critical judgement. Once the real events start to seep out, it is clear that three weeks of Broonmedia, following the distortions of blanket conference coverage, have not stirred the polls beyond some decline in the Tory lead. Perhaps the media confused Obama and Brown.
If the media are now more prone to herd behaviour due to the narrow bases of their recruitment and education, this represents a further step change in their retreat from their audiences. When they hear the same message bleating from their television, radio and newspapers, people will turn to other sources and other traditions to explain their situation.
…They would make Guido Fawkes an advisor on how to fight the next election. Of course Guido (aka Paul Staines), whom I know and like, prefers, as I and many other bloggers do, to give party politics a wide berth in professional terms. He is far more effective doing what he is doing now and obviously has a great time doing it. But as his example shows, the guy has more sense on how the Tories should go after the absurd notion of Gordon ‘off-balance-sheet’ Brown than any number of folk working in Tory HQ.
Think about it: the Tories should put up posters with the Brown comment on “no return to boom and bust” over, and over, and over. That this man, who has presided over deteriorating public finances during a relatively strong period of growth, sold our gold reserves at a fraction of their current value, raided pension funds and shafted taxpayers should be able to pose as some sort of economic Winston Churchill is a joke.
There is no “responsible” route out of recession – we need radical action to rescue the economy. We need a growth package and we need it fast, the sooner it is in place the quicker we will be out of recession.
– Guido Fawkes was underwhelmed by David Cameron’s latest speech
Corporate industrialists are frequently not keen on free markets. They are fond of order, safety, and “fairness” or “a level playing-field” – which means everybody doing things the same way they do. They like a managed world, because management is what they do. So no good comes of appointing them as regulators. Technocracy joins with bureaucracy.
Here is Adair Turner interviewed by The Guardian (perhaps in itself a significant choice of forum):
There will be more people asking more questions and getting more information than we were getting before… . There is no doubt the touch will be heavier. We have to make sure it is intelligent and focused on where the risks really are.
Translation: “We have to destroy The City in order to save it.” This is ‘risk’ as understood by a safety fanatic – one-sided, and totally unrelated to choice or to return.
We will have more people than before looking at the high-impact, systemically important firms with major knock-on effects than we did before. We will pay more than necessary to attract the correct quality of people from outside.
More than necessary? And who will pay for such artificial premiums? Whoever the FSA decides to tax or fine. It is a predatory organisation: a Self-Financing Regulatory Agency. So it wil have to find more occasions to punish and to license in order to fund more intervention, licensing and punishment.
There is no chance of a 1929-33 Depression. We know the lessons and we know how to stop it happening again.
A prime lesson of the Great Depression for most commentators has been that shutting down free trade in goods in order to protect industrial markets made the depression deeper and longer than anyone could have imagined. It stopped trade and industry recovering from the shock. That our Government is looking to blame foreign investors for our problems and is taking measures to frighten them off, and that Lord Adair is advocating, as the cure for a financial market crash, tight supervision of the surviving free markets in finance and commercial instruments, suggests the lessons have been rather badly understood. They risk stopping the financial markets recovering from the shock.
The inquest into the death of Jean Charles de Menezes today heard there were “chaotic” scenes in the police control room coordinating the pursuit that ended with him being shot dead.
A detective superintendent from special branch, identified only as Brian, said he was not even aware the Brazilian electrician had been identified as the failed suicide bomber Hussain Osman.
The officer, who was in control of administrative tasks in the control room, said: “I was certainly aware that a male had been shot. The fact that he was unidentified, from what I could gather from the room, was how it felt at the moment.”
(Guardian)
Gordon Brown claims that the expropriation was necessary because Iceland planned to default on British Icesave accounts. […]
Brown’s response? To seize the UK assets, not of the bank that ran Icesave, but of a wholly unrelated bank, Kaupthing, thereby collapsing it. Icelanders, who had been expecting to negotiate a guarantee to British depositors – eventually agreed on Monday – were stunned. They couldn’t bring themselves to believe that the leader of a country they admired would destroy their last solvent bank simply to give himself what Labour MPs have since called “his Falklands moment”.
(Daniel Hannan, Times)
At least they shot de Menezes in the head. For a business whose bank has been terminated on executive orders, the experience is rather like how I imagine it feels to drown in your own blood.
Of course if you have done nothing wrong you have nothing to fear. The government is benevolent, and always acts in the best interests of everyone. Foreigners are a threat. We must remember that. The government says so. So it must be true.
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