Thursday, 19 October 2017

May's Brexit Weakness, Corbyn's Strength

Some very interesting developments at the Brexit negotiations farce.

As we knew all along, the October Hostage Deadline will come and then go.  Well, who was ever going to sign up for "whatever amount you say it is, Monsieur Barnier" in order to move forward?  So now, according to the well-briefed Graun (which has faithfully taken dictée from its euro-source):
European Union leaders seek to publicly talk up [May's] efforts in the Brexit negotiations because they fear that the prime minister’s domestic weakness will leave her unable to make vital concessions on Britain’s divorce bill ... The member states are acutely aware that the prime minister needs to come out of the summit with her dignity intact if she is to get her cabinet and party to accept concessions on the divorce bill ... the instability of the British government makes it vital for them to soften the blow for the prime minister, who will need to take the political risk of further major concessions on the financial settlement in the weeks to come ... EU’s collective hope and expectation is for a deal in December, but diplomats insisted this need not be the end of the road. “If not, no one will be ready to throw in the towel, but we will be ready to think of another milestone, another threshold of time to move on.”
How charmingly considerate of them.   Another milestone, another threshold of time.  Another hostage deadline.

It's certainly true May is a hopelessly weak negotiator, as the awful Hinkley incident showed everyone all too clearly last summer.  If, in a funny sort of way, this actually parlays into a bit of a dynamic with the euro-wallahs, well, that's where we are anyway.  Perhaps ... perhaps they don't much like the thought of McDonnell either.  Why would they? - he's really hostile to the Lisbon Treaty, much more than (for example) I am.

Which brings us to the other development, which is that Corbyn is on euro-manoeuvres.  Well of course he is - or rather, the euros are on divide-and-rule manoeuvres.  Of course.

In principle there's a prize for them here, but (equally, in principle) a problem.  Nothing could be neater for them to arm Corbyn for a struggle that might end in (e.g.) a big enough revolt in the Commons for Brexit to founder.  The trouble is, Corbyn (or more cogently, McDonnell) wants the freedom to nationalise / selectively ban cheap immigrant labour / ignore property laws etc etc.  So the gameplan has always looked like: let the Tories do all the heavy lifting, and sweep to power in 2022 with a working majority and no EC / ECJ to worry about.  Five years to dismantle the armed forces / security services / NATO etc etc ... what joy!

So - no deal to be done between Corbyn and the EC?  Unfortunately, this is where Drew's 4th Law of Politics cuts in:  The lines of logistic in politics are short.  Nothing could be easier than to tell Jezza the Jejune over lunch that he can have his nationalisations and selective migration ban, in return for engineering a Commons defeat in coordination with a couple of pre-planned one-twos at the negotiating table.  Nothing in writing, mon cher Jérôme - but that's the way things are done, we know you'll understand.  Of course, we'll be asking you to join the Euro-defence force, and hand over GCHQ to us - but you never really wanted to get involved with all that stuff anyway, did you?  So much safer with us ... oh, and your seat on the Security Council, such an anachronism ...  yes that's right, you could raise taxes as high as you like!

Yep, that can happen in 20 minutes.  Doesn't mean they like him.  Doesn't mean they'll deliver on a word of it!  But it can happen.


Wednesday, 18 October 2017

This Is One Smart Belgian

You'd kinda expect to hear more about this
The wi-fi connections of businesses and homes around the world are at risk, according to researchers who have revealed a major flaw dubbed Krack. It concerns an authentication system which is widely used to secure wireless connections. Experts said it could leave "the majority" of connections at risk until they are patched. The researchers added the attack method was "exceptionally devastating" for Android 6.0 or above and Linux
Presumably (if it's for real), the www & banking industries are in utter shock, as well they might be.  As well might we all.  As usual, the bigger the issue the less attention it gets...  

A sounds like a pretty thoroughgoing *patch* will be required.  A massive kick in the nuts for a priori reasoning about what's "mathematically proven" to be secure.  Safely encrypted?  In the real world, there's always a flaw!  No limits to human ingenuity - "what one man can invent, another can discover"  (S.Holmes, 1903).

It's worth taking a look at the lucid write-up** by Mathy Vanhoef, the bright Belgian who discovered the mighty cockup.  That is one articulate geek!  Beautiful prose on a complex topic in what, presumably, is not his mother tongue. The whole thing reads like the remarkable Enigma exploits of Turing, Tutte et al at Bletchley Park

If only all technical issues had such excellent advocates, eh?  (Bit of a coincidence, the timing of that cartoon).


** in the original version of this post I linked to Vanhoef's 'KrackAttack' website.  Subsequently, McAfee has started warning about that site!  Who knows what to think?!  But I've removed the link.  There are plenty of places around the www where you can read Vanhoef's fine prose.     

Tuesday, 17 October 2017

Still no news on Brexit or interest rate rises...

It is both surprising and unsurprising that there is no movement on Brexit.

It is not in the EU interest to concede having set the field of battle on their terms, the longer they play hardball the harder the battle for the British to win.

Having said that, it is amazing that the Government is still struggling with strategy and tactics having taken to the field over 6 months ago. Everything that has happened was utterly predictable, indeed, the EU have simply stuck to their announced position.

The only two ways out are a capitulation by the UK on money and ECJ (read immigration) that leads to a Brexit in Name Only deal - really a lot of effort for no reward or a real move towards a 'no deal' type scenario where we just focus on stuff like how customs borders are going to work and how we keep the planes flying etc.

I don't see the civil service or the MP's/Lords allowing the latter so BINO it is at the moment. Which will amount to the most colossal waste of time ever!

Meanwhile, the Bank of England observes inflation at 3%. Thank the Lord it must be saying, after all no one in Government is planning to start living within our means anytime soon to inflating away the value of all those non-indexed UK Gilts is all part of the plan. The fact that wages are still shrinking is just a side benefit. Oh, and the oldies will do better again with higher interest rates than the young-uns with mortgages - what a blinder of a play. best leave them on hold for now, no point rocking the boat then...

Saturday, 14 October 2017

Tory Trainwreck: A Modest Insight

Much as I try to banish negative thoughts at the weekend, it is pretty hard not to catch oneself musing on the unedifying spectacle of senior Tories participating in the slow-motion trainwreck that is Theresa May's decline and fall.  What good do they imagine will come of their bitching and backstabbing?  Is it not weakening the Brexit negotiations?  Are they not conscious of the prospect of handing over the whole shop to the marxists-in-waiting?  Can they not imagine what irreversible damage could be wreaked by McDonnell in just a year?  Who would wish to go down in history as being instrumental in that?

Then something came back to me: perhaps obvious, but (IMHO) enlightening in its stark simplicity.  Years ago I came across a quotation - that inevitably I now can't find** - from a senior politician of the 19th(?) Century which ran roughly as follow:  to be Prime Minister of Great Britain for even a single day!  Did ever a Roman emperor of old wield even one tenth of the power? 

That captures a particular world-view rather neatly, and it occurs to me that the problem resolves to this: there are enough shameless politicos for whom it is their one and only guiding light, so that they will risk any amount of collateral damage to achieve it.  So what if it lasts only a month?  That it ends in utter catastrophe?  That their name will be dirt forever?  They will have had their 'single day'; and that reviled name will at least forever be on the roll of Prime Ministers of Great Britain.

It's even better (or worse) than that.  There is so much time before the putative 2022 GE, they might get hundreds of days!  And in such a long time, Something May Turn Up!  It's a no-brainer - what's not to like?!

The will to power (© F.Nietzsche 1883) is so powerful that for people like this, no further details are required.  As Robert Redford's newly-elected President asks in the closing sequence of The Candidate:
"What do we do now?"  Then the media throng arrives to drag them out, and he never receives an answer.

 ** a small prize for anyone who can turn it up

UPDATE:  reader Carl Edman has turned up the quotation
  - it was Melbourne,  see comments below.  Good man! - he can come again.

Friday, 13 October 2017

A copper-bottomed bet?

It's been a bloodbath for many years in the commodity sector. Many shirts have been lost (a few of mine even, tear-stained ones...). The price of oil is normally one of the key metrics along with gold for assessing asset inflation.

However, gold is only around $1300 an ounce, which whilst double the 2008 low is a long way off the $2000 plus highs. In fact, there has not been much movement in gold at all this year, as compared to say Bitcoin which is rapidly taking shape as the future of independent store of value.

Then we come to oil, off its $30 lows of the post-shale revolution, but still only around $50 a barrel and that is after some small, but actual, production cuts from OPEC. The supply side still looks strong though and this at a time when global non-recessionary GDP growth is de-coupling from the oil price/supply for virtually the first time in a hundred years.

Which leads one to look further afield and this for me is to copper;

Copper looks interesting, the world's biggest miners have been struggling with various geopolitical events and supplies are not increasing that rapidly. The building of China still is eating capacity but the new found desire for electric vehicles also implies a long-term demand surge for the metal that is the core of the electricity transmission industry (of course, Lead/Lithium are looking good too). So demand is growing whilst supply is relatively flat.

I wonder if long-term there may even be a good long/short bet on copper versus oil as the switch away from petrol and diesel cars takes hold over the next five year?