Monday 23 February 2009

Fisking Gordon: a Two-Finger Exercise for Monday Morning

Brown's weekend essay doesn't seem to have gone down very well, but it's still worth a couple of minutes on a Monday morning to see what's going through his brain.

Tough times like these test our character and values as a nation.
A standard Brown formulation we’ve fisked before. Read: … tests my character and values, an attack on me is an attack on us all.

I understand and share people's anger towards the behaviour of some banks. But anger on its own does not offer us a solution
I’d like to direct your anger away from myself. But, since it’s likely this won’t work, please remember there’s no point being angry.

Starting last week with RBS, we are changing the bonus system
But then again, we mustn’t be too hard on people who were trying their utmost, must we ?

Better governance of banks: their boards must have the expertise and power to challenge management
No matey, what they need is the brass stuff.

Where banks are speculating, long-term capital requirements will have to be higher.

Stroke-of-a-pen job for the FSA; always has been. So why the reluctance ? …

This should not be at the cost of Britain hosting big international banks
… ah, now we’re getting there ! The famous regulatory race to the bottom that was your principal concern for the period when you were Chancellor: how revealing that it’s still uppermost in your thinking.

We want to see loans made … to first-time buyers and those on middle and modest incomes who wish to buy their home but who have not been able to save a huge deposit …we have asked the Financial Services Authority to look at how in the future we should control new mortgages for more than 100% of house value
So, despite all the weekend spin, we are not ruling out high LTV mortgages at all.

Well, hey, we need that property-owning feelgood factor back in time for the next election -
how do you think I won the last one ?



Elby the Beserk said...

Well, to be fair to the cunt, they did say they want to see lending back to 2007 levels. Ille est - this is such fun, lets do it all over again.

Mark Wadsworth said...

... and in case you don't get the message, I've reversed our policy on Northern Rock and asked it to lend £14 billion to a hundred thousand gullible first time buyers.

Bill Quango MP said...

The comments..250+ and you would be lucky to find 10 that are positive.
Most people aren't even listening anymore. He's got that John Major vibe going where whenever he appears no matter what he has to say people think "Oh that idiot again"

randomly pulled comment..
"If GB thinks anyone will believe a word of what he has to say then he is a bigger fool than I thought he was."

And this from a friendly online.
newspaper. You could easily be mistaken for thinking he had inadvertently posted this article for Guido Fawkes's Order-Order.

roym said...

I just dont get why he keeps persevering. the abuse cant be worth it surely? and deep down knows he's leading labour to a 20 stretch.

Anonymous said...

For too many years UK companies have essentially robbed Peter to pay Paul, servicing short term profits by offshoring UK jobs, manipulating their balance sheets, and appropriating the savings of some of the world through cheaper product imports via an over-valued currency, to disguise home-grown inflation

That story is almost over.

Broons idiotic efforts to reboot the economy to 2006/7 levels is merely a repeat of the Greenspan reboot of the US economy during 2001/3, but will be more disastrous.

At some point the market will perceive that the economy is improving and that the outlook for corporate profits is positive. Stocks will reflect this about six months in advance.

Should the reboot be successful, it will be short lived, the currency will sink another 30% - 50% against gold because of increased future unpayable liabilities, equities will rise, particularly those company earnings denominated in foreign currencies, and the next crash will come in short order.

This will be felt in a further sterling deterioration.

But there will be no REAL recovery until the banking system is reformed and restructured, derivatives are neutered, (legally or otherwise), oversight becomes efficient, and the median wage begins to increase enough to support both savings and increased consumption, and this, VIA MAKING THINGS THAT THE WORLD WANTS. Please note, broon, and other fabian/communist fuckwits, that means NET DISPOSABLE INCOME must increase, NOT MORE DEBT, and a dramatically smaller government footprint.

Making additional debt available first, as a cure, is nonsensical, because the debt we have, particularly when PFI is brought into the equation, cannot be serviced and must be written off. To do so is fraudulent economics, which is what Greenspan was practicing, and why the decline has been so precipitous.

And any real recovery is also contingent to an extent on global recovery, in this scenario.

The longer we avoid making the necessary changes, the more we risk an increasing sterling descent and a very low national third world status.

The current reversal of THE PREVIOUS VERSION OF GLOBALISATION, Which involved a totally unbalance world of debtor and creditor nations that avoided currency adjustments to varying degrees, must end, - and this must happen concurrent with the success of global wage arbitrage, - and this against a background of (18 months into global recovery) rapidly rising energy costs, before anything approaching effective, moral, globalisation, can re-assert itself.

I view the chances of the latter, as slim.

Governments and the public must therefor adjust to an unexpected new paradigm of world and national trade, and world consciousness.

There is a mode of transport however, at laboratory stage, not quite patented, suppressed by a particular government that could...........

Old BE said...

Wouldn't it be nice to have that Blair back?

Anonymous said...

I read the article and a page of the comments. Brown's delusional.

The property bubble has to deflate and a lot of people will be hurt and angry. In fact, the whole debt bubble has to deflate.

Maybe he hopes the worst of the falling shit can be put off so it lands during the Conservatives' watch.

Nick Drew said...

anon - thanks for the comments. I am particularly interested in the PFI endgame

cosmic - welcome

EtB, MW, BQ, RM, BE - it really does make you wonder why he soldiers on, doesn't it ?

not an economist said...

"We want to see loans made … to first-time buyers and those on middle and modest incomes who wish to buy their home but who have not been able to save a huge deposit …we have asked the Financial Services Authority to look at how in the future we should control new mortgages for more than 100% of house value."

I think this suggests that he still doesn't understand that it was the political desire to increase home ownership thru the manipulation of interest rates that sparked the boom that has ended so badly. Its all very well blaming bankers ad nauseum but it was the loose monetary policy followed by worldwide central banks (including the BoE) that allowed them to make the errors they made.

Then again does Cameron understand this more so than Brown or are they just as bad as each other in this regard....?

Anonymous said...



Why does Brown continue? You must have seen people soldier on in jobs in which they've failed completely, but where they can't be fired easily. They just can't confront the reality of how bad things are so they shut it out and go through the motions.

Think of Hitler ordering non-existent divisions into battle.

Anonymous said...

I like to think of how hitler ended his life!,


I never voted for broon, nor for anyone in his party.

But I doubt that anyone who did vote for nulab ever imagined that their mandate would be interpreted as permission to raise taxes, crush the currency, and consign this country to an economic backwater, such as these actions will guarantee.

Broon is sacrificing the nations economic and social future for the remote possibility of an upcoming election win.

History will view this action as criminal, even more-so than we should be viewing the bank directors actions over the previous few years as criminal, likening it to the slash and burn of a retreating medieval army.

Every minister, every senior civil servant, and every government employed economist is culpable, as this event was entirely predictable.

The tragedy is that broons lunacy is adding, by several magnitudes, to the problem.

We are not a commodity exporting nation, our currency will not rise when global trade begins to resume.

Bi-lateral trade arrangements now being made around the globe, in order to avoid the involvement of the $ as a medium of exchange, should they proceed at the current speed for any length of time, will quickly reach a point where the establishment of global prices for trading certain commodities is impossible. This becomes very dangerous for efficient price discovery, even more so than current practices, where the strength of US banks in the futures markets allows for the (gross) global manipulation of certain commodities for US/Federal advantage.

The CFTC is so sublimely corrupt (with oversight looking the other way) that this just had to happen as a consequence. Sadly so. I also, lately, begin to mistrust the twice daily LBMA opaque price setting activities.

However, the FT100 is littered with extraction companies dependent on established global prices for their products. Should the above persist, UK pensions, etc, could be heavily affected.

Nick Drew said...

NOE - then again, does Cameron ...?

It is becoming increasingly likely that we shall find out !

cosmic - you must have seen ...

yes, I have: but I've also seen people self-destruct. Can't quite call it with Brown - have discussed his pathology here. He's obviously medicated up to the eyeballs (I decline to make the parallel on this with the other Leader you mentioned) and I could just imagine him imploding.

You have to reckon Sarah is in a pretty powerful position: she who controls the medicine cabinet ...

Mark Wadsworth said...

@ NotAnEconomist, I don't think that Camerosborne understand it either.

While the Tories whine and moan about the cack-handed manner in which Labour are 'helping hard pressed home-owners' or 'getting credit flowing' they do not seem to be querying the underlying 'logic', to the extent that there is any logic to all this in the first place

Nick Drew said...

anon - we've been covering Brown's scorched earth strategy on and off for 15 months now

CFTC: interesting. I mentioned the other day that Enron undermined the CFTC as regards energy trading, using Sen. Phil Gramm, (husband of ... Enron Board member Wendy) Also, the FT (Aplhaville) has been running a series recently on why WTI is no longer a reliably representative pricing-point for N.American oil

The LBMA has always been a mystery to me - but then again, the LME is a bit quirky, too; and price-discovery comes in many different forms. Do you have any specific issues ? When it comes to commodity pricing we at C@W are always interested ...

Elby the Beserk said...

Nick et al. Brown has clearly got a personality disorder. Sadly for us, rather than inflict it just on his nearest and dearest, he's decided to take it out on the all of us, especially the English.

Bill Q. If it is possible, both of Blears most recent CiF articles were even more savagely dismembered.

1997 was a silent putsch.

Demetrius said...

There is a new economic theory on the block that explains all. It is the Das Fliegen Schwein Theory. Its virtue is that is not based on mathematical models, or even any ideology or philosophy, only on observale aeronautics. Do check it out.

Nick Drew said...

Mark W will be on shortly to correct your German, Demetrius

Yes, EtB, but which conspiracy theory do you subscribe to (we have an anon who floats by occasionally to give us his)

Anonymous said...

we have asked the Financial Services Authority to look at how in the future we should control new mortgages for more than 100% of house value

Well that's all right then. Inherently high risk lending becomes OK if the FSA take a quick look. Somehow I think another 14 billion of my taxes is heading straight down the pan.

Anonymous said...

If Brown cracked up and had to be relieved of command, that would have to cause further uncertainty at a time when confidence is fragile. Short term a further decline in Sterling at least.

I think he gets a lot of support from just being PM and he won't be kicked out until the last minute. Then he might crack up, but who cares? He'll occupy his time by taking measures to avoid the worst consequences for hard working families, or a scorched earth policy as it might otherwise be called.

Then we'll have a Conservative government whose instinct will be to sugar coat the turd by wittering on about thousands of green jobs in the green economy. They may scrap the more obvious nonsenses, but not enough to matter.

The really interesting question is that as a capitalist, where do you put your loot bearing in mind that 70s style inflation might come about. Just preserving its current buying power may be an attractive option.

Anonymous said...

Nick, re your comment.
1)I have not back-tracked to read your scorched earth posts, relatively new here.
We obviously share that opinion.

2)I have been aware of the Gramm machinations for a while now, initially by courtesy of another fine commenter in another forum.

3)Re prices.- - this is a complex proving problem. The answer touches on a range of other, erm, conspiracies, which may, or may not, interest you.
The full story involves many links, some of them videos, and back reading of blog archives for details.

Also a few published books for background information.

It would take you many hours, and perhaps days more for the import to be realised. You may find yourself on tangential issues.

Let me know.

Houdini said...

Brown does not have any personality or other problems at all, IMO. He is trying to rationalise to us all why he isn't a total failure as PM, and more importantly to him as the Chancellor for a decade.

This depression was started and made many years ago, and under his watch. It was fed and watered by him and his stupid policies. He is culpable.

He must try and reverse that though and so clings on in the hope of a lifeline he can use as an excuse, like blaming the banks, the global economy, the Yanks, Directors of the banks, the Tories etc. etc. etc. take your pick.

He is not delusional, he is calculating and dishonest.

Nick Drew said...

anon -

(1) some of them are here, here, here & here.

that was the easy bit !

(3) any leads you can give on the other issue will be carefully followed up: hopefully you can see (e.g. from post of 17 Feb) we try to be diligent + discreet ... (email on main page)

Anonymous said...



I'll build it up in word and post in a couple of days.
No need for e's, all is in public domain.

You can scoop it up and do what-ever with it.

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