Monday, 12 June 2017

A fine mess

The UK General Election has had the opposite effect to what was hoped. Instead of stability and assuredness for Brexit, we have a coalition with the DUP and a weakened Prime Minister.


Even the markets are pricing this in. We are left at the mercy of the EU, fortunately, they have no mercy so we will still get the Brexit that we need in the long-term.


For the future is an interesting story of how the Tories can convince the  Cities, young and benefits class that they are on their side. Cameron did this, it suggests to me a need for lots of new blood in the Tory party but PM May has stuck with the old guard for now - cling to nurse etc.


 The election to me has a 1992 feel to it, with Labour sure to be in place now to make the most of the effects of Brexit plus the economic downturn which, according to history, is inevitable at some point in the next 5 years.


Who will lead Labour, well at the moment it does not seem as if it will be a moderate, but a left-winger.


Time draws short for capitalists, the Tories will surely move further left to try and eek back from ground from Labour - there is no free-market party now in the UK.


At least there will be lots to discuss....

22 comments:

Matt said...

A move further left will just cause more loses of the 'traditional' supporters. If Labour make more promises funded by the magic money tree, then why vote for a centre-left Tory party?

To get the working man on-side, need to be small government and let people keep more of their money to spend how they please.

Bill Quango MP said...

What a disaster.
A terrible impact on everything.

On government. On Ireland
On Europe.

Only a battle lost is worse than a battle won.
Unless you are Jeremy Corbyn.

Anonymous said...

@ Matt

Unfortunately there are not very many working men these days.

Don Cox

MyPointedName said...

Few points here -

1 - The 'magic money tree' was able to pump out £200Bn to save the banks, so.....

2 - The 'Magic Money Tree' can print as much as it wants but it requires higher taxation to service and higher interest rates to fund. Devaluation by another route. The established parties (Lab and Con)do not want this because they (personally) are over invested in property and the pensioners are wedded to the idea of their houses being sacred.
Its utter nonsense and this my-house-will-increase-in-value-forever-at-everyone-elses-expense type of 'magical thinking' needs to be smacked down hard.
In fact it is being smacked down hard.
Youve taken two full-on face punches and your teeth are on the canvas.
Throw in the towel, accept house price and asset prices crashing and end QE welfare for the banks.
If you dont, you'll have a radical left govt within a year.


2 - The longer this drags on the more pensioners die (~200k every 6 months) and the smaller the Tory base becomes smaller.
The message again - youve had your fun and used state institutions to prop up private businesses and investments. At the moment all QE is doing is underwriting Chinese property investors savings. Its time now to negotiate your loses before they are punitively forced upon you.

3 - this vote, like Brexit, was not for Corbyn or Leaving the EU it was to utterly break the current establishment and their system. 'Radical change' is what the populace are saying - Farage, Brexit, Corbyn... whatever it takes to shake you from your stupor. Another election will see Corbyn in unless the economic savagery of QE and inflated house prices is wholly reversed.

4 - Finally, you still havent addressed the massive, gaping maw that is the pension deficit. Brexit will allow companies to leave the UK and get arms length from their pension commitments. Again the Magic Money tree will be required to fill this gap... so collapse in asset values, devaluation of sterling and huge inflation awaits.

5 - You need to decide whether you will adopt a strategy to manage this scenario over time or whether the markets and foreign powers will ram the consequences down your throat all at once.

Time to grow up and face your problems, John Bull.

Terry Needham said...

MyPointedName

One point only: You don't understand what Quantitative Easing is.
It isn't a magic money tree.
Look it up.

andrew said...

CU

..."there is no free-market party now in the UK."

There never was!
We were(are?) a fairly open trading nation because
(a) that was where the money was
(b) we made the rules until ww1
- i.e. path dependency from historical accident.

With a competent opposition (ie not now) that hopey changey message will reduce the tories to rubble - or about 250 seats.
And when you have few natural resources apart from people, some might say it is actually a good idea to invest in people.

BQ

sounds like a limerick.

MPN

1 - No magic tree

a-BOE gives itself 200bn
b-BOE buys assets
c-All things being equal, asset price rises
d-ATBE, cost of money falls

Which is where we are... ...with people wondering whether that 200bn is still worth 200bn and also how to unwind this long assets / short money position without causing another 2008.
(personally, I think we will do nothing)

2 - No, see (1)

3 - No, people retire as well as die - the population of pensioners is growing and so is the population of pensioners with their own home - new pensioners are richer than older ones.

4 - The pension deficit is starting to fall (admittedly high though).
Deficits are an artificial confection of actuarial maths and marking values to market prices - i.e. a bit tosh.

5 - Yes, we have problems, but so does everyone else.
Are ours worse than Europe's ?

Jer said...

MPN

"The longer this drags on the more pensioners die (~200k every 6 months)"

But also, every six months, the young and foolish become less young, and some become less foolish.

The problem is that they then look for something more sensible than Labour... and where is it?

Thud said...

After a weekend of reflection I think my wife and I have decided to start putting into motion a long held plan to decamp from the U.K. I just cant reconcile the disaster of a future socialist regime
with my Love of England and my Childrens future, sad really.

Dick the Prick said...

Don't blame you Thud. It's going to get worse before it gets better.

Anonymous said...

This is all a f-ing disaster.

The Tories cannot win the next election, whether it is held next week, next year or in 2022. The whole of this Parliament, no matter how long it lasts, will be taken up by Labour punching the Tories onto the ropes 24/7. It will be like the tail end of the Major era only it will last the whole Parliament.

Brexit is a disaster now. There can be no sensible deal. McDonnell is calling for the hardest possible Brexit as he knows that it will make it easier for him to become Chancellor/PM and free him up to unleash Marxist Terror once he takes charge.

The new government should ask meekly if it can rescind Article 50, as there is now no choice. There can be no free-market, free-trade Brexit. Only economic stagnation, then the inevitable Khmer Rouge takeover when the election finally comes.

Well done Boris, May et al. Well done idiotic blog-commenters and social media fools. Well done Gove and your "who cares about experts". Three f-ing cheers. You took a solid, successful, prosperous liberal democracy and you handed it in three steps to Marxist revolutionaries.

MyFinalPointName said...

@Anonymous 4:45
Totally agree.

Unfortunately many of the posters here wear blinkers and cannot see beyond their own narrow self-interest. In fact many are disturbed/immature enough to conflate the two.
In fact, this mental state is a major part of the problem for free-market parties.

I have been warning here for a number of years about the effect of high and rising house prices - because pensioners believe they are 'entitled' to it and because it necessarily excludes the young by restricting supply.

The fools here have been living and prospering on subsidy for nearly a decade and have come to believe that this is how an economy works. As a result they cheer the increasing subsidy and the intervention required to maintain it.
Losses cannot be realised because they, personally, would have to endure them.
Because they are Capitalists, this must be Capitalism.

Of course, you and I know that this is just a titled cart, proffering apples in one direction, while starving the other. Alas, the little minds who congregate around this site think only of their own advantage over those at the other end of the cart.

These people are not Capitalists; they are mean-spirited, petty Little Englanders.
And you are quite correct, in order to maintain their Daily Mail lifestyle and outlook, they have royally fucked their own country.

Not a man among them has the balls to accept their losses, the brains to seek compromise or the ingenuity to seek radical change.

I must confess though, I voted Brexit precisely because I knew this would be the outcome; sometimes you must vote for something you dont want in order to get what you do want; mission accomplished.

I predicted a hung parliament too, y'know.
I predict Labour in power within a year and a ball ache of a recession (whether or not Brexit is achieved).
I predict huge tax increases and a punitive LTV to get pensioners out of family homes and into flats.
It needn't have been this way, but the self-described Capitalists insisted on their own chintzy privileges being maintained at the expense of others. Tacky, tasteless people - much like the porcelain ornaments that adorn their suburban semis, I imagine.

Imagine, its for these arseholes and their PVC conservatories that thousands died at the Somme etc...

Disgraceful.

Anonymous said...

Backing away from all the panic - it's like watching a Mirror Universe Polly Toynbee - the result threw up a few questions.

The first is are the Yoof going to remain a consistent political force, or was this some one off where they finally felt they had to make themselves heard? Or is it back to 'meh' come next election? If they've developed a taste for the ballot, well the Tories are going to have to decide if they'd ever like a reasonable majority again when dreaming up the next manifesto.

The second is, is the end of austerity? You can't keep telling the nation to take its medicine and then keep kicking the end date of the prescription ever onwards without the nation getting incredibly pissed off. Low-to-zero inflation kept the wolves at bay, well, that's not on the cards anymore. They've also had the best part of a decade to deal with the fundamental issues of profligacy in the public sector and to improve efficiency, and they've done fuck all about it.

And finally, can the Tories get the pensioners and small businesses back in their favour (Blue Eyes poo-poohed such a thing, tell me, how *is* that working out for the Tories?) Yes, there are a cold, hard financial facts hoving into view, but there are better options than pissing all over your core voters and expecting them to go "yummy!"

Next election is going to require some inventiveness. Not expecting any though, so unless the enervated Yoof was a flash-in-the-pan, may want to prep for a minority Corbyn government in the next couple of years. Maybe before Christmas.

And yes Thud, escaping the UK is an option in that instance.

Had to bin my new business idea up the road in Huddersfield, so nothing holding me and mine here.

Anonymous said...

Anon = Mufinalpointname

Why don't you vote for Corbyn? He has the communist LVT as part of his manifesto. Chavez loved it too. And apparently that worked out just fine.

amcluesent said...

Does it really matter when no-one in Europe has any stomach to turn back the Moors, with the inevitable consequence we'll be living as dhimmis within the caliphate by 2030?

America alone, indeed!

Charlie said...

In years to come, both Brexit and the inevitable hard-left GE victory will be seen as being driven by two things and two things only:

ZIRP
QE

These two utter calamities bestride all economic and political events, yet barely get a mention. The intergenerational wealth gap, the BTL turd currently clogging up the housing market, a youth without hope of ever owning a stake in society, the whole rotten lot is the result of Brown's idiotic fake abolition of boom and bust, i.e. the business cycle, and Cameron and May's inaction to rectify the situation.

I'm a Tory. I held my nose and voted for May and my complete idiot of a local candidate. I watched my seat go from a 5,000 Tory majority to a 5,000 Labour majority, and you know what I think? I think "f*ck the Tory party". I see commentators saying that the young voted for Corbyn because he offered free stuff. As if pensioners don't vote Tory because of free winter fuel, TV licences, bus passes, triple lock...

The whole rotten edifice needs to go in the bin; the Tory party, the Labour party, the Lib Dems, the Greens. None of them are worthy of my vote. The country is lost to the left and the Tory party have done absolutely nothing to stop it. They are meekly complicit as they drift around in the centre-left.

Anonymous said...

Charlie,
you have something there. The question is of course,(pace my other name) with the edifice in place, which political party was going to make the changes which would have led to falling house prices and perceived return to 'boom and bust?'
As for the rental market, this provides an essential service although it is unfortunately infested with crooks.One of the scams in London at least-happened to a daughter - is agents requiring deposits of £1000 or more just for the privilege of being considered as a tenant and references taken. It seems that a large number of such deposits are not repaid.

E-K said...

MFPN

You're being unfair on us. We've been denied Conservatism since Thatcher.

Thud

Yes. Time to go.

CityUnslicker said...

Hmmm not sure about the total despair.

I think Leave is the loser overall. The Tories can govern and the long-term exposure of the Left can continue anew. The Labour moderates will not be quiet forever.

In fact, a tiny Queen's speech is ideal, the less Government does, the better the economy as a rule.

look at the fag end Major government so derided - best economic times since the war that was!

Anonymous said...

andrew

"a-BOE gives itself 200bn
b-BOE buys assets"


So it pays existing govt or corporate bondholders over the odds (in the sense that it's at minimum putting a floor under the price) for their bonds (or other assets - God knows what they buy).

The bondholders (companies, banks, maybe individuals) then have that money (which, remember, the BoE 'gave itself').

Explain how that differs from a magic money tree, please?

Terry Needham said...

"Explain how that differs from a magic money tree, please?"

I didn't understand what was happening either so I purchased Mervyn King's account of the crises "The End of Alchemy"
I suggest that you do the same, though I can appreciate that marching up and down demanding free stuff is more fun.

hovis said...

Haven't looked in for a while.

Oh woe, oh woe unto you all ... it seem like we have reach a wailing and beating of breast almost of biblical proportions, with several people feeling fragile.

However I don't fully agree - now the election was a big fuck up but we have seen them before. But is it the end of the world: no; Will it be bad: Yes.

In context Corbyn did well, havig boxed off Brexit as an issue he was good at campaigning (as you'd expect of a militant MP who who's whole life has been campaigning for lost and minority causes). He asked alot of good questions - even if the answers seem very wrong to people here. May didnt evenn get to the Questions.

I'd agree with those saying the whole edifice is rotten and the termites are QE and ZIRP (i.e. the enablers of the 2008/9 'rescue') - these changed everything.

Terry - politically it matters not whether QE is the magic money tree or not. What matters is that is looks like it.

Jer said...

Good point Hovis, it's hard to argue that there really is no money left when the immediate reply is "well, you found it for the banks".

None of which changes the fundamental fact that there really isn't a magic money tree.

On the plus side, the complete shambles of the Tory party will hopefully lead to a Brexit with no agreement, and therefore WTO terms. We'll not get better than that offered anyway, so best just accept it and prepare.