Wednesday 31 May 2017

Corbyn's Financial Transaction tax

never thought I would have to write at all about what a hard left might do.

In all the hullabaloo over the election and the government  sudden decision of the young people to vote for free education for themselves, we have missed the main trick.

The Financial Transaction tax is a very bad idea for the U.K. It would instantly move all non-equity trading to Europe and FX too if applied there. Right when Brexit is already making waves and causing enough problems.

Brexit and FTT really would kill the City. Killing your goldnen goose would be the silliest idea of all time and effectively a national suicide for the UK - after all, London subsidises every other region bar the Home Counties. The vast bulk of this extra cash comes from the City and related services.

No one has even mentioned this ludicrous proposal, which when the EU made it was enough to push even George Osborne to consider leaving the EU.

Now, in the firmament of a hard left manifesto, it is not even noticed. More is the pity.


Anonymous said...

Thank fuck for First Past The Post. These are worrying times but it should be borne in mind that they can't form a cabinet and which ever one they get will spend all day about what Agenda Item 1 is.

I rarely, if ever, accuse the BBC of bias. BQ will testify that I still do the News Quiz and all that shit but the BBC have played this 'debate' up their own arse. This ain't Nixon v Kennedy and that taproom brawl would have demeaned any PM. The way they're spinning it like she's a pussy is petulant. Can you imagine John Cole using the Beeb as an events organiser? Hmm...most displeased.

I liv in Hudds (yeah, go Town!)so there's loads of socialists and sentimentalists round here - the one's who have a bit of cash or ambition won't vote for Corbyn. We've had quite tough years in our way and torching the lot now would appear reckless.

I think the graduate class taking over the bennys was predicted some time ago in this parish.


Steven_L said...

I liv in Hudds

I lived there briefly about 16 years ago. Has it stopped raining yet?

Anonymous said...

It certainly has Sir and we have joined the Premiership! I've spent 40 years not going - been dragged to about 10. Feel vaguely obliged to go next year though. It's never been sunnier, really!!

K said...

I don't see how this Labour surge is coming from any group that matters.

So May's uturn pissed off a bunch of old people but are they really then going to vote for Corbyn instead? OK maybe some of the lifelong Labour voters up north will have switched back but will they throw away the decades-long dream of Brexit just to avoid five years of Tories?

ICM said their surge is coming from the youth which has suddenly decided to vote but I'll believe it when I see it. And even if it is true then I bet it's focused in London which is already a Labour stronghold.

Then there's all those south east middle class remoaners scared about Brexit. Have they seen yet what Corbyn is already doing to the pound?

Scrobs. said...

Too true, K.

Most Conservative voters made their minds up weeks ago, it's only the polls getting it all wrong again, and of course the BBC bias which kids nobody these days.

Anonymous said...

At least a Corbyn government would deal with the immigration problem. The British economy would rapidly go the same way as Venezuela, and I don't think Venezuela has an immigration problem.

The pound would drop like a stone, which results in a rapid rise in inflation. This is followed by currency controls, price controls, and rationing.

Mass exodus.

Don Cox

Electro-Kevin said...

I got my postal vote out of the bin and voted Tory. The prospect of Corbyn/Abbott is just too scary.

Hopefully my action will have translated right up the country - and blow the polls.

This is infuriating. Victory should not be anywhere close to the jaws of defeat.

I fear that the Brexit mandate could end up weakened, however. Miller-Blair is ready to pounce.

This was meant to be all about Brexit.

So why wasn't it ???

MyWarningName said...

I'd like to draw your attention to a comment I made here on 21st April predicting the implosion of the Tories and suggesting it was a deliberate tactic -
I am wholly correct in this assertion and it may be that we get a hung parliament; the best result for the Tories who can avoid sole blame for Brexit and the economic suicide it entails.

In the light of todays comments its clear that I'm going to have to spell things out for people again (FWIW, I do this for the lefties and their self deluding fantasies on other sites).

This is the current situation;

- Britain is bust.
- It crashed in 2008 and QE kept the illusion alive.
- In response to austerity and bank bailouts the populace voted itself out of the EU.
- BoE policy has now run its course and there is no ammo left in the box.

What you need to know -
- Pensions are not there. There is no money stashed away, only unfunded liabilities.
- Within 18 months (during Brexit negotiations) Sterling will collapse and the UK will enter the worst recession in almost a century. (This is the main aim of the EU and they will work to achieve it.)

The medium term (18 mths - 10 years)
Asset prices will collapse and inflation will spiral; essentially, the last 10 years will reverse themselves.

The solution.
- Taxes and interest rates must rise sharply and quickly to pay for unfunded pensions and attract foreign buyers to UK bonds.
- If taxes dont rise, services and pensions will disappear; there'll be massive social unrest, thus, taxes will rise.
- IRs will rise because nobody will loan money to a country with a diminishing currency unless the rate of return is very, very high.
- If neither happens either pensions or govt will be underfunded; social unrest.

This election is about who is on the hook for these outcomes; who gets to eat the shit sandwich that began with Brown and was doubled up by Cameron and Osbourne. (Thus a Tory should vote Labour and vice-versa.)

It doesnt matter what your opinion is or what way your Daddy always voted; this is going to happen .
Both you and the lefties need snap the-fuck-out of your partisan delusions and start managing the profound change that is coming to the UK.

So, those on the Right need to start announcing where the ~9Bn in tax increases is going to come from.
Those on the left need to address the excessive, even lavish, entitlements and services provided by govt at no cost.


(Now go back and read the 'What you need to know' bit again.)

(FWIW - My personal opinion is that at this juncture, people really need to grow the fuck up, cut out the delusions and finger pointing and just get on with reconstituting the economy and the state; If you dont tackle and accept the difficult choices and sacrifices required, they will be forced upon you.)

Steven_L said...

I wouldn't put it past the EU to try and start a recession in the UK. After all, they've not batted an eyelid at several depressions in the EZ.

But if they think they can push the UK into recession and it won't have a knock on effect for Germany, France and Italy they are deluded. But maybe they think it's worth it, who knows. I've heard that at the end of the day the EU is run by the likes of Daimler, so I can't see why they'd want to bankrupt a major customer and debtor.

I don't think a big, deep, top of the credit cycle recession is coming. I think we're in for a smaller, panic/sentiment-driven mid-cycle downturn.

If there is a recession the authorities will want inflation to rise, even if this means sterling falling further, because it keeps nominal asset prices afloat. Even a seasoned investor like CU here thinks the exchange rate is irrelevant, funny what a big leveraged bet on UK house prices can do to ones outlook. I tried pointing out at Mail Online that UK house prices were down or flat over 10 years against every major currency bar the pound I was ridiculed. People don't care about the exchange rate, they only care about house prices and mortgage rates, which can be - and are being - manipulated.

Short of the Trump administration deciding to start a big global recession by reversing US monetary policy, there won't be one yet. A UK recession in the coming months / years will be an opportunity to buy UK assets (although admittedly it might be worth revolving at least some of your portfolio into foreign assets and gold etc now). I can see there being some kind of savings and loans-style wobble in the US soon, but nothing like 2007/8.

The time to dump everything and look for an elusive safehaven will be early to mid-2020's.

Raedwald said...

Don Cox - Re EU immigration

Yep. £ at €1.45 - NHS fully staffed with EU nurses. £ stuck at €1.12 under Corbyn - nurses from EU core nations quit and return home. In fact they've been dribbling away since the £ took a post-Brexit hit.

Which the BBC has chosen to interpret as Euro nurses fleeing UK in fear of attack and abuse by knuckle dragging RW brutes lurking outside hospitals to catch them.

Electro-Kevin said...

Three things (MWN and Steven L)

- Why are mortgage companies in a price war ?

- If Dutch Tulips could cause a global depression then what will the impact of tanked London be ?

- Why hasn't there been a run on London housing yet ?

Steven_L said...

Why hasn't there been a run on London housing yet ?

Can you even have a 'run' on an illiquid asset? Last time I looked Foxton's weren't doing so good and high end prime property asking prices were being reduced.

MyClarifiedWarningName said...

To answer EK -

1 - Why are mortgage companies in a price war ?
They are in a mortgage war because - like any business - they have too much of something and must lower the price to get rid of it. QE has printed far, far too much money and there is nowhere for it to go except property. Now that BTL is fucked and the Chinese have cracked down on dodgy money going overseas - the real value of residential property is being found and its a long way south of where it is now.

If Dutch Tulips could cause a global depression then what will the impact of tanked London be ?

It will be catastrophic for those who treated the London property market as an investment - chinese chancers, BTL scammers, cayman Island trust funds and the fee extractors that surround them.
For those who treated London housing as its supposed to be - a utility, a home - there will be little effet.

Why hasn't there been a run on London housing yet?
There has been a run on London housing for 10 years. Only massive immigration and loose finance provided by the BoE has kept it from price discovery.
Now the foreign (principally Chinese) money has stopped and immigration is set to drop with Brexit demand (and price) will fall off a cliff.
Its already happening in the Canadian and Australian markets for the same (Chinese restrictions) reason.

Electro-Kevin said...

Not all bad then.

CityUnslicker said...

Why do none of you care about FTT, much more important than poxy house prices

- by the way London house prices are dropping but there are lots of foreign investors with hooky money who value are property rights more highly than the credit risk. For now...

Nick Drew said...

I care about FTT !

- having professionally studied the effect on the Swedish bond market of the Swedish FTT

wiped it out overnight: transferred lock, stock & barrel to London