One thing that has surprised me is the reaction of the markets to Brexit. Given that over 50% of market activity is driven by short-term trading algorithms, all programmed to try use data about everything including political risk, it is a surprise I would think to many that really they are so calm.
Of course, last year was a bad year for the FTSE 100 and FTSE250, a bad losing year in terms of value, but it was across the West. The NYSE is also down 9% over the last 6 months, the FTSE at 12% is within a margin of error. Even the Shanghai composite is down around 5%.
At best you could say there is a little topper on the downside from Brexit but the trend is the trend. Without Brexit the FTSE would undoubtedly still be significantly down. As usual, there are a number of factors at play, here are my top 3:
a) "Buy the Rumour, Sell the News" - the reality of the hit to the FTSE from no deal will perhaps only happen the day that no deal is agreed, just as the bounce for a withdrawal or revocation of Article 50 must await the act, not the discussion.
b) Given the FTSE is full of dollar based multi-nationals, the real drivers are global macro such as the China-USA trade war, general slow down in the world economy, the rise of digitisation in every aspect of company life, uneven growing global population and resource extraction. Brexit is a long-way down this list.
c) No one knows what the effect is of even a Hard Brexit. Clearly some industries with just in time manufacturing have issues, but many do not - take lawyers for example, Brexit means more productivity not less, how it works out in the round is hard to fathom in the era of project Rapture and Fake news - even for the algo's.
It will be interesting to keep an eye on the markets though for signs of economic stress over the next two months.
Thursday 31 January 2019
Wednesday 30 January 2019
I Think We Know What Happens Next ...
Open thread.
But IMHO, if Mrs May must re-negotiate the deal within 2 weeks, well, the EC can certainly hold its breath for at least that long ...
ND
But IMHO, if Mrs May must re-negotiate the deal within 2 weeks, well, the EC can certainly hold its breath for at least that long ...
ND
Sunday 27 January 2019
Bull from the China Shop
Here's an interesting story from last week: Oxford University has decided it's not going to take Chinese money, specifically from Huawei who are not exactly flavour of the month in the West just now.
Yes, there are many who find it hard to turn away cash from, well, almost anywhere. You don't need to google very hard to find reams of stuff on how New Zealand has been bought and sold by Beijing; and how concerned the Australians are about the activities of their biggest 'trading partner'.
Confucius Institutes are springing up all over. As well as being a neat echo of (e.g.) the Goethe Institut network - with all the cachet the Chinese sage carries worldwide - the name has political overtones in China itself. During Mao's Cultural Revolution, Confucius became a dirty word. His subsequent rehabilitation was symbolic of the Deng regime that eventually followed and was the bedrock of the China we face today.
So what's the party line now?
ND
_______________________
** Some would raise an eyebrow at the £££ Oxford accepted from 'Len' Blavatnik - but then again, he's Sir Len, isn't he ...?
Chancellor Patten noted Oxford’s extensive involvement with the Chinese government: “We have quite a few Chinese benefactors. Now we have a huge number of Chinese alumni because we have got over 1,300 Chinese postgraduate and undergraduate students at Oxford - more than most universities - and about 240 academic staff. This is a subject that we are really live to.” Patten hinted that universities would be under greater financial pressure to accept foreign donations post-Brexit. He also highlighted the importance of donor transparency in countering such influence. Patten described Confucius Institutes, Chinese government-funded cultural institutes attached to foreign universities, as “an offshoot of the propaganda department of the Communist party.” He said: “If the Confucius Institute is working on a university campus as a contributor to Chinese language instruction, to understanding about the spectacular Chinese civilisation, that is fine. If it is trying to shape the curriculum, or shape students’ attitudes to Tibet, or Xinjiang, or free speech, or other issues like that, it is not acceptable.”As it happens, I can tell you there is a specific admin department in Oxford that monitors this kind of stuff very carefully, China top of their list: they are determined not to allow a re-run of the notorious scandal of Gaddafi money buying influence at the LSE. All very well for Oxford, you may say: they can afford to be choosier than most**.
Yes, there are many who find it hard to turn away cash from, well, almost anywhere. You don't need to google very hard to find reams of stuff on how New Zealand has been bought and sold by Beijing; and how concerned the Australians are about the activities of their biggest 'trading partner'.
Confucius Institutes are springing up all over. As well as being a neat echo of (e.g.) the Goethe Institut network - with all the cachet the Chinese sage carries worldwide - the name has political overtones in China itself. During Mao's Cultural Revolution, Confucius became a dirty word. His subsequent rehabilitation was symbolic of the Deng regime that eventually followed and was the bedrock of the China we face today.
So what's the party line now?
A spokesperson for the Chinese Embassy told Cherwell that the Confucius Institute “is a joint venture between a Chinese university and a foreign host university upon the latter’s application. The Chinese university respects the host’s right to make their decision in running the Institute and never interferes in academic freedom. “The Confucius Institute is strictly for public good, focusing on mutual exchange and providing people with an opportunity to learn the Chinese language and culture, to strengthen educational and cultural cooperation, and to build friendships. The Institute has never participated in any activities in the host country that are political or religious in nature, and will not do so in the future.”Yeah, right. Keep googling re NZ etc for other views on that.
ND
_______________________
** Some would raise an eyebrow at the £££ Oxford accepted from 'Len' Blavatnik - but then again, he's Sir Len, isn't he ...?
Friday 25 January 2019
Extend and Pretend
This phrase was all the rage 10 years ago.
The banks had lent money that the borrowers could not pay back, if they foreclosed on all the bad loans, the banks themselves would go bust. So they extended the loans, accepted lower payments and generally waited where they could for companies to come back to health and be able to pay back their debts.
In the round it worked, of course RBS and others also took plenty to the cleaners to help them 'stay afloat', but many of the larger loans and groups were spared. As an example, the housebuilders were in real trouble. Taylor Wimpey's share price went as low as 5p! But the banks knew if they disrupted the house builders then the knock on to the rest of the industry would be unimaginable. Taylor Wimpey had its loans rolled over and recovered fully (in a sense, Wimpey was never in danger, its sales fell a bit, the issue was the lack of credit, not its business model or operations). This was a signal for the banks to 'extend and pretend' that whole sector.
Of course, over time the loans that could not be paid were called in, but we ended up for many years with a zombie economy of companies who could not pay their debts nor die off. This was a sub-optimal outcome, exacerbated by the over use of quantitative easing.
In other countries, things have gone less well. Deutsche Bank still has stuck to extending all loans and not clearing up its loan book, even today, 11 years after the crisis, the bank is a mess and the German Government is trying to figure out ways to get it to merge or other ways to keep it going. There are regular management changes as no one can figure out how to cure the illness with out killing the patient.
The above story has a alternate explanation for not postponing article 50 in the current UK Brexit mess. Postponing Article 50 is the political equivalent of Extend and Pretend, but the UK is Deutsche Bank not the UK or US banks. Extending won't fix anything at all, but continue to paralysis and stasis of the situation today. Whatever the idiots in Parliament decide to do, they need to make a decision as can-kicking now is the worst answer of all of them.
The banks had lent money that the borrowers could not pay back, if they foreclosed on all the bad loans, the banks themselves would go bust. So they extended the loans, accepted lower payments and generally waited where they could for companies to come back to health and be able to pay back their debts.
In the round it worked, of course RBS and others also took plenty to the cleaners to help them 'stay afloat', but many of the larger loans and groups were spared. As an example, the housebuilders were in real trouble. Taylor Wimpey's share price went as low as 5p! But the banks knew if they disrupted the house builders then the knock on to the rest of the industry would be unimaginable. Taylor Wimpey had its loans rolled over and recovered fully (in a sense, Wimpey was never in danger, its sales fell a bit, the issue was the lack of credit, not its business model or operations). This was a signal for the banks to 'extend and pretend' that whole sector.
Of course, over time the loans that could not be paid were called in, but we ended up for many years with a zombie economy of companies who could not pay their debts nor die off. This was a sub-optimal outcome, exacerbated by the over use of quantitative easing.
In other countries, things have gone less well. Deutsche Bank still has stuck to extending all loans and not clearing up its loan book, even today, 11 years after the crisis, the bank is a mess and the German Government is trying to figure out ways to get it to merge or other ways to keep it going. There are regular management changes as no one can figure out how to cure the illness with out killing the patient.
The above story has a alternate explanation for not postponing article 50 in the current UK Brexit mess. Postponing Article 50 is the political equivalent of Extend and Pretend, but the UK is Deutsche Bank not the UK or US banks. Extending won't fix anything at all, but continue to paralysis and stasis of the situation today. Whatever the idiots in Parliament decide to do, they need to make a decision as can-kicking now is the worst answer of all of them.
Thursday 24 January 2019
Defending Venezuela (2) - You Heard It Here First ...
A great start to the year for my man's prediction that international pressure would force the pace in Venezuela. Actually, he said invasion by Brazil + Columbia, with top-cover from Trump.Canada is a bit of a bonus! We await the actual invasion with bated breath.
And then, of course, we look forward to Corbyn raising the tattered old flags of the International Brigade ... Books those flights, Momentumites.
ND
Monday 21 January 2019
While we are looking at historical parallels, not of anything in particular, of course....
Charles Sumner was a single issue US politician. A populist. He believed in upsetting the status quo. And was prepared to do almost anything to achieve that aim. He hoped from political party to political party as the ones he liked to associate with rose and then fell into decline. He eventually became a Republican.
He was a man who preached about a far better future. One where the current constraints of the existing laws would not apply.
When accused of Utopianism, he replied "The Utopias of one age have been the realities of the next."
He was a true believer, not much admired by his fellow politicians as he was too radical and too extremist, and far too rude and not deferential enough to his fellows. Something that would cause him problems in the Senate.
Preston Brooks was establishment. A Democrat. A lawyer. Who also owned rather a lot of land. He strongly believed in the status quo. And despised any attempt, by anyone, to change any of the existing structures and laws that kept society as it was. He did not want change, of any sort.
Establishment versus populist.
This was the 1850s. And the establishment was all for keeping slaves as slaves. While the populists wanted them freed.
One of the significant events of the 1850s was the introduction of the state of Kansas into the Union. And whether it would be a slaver state or a free state. There was no more important or divisive debate in the country.
Sumner, the radical, made a very long speech about the violence then going on in Kansas.
The speech lasted two days, long even for the 1850s.
What got him into the most trouble was this bit.
He blasted the "murderous robbers from Missouri," calling them "hirelings, picked from the drunken spew and vomit of an uneasy civilization."
Part of this oratory was a bitter, personal tirade against South Carolina's Senator Andrew Butler. Sumner declared Butler an imbecile and, Mocking the South Carolina senator's stance as a man of chivalry, Sumner charged him with taking,
"a mistress . . . who, though ugly to others, is always lovely to him; though polluted in the sight of the world, is chaste in his sight—I mean," added Sumner, "the harlot, Slavery."
The use of harlot was deliberate. Northern abolitionists liked to use sexual imagery in their language. To imply slaveholders only wanted slaves in order to have sex with them. A massive insult to Southern aristocracy.
During the speech, Stephen Douglas, Democrat nominee for President, who lost to Abraham Lincoln a short while later, leaned over to a colleague and said, "that damn fool will get himself killed by some other damn fool."
Preston Brooks was a distant relative of Andrew Butler. And he took great exception to the wilfully inflammatory descriptions and so,
Two days after the end of Sumner's speech, Brooks entered the Senate chamber where Sumner was working at his desk. He flatly told Sumner, "You've libelled my state and slandered my white-haired old relative, Senator Butler, and I've come to punish you for it." Brooks proceeded to strike Sumner over the head repeatedly with a gold-tipped cane. The cane shattered as Brooks rained blow after blow on the hapless Sumner, but Brooks could not be stopped. Only after being physically restrained by others did Brooks end the pummelling.
A House committee investigated the incident and proposed expelling Brooks. “This they can’t do,” he predicted to his brother. “It requires two thirds to do it and they can’t get a half. Every southern man sustains me.”
Brooks was correct in assuming the attitude in the south and the inability of Congress to formally remove him. Most southern newspapers praised Brooks’s action.
Brooks resigned his seat. And was immediately re-elected by his district. South Carolina held events in his honour. From all over the South he was sent replacement canes. Some with lists of other Senators he might like to hit.
Sumner was badly injured and could not remain in the Senate. His district voted in no replacement and kept the seat open for his return. Overnight, both men became heroes in their respective regions.
To my mind, it was the sending of the canes, even more than the beating in the chamber, that shows the terrible anger that had built up on both sides. A man had been almost beaten to death in the very body of the legislature, and people felt so angry and betrayed by that man's views, that was deciding the future of their union, that a pummelling was seen as good justice for an opponent of their beliefs.
Brooks died very shortly. Of an illness. Sumner recovered and carried on his abolitionist work. Becoming a strong critic of Abraham Lincoln who he believed wasn't abolitionist enough.
The Kansas-Nebraska act showed neither side, slavery or anti-slavery commanded enough of a majority to over come the other. The impasse only caused greater tensions. With government unable to decide the people took the matter into their own hands and Kansas was flooded with outsiders, intent on makig the state their prefered slave or slave-free state.
Violence. Vote rigging. Murder. Arson and mob rule became widespread.
The New York Tribune labeled it 'Bleeding Kansas.'
6 years after the incident with Congress still split and no possible solution to the slavery/anti-slavery positions that divided the nation could be found, Lincoln, was elected. He promised he would not change anything. Would not free any slave or alter the existing laws on property or elections of the country. The South didn't believe him. And civil war broke out.
Some 50,000 civilians and 700,000 soldiers died in the 4 years of conflict.
 |
| 1856 map showing slave states (gray), free states (pink), and territories (green) in the United States, with the Kansas Territory in center (white) |
Charles Sumner was a single issue US politician. A populist. He believed in upsetting the status quo. And was prepared to do almost anything to achieve that aim. He hoped from political party to political party as the ones he liked to associate with rose and then fell into decline. He eventually became a Republican.
He was a man who preached about a far better future. One where the current constraints of the existing laws would not apply.
When accused of Utopianism, he replied "The Utopias of one age have been the realities of the next."
He was a true believer, not much admired by his fellow politicians as he was too radical and too extremist, and far too rude and not deferential enough to his fellows. Something that would cause him problems in the Senate.
Preston Brooks was establishment. A Democrat. A lawyer. Who also owned rather a lot of land. He strongly believed in the status quo. And despised any attempt, by anyone, to change any of the existing structures and laws that kept society as it was. He did not want change, of any sort.
Establishment versus populist.
This was the 1850s. And the establishment was all for keeping slaves as slaves. While the populists wanted them freed.
One of the significant events of the 1850s was the introduction of the state of Kansas into the Union. And whether it would be a slaver state or a free state. There was no more important or divisive debate in the country.
Sumner, the radical, made a very long speech about the violence then going on in Kansas.
The speech lasted two days, long even for the 1850s.
What got him into the most trouble was this bit.
He blasted the "murderous robbers from Missouri," calling them "hirelings, picked from the drunken spew and vomit of an uneasy civilization."
Part of this oratory was a bitter, personal tirade against South Carolina's Senator Andrew Butler. Sumner declared Butler an imbecile and, Mocking the South Carolina senator's stance as a man of chivalry, Sumner charged him with taking,
"a mistress . . . who, though ugly to others, is always lovely to him; though polluted in the sight of the world, is chaste in his sight—I mean," added Sumner, "the harlot, Slavery."
The use of harlot was deliberate. Northern abolitionists liked to use sexual imagery in their language. To imply slaveholders only wanted slaves in order to have sex with them. A massive insult to Southern aristocracy.
During the speech, Stephen Douglas, Democrat nominee for President, who lost to Abraham Lincoln a short while later, leaned over to a colleague and said, "that damn fool will get himself killed by some other damn fool."
Preston Brooks was a distant relative of Andrew Butler. And he took great exception to the wilfully inflammatory descriptions and so,
Two days after the end of Sumner's speech, Brooks entered the Senate chamber where Sumner was working at his desk. He flatly told Sumner, "You've libelled my state and slandered my white-haired old relative, Senator Butler, and I've come to punish you for it." Brooks proceeded to strike Sumner over the head repeatedly with a gold-tipped cane. The cane shattered as Brooks rained blow after blow on the hapless Sumner, but Brooks could not be stopped. Only after being physically restrained by others did Brooks end the pummelling.
A House committee investigated the incident and proposed expelling Brooks. “This they can’t do,” he predicted to his brother. “It requires two thirds to do it and they can’t get a half. Every southern man sustains me.”
Brooks was correct in assuming the attitude in the south and the inability of Congress to formally remove him. Most southern newspapers praised Brooks’s action.
Brooks resigned his seat. And was immediately re-elected by his district. South Carolina held events in his honour. From all over the South he was sent replacement canes. Some with lists of other Senators he might like to hit.
Sumner was badly injured and could not remain in the Senate. His district voted in no replacement and kept the seat open for his return. Overnight, both men became heroes in their respective regions.
To my mind, it was the sending of the canes, even more than the beating in the chamber, that shows the terrible anger that had built up on both sides. A man had been almost beaten to death in the very body of the legislature, and people felt so angry and betrayed by that man's views, that was deciding the future of their union, that a pummelling was seen as good justice for an opponent of their beliefs.
Brooks died very shortly. Of an illness. Sumner recovered and carried on his abolitionist work. Becoming a strong critic of Abraham Lincoln who he believed wasn't abolitionist enough.
The Kansas-Nebraska act showed neither side, slavery or anti-slavery commanded enough of a majority to over come the other. The impasse only caused greater tensions. With government unable to decide the people took the matter into their own hands and Kansas was flooded with outsiders, intent on makig the state their prefered slave or slave-free state.
Violence. Vote rigging. Murder. Arson and mob rule became widespread.
The New York Tribune labeled it 'Bleeding Kansas.'
6 years after the incident with Congress still split and no possible solution to the slavery/anti-slavery positions that divided the nation could be found, Lincoln, was elected. He promised he would not change anything. Would not free any slave or alter the existing laws on property or elections of the country. The South didn't believe him. And civil war broke out.
Some 50,000 civilians and 700,000 soldiers died in the 4 years of conflict.
Saturday 19 January 2019
Historical Analogies for UK 2019: Henry VIII Offers Two
It's fairly common to draw the parallels between Henry's Brexit from the Church of Rome; and why not? A break-away resisted by many, both on doctrinal grounds and on the basis that it would be disastrous for the nation; a furious reaction from the Brussels of its day; emnity between the nations on either side of the resulting schism (that were to last decades if not longer still); the losing faction in Britain continuing to fight the new order, to their deaths in many cases, wholly unreconciled to the new settlement; Rome in no way slipping into terminal decline, but mounting a determined counter-reformation to consolidate its position among the nations and souls that it still commanded. Yes, historical meat aplenty upon which to chew.
But I'd like to suggest another facet of Henry's times that might offer food for thought. It is the dissolution of the monasteries, his ruthless and wanton appropriation to his own selfish ends of the resources of the monsatic system, thereby destroying the status quo, the extended socio-economic structures he had inherited from the Middle Ages.
Not, let us quickly add, that I am suggesting Mrs May or any of her potential Tory successors have anything resembling this in mind, or will somehow be forced into it by a shortfall in government funds down the road. (Funnily enough, others might suggest exactly this - those who believe we will be so badly off post-Brexit that the welfare state will need to be dismantled.)
No, I have in mind John McDonnell, who clearly enough had hoped - and probably still does, in his happier dreams - that Brexit might signal the start of The Revolution. Because his plans for post-Brexit Britain most definitely include full-scale appropriation of the resources of the system he's working to take over. And he'd only too happily preside over the ruination that would result.
Wander through any number of those old edifices, from Fountains Abbey to the smaller piles of rubble still to be found in long grass around Britain, and think on't.
ND
But I'd like to suggest another facet of Henry's times that might offer food for thought. It is the dissolution of the monasteries, his ruthless and wanton appropriation to his own selfish ends of the resources of the monsatic system, thereby destroying the status quo, the extended socio-economic structures he had inherited from the Middle Ages.Not, let us quickly add, that I am suggesting Mrs May or any of her potential Tory successors have anything resembling this in mind, or will somehow be forced into it by a shortfall in government funds down the road. (Funnily enough, others might suggest exactly this - those who believe we will be so badly off post-Brexit that the welfare state will need to be dismantled.)
No, I have in mind John McDonnell, who clearly enough had hoped - and probably still does, in his happier dreams - that Brexit might signal the start of The Revolution. Because his plans for post-Brexit Britain most definitely include full-scale appropriation of the resources of the system he's working to take over. And he'd only too happily preside over the ruination that would result.
Wander through any number of those old edifices, from Fountains Abbey to the smaller piles of rubble still to be found in long grass around Britain, and think on't.
ND
Friday 18 January 2019
Friday Fun - Who would you choose if you could wish it so?
So amongst many things we have learned this week, it is certain that Theresa May is manifestly unsuited to being Prime Minister. I mean we thought she would be a bit crap, but down there, fending off Corbyn as worst politician in the UK; well it would be worrying if it wasn't so funny.
But here we are, equipped with Magic Wand, to anoint a new Prime Minister bright and early for Monday morning to lead us out of the chaos of Brexit one way or t'other....
WHO WILL YOU CHOOSE?
Two choices each - one UK and one choice of anyone on earth.
Defend your choices in the comments and I will pick a winner Sunday!
Thursday 17 January 2019
Brexit Positivity from an Unexpected Source
OK, so, quiz-time at C@W:
Q - who is saying this, and where? (no googling at the back there)
Worth a read.
ND
Update: see BTL, Mr Cowshed has pointed out that it is John Harris who tramps the streets for the Grauniad.
Q - who is saying this, and where? (no googling at the back there)
Only a rupture with the EU will alter the failed status quo - it’s not plausible that either Brexit in name only or no exit at all can lead to radical reform of our broken system ... Just before Christmas, the Bank said the economy could shrink by 8% in the event of a disruptive no-deal outcome - but this was a worst-case scenario and the Bank had to throw in the kitchen sink to arrive at it. The idea, for example, that interest rates would rise by four percentage points after a no-deal Brexit is implausible ...
Brexit, the gilets jaunes protesters in France, the terrible pain inflicted on Greece and the support for the League/Five Star government in Italy all tell their own story. Europe is alive with political discontent that reflects the demand for deep and urgent reform, but the chances of getting it are less likely if the status quo prevails ...
“a reformed Britain in a reformed Europe” - possible but not all that plausible, given that it would require breaking up the euro, more autonomy for individual countries to intervene in the running of their economies, and a simultaneous philosophical U-turn in the big member states ...
The softer the Brexit, the more convinced the EU will be that it has been doing the right thing all along. Britain will not go up in flames, but there will still be consequences. Leave voters will feel they have been victims of an establishment stitch-up. The anger will not go away and will eventually resurface. The risk is that the losers will be the biggest supporters of the EU – the liberal left. And the biggest winners will be the extreme right.A - Larry Elliot in ... the Grauniad ! Elliot is an honest fellow, noted for traipsing the streets of northern towns before, during and after the referendum, canvassing actual opinions. Westminster bubble-journos willing to get their shoes dirty in this way are few and far between: honourable mentions also to Michael Crick and, credit-where-its-due, yes, La Toynbee (who for all her nosepeg-wearing support for Labour has long held very realistic views about immigration, albeit furtively).
Worth a read.
ND
Update: see BTL, Mr Cowshed has pointed out that it is John Harris who tramps the streets for the Grauniad.
Wednesday 16 January 2019
About last night and the morning after....
So, yesterday, PM May held a vote on her Withdrawal Agreement that she knew she would lose; and lost.
Now today Leader of the Opposition, Corbyn, is holding a vote of not confidence which in the Government which he knows he will lose.
Parliament has become, literally, political theatre. No one there wants to really engage with the political kryptonite of Brexit (except May and now we know nearly everyone disagrees with her).
I think it worth pointing our the key mistakes of late, such that a way forward can be found by not repeating errors:
1 - May did not get her own party, or indeed, any party onside. As such she lost badly. Next week then a much broader discussion must happen to discover what might be possible. Hate it as I do, she must reach out to Labour moderates to see what they would vote for.
2 - Corbyn can only oppose. His unicorn Brexit bullshit has harmed the process no end. If moderate Labour were in charge, already we would be headed to EFTA, the WA or some such. But Corbyn HATES TORIES, so at the moment there can be no bi-partisan deal. The Labour backbenchers need to reflect on where following their idiotic leader is taking them and the Country they claim to serve.
3- The ERG, confident they can somehow filibuster for no deal, are actually a busted flush. Not numerous enough to achieve their ends, they need urgently to find a position within the Overton Window of the possible. They dug the heals in over May's leadership forcing a vote, she is still there, they dug their heals in over vote and are still going to vote for May anyway (which shows how duplicitous they are, because it clearly demonstrates the thing they most want is their own jobs). Digging in is a failed strategy that needs to move on.
4- The Libs, SNP and assorted Second Vote merchants - Whilst creating a huge amount of media noise, they have achieved nothing apart from to help split the country on even more partisan lines. The Government is in charge and are saying no revocation of article 50 and no second referendum. When the Government survives its vote of no confidence, there should be some reflection about what in the real world would be the best deal from here (Full Customs Union and Membership of the single market should do it).
Really, having engineered a crisis between themselves, a bit less ideological shouting and a bit more willingness to move should see the UK easily move to a Norway type option. There is no majority for leave in parliament and no majority for remain in the Country - so a nice bit of fudge will have to suffice.
Now today Leader of the Opposition, Corbyn, is holding a vote of not confidence which in the Government which he knows he will lose.
Parliament has become, literally, political theatre. No one there wants to really engage with the political kryptonite of Brexit (except May and now we know nearly everyone disagrees with her).
I think it worth pointing our the key mistakes of late, such that a way forward can be found by not repeating errors:
1 - May did not get her own party, or indeed, any party onside. As such she lost badly. Next week then a much broader discussion must happen to discover what might be possible. Hate it as I do, she must reach out to Labour moderates to see what they would vote for.
2 - Corbyn can only oppose. His unicorn Brexit bullshit has harmed the process no end. If moderate Labour were in charge, already we would be headed to EFTA, the WA or some such. But Corbyn HATES TORIES, so at the moment there can be no bi-partisan deal. The Labour backbenchers need to reflect on where following their idiotic leader is taking them and the Country they claim to serve.
3- The ERG, confident they can somehow filibuster for no deal, are actually a busted flush. Not numerous enough to achieve their ends, they need urgently to find a position within the Overton Window of the possible. They dug the heals in over May's leadership forcing a vote, she is still there, they dug their heals in over vote and are still going to vote for May anyway (which shows how duplicitous they are, because it clearly demonstrates the thing they most want is their own jobs). Digging in is a failed strategy that needs to move on.
4- The Libs, SNP and assorted Second Vote merchants - Whilst creating a huge amount of media noise, they have achieved nothing apart from to help split the country on even more partisan lines. The Government is in charge and are saying no revocation of article 50 and no second referendum. When the Government survives its vote of no confidence, there should be some reflection about what in the real world would be the best deal from here (Full Customs Union and Membership of the single market should do it).
Really, having engineered a crisis between themselves, a bit less ideological shouting and a bit more willingness to move should see the UK easily move to a Norway type option. There is no majority for leave in parliament and no majority for remain in the Country - so a nice bit of fudge will have to suffice.
Tuesday 15 January 2019
15th of Jan - The Day Brexit dies
It has been a long time coming, but here we are. After 2 years of snakes and ladders, the Remain Parliament - now actively helped by the Speaker. Are going to vote down Brexit overwhelmingly.
The fact that the very outnumbered Tory Brexiteers (ERG) can't see this is a bit worrying. They are forlorn if they think we get no Brexit. From here the only route is an even closer Union with the EU from that agreed thus far. Full Customs Union and the Four Freedoms, plus ECJ overlordship.
At that point, for what it is worth, even I would rather we just Remained. There is no point in the whole kerfuffle just to not really leave or change anything.
The Remainers are going to win big today and we have many years to figure out what consequences it will have. Will the leading parties in Labour and Tory still stay that way when they both have the same policy, against the wishes of a majority of the Country? I can't see it but then first-past the post voting mitigates against any change - and after all, there won't be any more referendums in my lifetime after this!
The fact that the very outnumbered Tory Brexiteers (ERG) can't see this is a bit worrying. They are forlorn if they think we get no Brexit. From here the only route is an even closer Union with the EU from that agreed thus far. Full Customs Union and the Four Freedoms, plus ECJ overlordship.
At that point, for what it is worth, even I would rather we just Remained. There is no point in the whole kerfuffle just to not really leave or change anything.
The Remainers are going to win big today and we have many years to figure out what consequences it will have. Will the leading parties in Labour and Tory still stay that way when they both have the same policy, against the wishes of a majority of the Country? I can't see it but then first-past the post voting mitigates against any change - and after all, there won't be any more referendums in my lifetime after this!
Friday 11 January 2019
The Government is still The Government
Oh yes, a pretty lousy one, under an extremely limited PM: but it's the only one we've got. And that's the point.
I had planned to do a week-ender on historical precedents, but then the Graun came up with these two pieces: by Raphael Behr (rarely much good but interesting here) and Jonathan Freedland (usually rather better, balanced and perceptive). Ignore the clickbait titles, that's just the subs trying to earn their keep.
First Behr. The useful bit is this:
As regards the possibility of such a coalition: way back in 2016 I expressed surprise that a disciplined block of Remain MPs hadn't formed during that summer, probably with a parliamentary majority, albeit of a single-issue nature. Evidently, they were all sitting on their hands. Fair enough - who knew what was going to happen with enough certainty to glue such a bunch together? But for this to happen right now, in a maelstrom of unpredictable developments, seems to me even less plausible. Dominic Grieve (who, BTW, was known as Pushy Fresher of the Year at University, and was equally insufferable then) can command a majority - this week - for his clever-clever, not-too-partisan procedural gambits, which Jezza and John don't mind encouraging for their disruptive effect.
But for something that constitutes a concrete, deliverable course of national action? See messrs Behr and Freedland for just how difficult that could be, not least because all the components of the coalition have other, different loyalties (see Behr's neat Rubik Cube analogy). The difficulties would be particularly acute when any efforts to frame a concrete resolution were to bump up against Corbyn's world class intractability and/or McDonnell's old-Marxist-in-a-hurry desperation to bring about (*fanfare*) The Revolution.
Which leaves us with the only army in the field - HMG. Yes, asymmetric warfare is all fine and dandy, but who gets to talk daily to Merkel et al? Who wields the Civil Service / Police / etc etc? Who administers the benefits system? Who has plans, however culpably half-baked, for the ports and trucks and medecines and air traffic and electricity for NI (and gas for the Republic) ...
In short, however effective a squad of snipers may be on their own terms, they don't constitute an army of occupation. There are a couple of outlandish examples in history of individuals bluffing whole battalions to surrender on a misunderstanding - but it doesn't constitute a reliable strategy.
I can't see what the outcome will be in any detail. But I do believe it will be, well, whatever the government decides.
ND
I had planned to do a week-ender on historical precedents, but then the Graun came up with these two pieces: by Raphael Behr (rarely much good but interesting here) and Jonathan Freedland (usually rather better, balanced and perceptive). Ignore the clickbait titles, that's just the subs trying to earn their keep.
First Behr. The useful bit is this:
the race is on to form some cross-party coalition that can agree on some kind of plan: any plan that is not May’s one, and doesn’t involve flying off the no-deal cliff edge. As one cabinet minister put it to me recently: once that coalition is found, “it is then effectively the government”... and he goes on to describe how difficult this is. Varying the metaphor, Freedland addresses a similar question: "For pro-Europeans, the moment of truth is coming. To avoid no deal, they have to choose ... standing on the deck shouting at the [iceberg] will not help. MPs have to agree a plan to get out of the way – and they have to do it very soon." He also then explains how problematic this is - with some interesting notes on McDonnell's evolving position. And although he concludes ...
rarely for an opposition, [Labour MPs] can shape events. They can steer the country to safety.... he doesn't tell us how this could practically be done.
As regards the possibility of such a coalition: way back in 2016 I expressed surprise that a disciplined block of Remain MPs hadn't formed during that summer, probably with a parliamentary majority, albeit of a single-issue nature. Evidently, they were all sitting on their hands. Fair enough - who knew what was going to happen with enough certainty to glue such a bunch together? But for this to happen right now, in a maelstrom of unpredictable developments, seems to me even less plausible. Dominic Grieve (who, BTW, was known as Pushy Fresher of the Year at University, and was equally insufferable then) can command a majority - this week - for his clever-clever, not-too-partisan procedural gambits, which Jezza and John don't mind encouraging for their disruptive effect.
But for something that constitutes a concrete, deliverable course of national action? See messrs Behr and Freedland for just how difficult that could be, not least because all the components of the coalition have other, different loyalties (see Behr's neat Rubik Cube analogy). The difficulties would be particularly acute when any efforts to frame a concrete resolution were to bump up against Corbyn's world class intractability and/or McDonnell's old-Marxist-in-a-hurry desperation to bring about (*fanfare*) The Revolution.
Which leaves us with the only army in the field - HMG. Yes, asymmetric warfare is all fine and dandy, but who gets to talk daily to Merkel et al? Who wields the Civil Service / Police / etc etc? Who administers the benefits system? Who has plans, however culpably half-baked, for the ports and trucks and medecines and air traffic and electricity for NI (and gas for the Republic) ...
In short, however effective a squad of snipers may be on their own terms, they don't constitute an army of occupation. There are a couple of outlandish examples in history of individuals bluffing whole battalions to surrender on a misunderstanding - but it doesn't constitute a reliable strategy.
I can't see what the outcome will be in any detail. But I do believe it will be, well, whatever the government decides.
ND
Thursday 10 January 2019
Remain only a hop, skip and a jump away now - Power from the People
So, as I have long suspected, Parliament is re-asserting its Authority to end a Brexit process it has never supported with its heart (whilst practically voting it through many times..).
It is important to see things for what they are, the rebel group of Tories in any other Government would have the whip withdrawn. They have defeated the Government on the Finance Bill and now voted with the Opposition (in reality if not in fact, due to it being a Tory amendment) to derail the Government's plans for Brexit.
May is no longer in control, even the Speaker of the House of Commons can push her and her Government around. Effectively now May is operating a minority Government, short of 20 seats. If there was say Yvette Cooper opposite, then many of the Tories would have defected and we would see a real change of Government.
As it is, the Remain group in Parliament of 400 MP's are rapidly moving towards the moment where cancelling Article 50 reaches the floor of the House and is voted through by the ex-Tories, LD's and Labour. Brexit will be over.
The only detail is whether they pretend to 'extend' Article 50 to show a further pretence of not quite over-ruling the referendum. In reality, this will only be the choice if they think they can get another referendum or General Election. In the world we are in, the Remainers would be crazy to hold another referendum which they could lose, when all they have to do is assert Parliamentary Authority to win now. Possibly, Labour MP's will want a General Election but I doubt it, as most of them don't want Jeremy Corbyn to be Prime Minister either.
The fly in the ointment maybe the EU itself, the price of revoking Article 50 might well be a referendum or indeed a commitment to remain for X years (something of a large can kick, say 5-10 years).
Again, nothing the Remainers cannot vote through with their Parliamentary majority. Of course, May herself is toast but she has been for a long-time. The Tories have one, very last chance of redemption, get rid of May, install Boris/Hunt or Gove, show they want a hard Brexit, kick out the Remainers and go into an election as the Party of the people.
Very interesting historically, neither Prime Minister nor Leader of the Opposition is in control of events - all the while Parliament is seeking to over-turn a decision of a national referendum against the will of the people as expressed. Truly amazing for this to come about - dare I say it, revolutionary!
Wednesday 9 January 2019
Defending Venezuela
Here's a belated offering to the 2019 predictions party. A friend who is well up on the Americas suggests that both the Donald and Brazil's Bolsonaro will be in dire need of foreign-policy distractions in the months to come. Fitting the bill nicely would be an invasion of Venezuela. This, he predicts, will be conducted by Brazil and Columbia, with US topcover if not actual regular military engagement.
While we have our tin hats on (proper ones, not the tinfoil variety, you understand); that would sit well with cross-border interventions by both Russia and China. There is of course a history of countries with itchy trigger-fingers taking their cue from events several thousand miles away. Busy times ahead at the UN? Well what's the point of having a veto if you don't use it from time to time.
Getting ahead of ourselves a bit, here: but perhaps Jezza could raise an International Brigade for Venezuelan deployment? I am sure that Momentum members would shape up into effective troops: Corbyn Companies and Snowflake Battalions for the defence of socialism in foreign parts. It'll all be over by Christmas, boys and girls.
ND
While we have our tin hats on (proper ones, not the tinfoil variety, you understand); that would sit well with cross-border interventions by both Russia and China. There is of course a history of countries with itchy trigger-fingers taking their cue from events several thousand miles away. Busy times ahead at the UN? Well what's the point of having a veto if you don't use it from time to time.
Getting ahead of ourselves a bit, here: but perhaps Jezza could raise an International Brigade for Venezuelan deployment? I am sure that Momentum members would shape up into effective troops: Corbyn Companies and Snowflake Battalions for the defence of socialism in foreign parts. It'll all be over by Christmas, boys and girls.
ND
Monday 7 January 2019
The downside of making politicians work harder - they are too clever by half
Welcome 2019 and the first week of business. Good to see plenty of economic indicators have held up over the year end (such as Manufacturing and Services PMI and employment) and we are off to an OK start for the new year. Even the sickly FTSE has perked up a little bit again trend (traditionally, after the Santa Rally to help fund mangers, they engage in a January sell-off to depress markets as they are set their targets for the new financial year - so that they can make their benchmarks and bonus' gain for the year...).However, having posted last week on how May and Corbyn are being made to work for a living, a downside has quickly emerged. Plenty of other MP's are in revolutionary mood, the main threat seems to be currently from Nicky Morgan and Yvette Cooper. Both have corralled a Lib Dem and Labour group of MP's, with a couple of Tory outriders, into back a new plan. This plan is to make amendments to the Finance bill that would stop funding for the Treasury for a no deal Brexit, Uncle Vince of the Lib Dems, who it would seem has survived Christmas, is also planning an amendment that would stop the Government raising taxes if it pursues Brexit, so invoking a US style Government shutdown. The precedent of these bills for any future minority Government as we have now is also a major consideration, perhaps Mr Corbyn should think about what it would mean were he to end up in charge of a minority Government - abjectly cut asunder by New Labour and the Tories for his pet policies.
These wrecking amendments surely border on treason and a less partisan Speaker of the House than John Bercow would throw them out, what Government can allow it very function to be undermined by its own finance bill? What parliament could actively vote to undermine the functioning of Government? At the moment the rebels are thinking only about Brexit, they will be a lot more displeased when they find that stopping Welfare payments and spending hits them full in the face should they succeed. The Parliamentary maths is against them succeeding at the moment, but it is finely balance, they would need around 10 Tory votes and 100% compliance from all opposition parties.
However, more disappointing is the continuing crazed efforts at promoting Remain at all costs, these current ideas show exactly what at all costs means, causing more dysfunction in the Government than Brexit would itself. Any Government, faced with the current potential no-dal scenario in just a few weeks time, should be prudently spending and planning for the worst case. These same MP's are planning to vote down the one plan that exists currently agreed with the EU to prevent such an occurrence. Their position is an abomination, both torpedoing the Government attempts to find and deal and trying to stop planning for the no-deal they would create- I think the old phrase was too clever by half.
Thursday 3 January 2019
The joy of making politicians work for a living - more positives of Brexit
In 2017 the media and press really tried to remind the voters of the sheer awfulness of Jeremy Corbyn and his past. Little effect did it have as he hugely over-performed in the election. Voters wanted something new and different and were quite happy to listen to a siren song of free gifts for them from his Government. It proved a close call for Theresa May and in the end probably will be terminal for Brexit.
However, the power of Brexit has been strong over the holiday period. Even now, we can see May is aware that she is going to lose her vote. Twice this week she has phoned Merkel to see what can be done to try and improve her deal. At last, she is personally trying to bash heads together to get something workable.
In the same vein, Jeremy Corbyn has failed to push the government to a vote of no-confidence, refused to back a second referendum and maintains Labour will negotiate a better leave deal. This ruse, for it is no more, to allow Brexit and somehow keep remain Labour onside, is finally damaging his credibility with his deluded faithful.
Brexit is a big problem and the politicians are having to at last make hard choices instead of following the traditional European route of can-kicking. All in all, a good thing.
However, the power of Brexit has been strong over the holiday period. Even now, we can see May is aware that she is going to lose her vote. Twice this week she has phoned Merkel to see what can be done to try and improve her deal. At last, she is personally trying to bash heads together to get something workable.
In the same vein, Jeremy Corbyn has failed to push the government to a vote of no-confidence, refused to back a second referendum and maintains Labour will negotiate a better leave deal. This ruse, for it is no more, to allow Brexit and somehow keep remain Labour onside, is finally damaging his credibility with his deluded faithful.
Brexit is a big problem and the politicians are having to at last make hard choices instead of following the traditional European route of can-kicking. All in all, a good thing.
Tuesday 1 January 2019
Happy New Year - Predictions needed
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| No one has ever predicted this have they? |
The Wisdom of the crowds is strong in the last 12 years of this game between the blog editors and the commentators we have predicted an awful lot right, including the unthinkable such as the Global Financial Crash and France winning the World Cup.
2019 is going to be a corker though, what with the world properly hooked on psychodrama currently. So for our LUCKY 13th annual competition we are going with 5 questions for you to prognosticate upon:
1. Brexit - What happens now? Hard, May's Deal or Remain?
2. Government - Does May Survive in power? Does Corbyn?
3. Energy - Oil price - Up or down from the $55 it is today?
4. Markets - FTSE - Winning or Losing year, bonus point for getting within 200 points of the finish on 31st December 2019.
5. Bonus Round - Your THREE other predictions for 2019, Trump impeached, an immigration disaster in Europe, Italy to leave the Euro, Putin to start a new distraction war, a massive cyber attack, M&S to close...who knows, you decide.
A year of crowing to the winners, shredded betting strips for the losers. Good luck all.
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