Friday 30 September 2022

Putin's Pen: Friday Caption Compo

Here's L'il Volodya signing Something Important (the annexation document?); and note, by way of weighty and none-too-subtle symbolism - classic Russia - in the display case is a model of the sunken cruiser Moskva.  So this is obviously revenge, writ large.

Compo:   your speech bubbles for some of this motely crew.  I'll start you off.

No.13 - Couldn't we have found some carpet instead of this manky kitchen flooring?

No.15 - Shut your face and get your T-shirt in the wash!


Wednesday 28 September 2022

Lightening the tone: that WW2 pirate's ship returns!

This was to have been your weekend treat, but in light of the global gloom and local BTL burblings, here's a diversion for an autumn Thursday while we wait for CU to bring us more proper economic input ...

Remember this story of aerial derring-do, espionage, and not a little smoke & mirrors?

I promised you'd hear it here first, if and when the legendary Lockheed G-AFTL returned to these shores.  Well, it has.  Registered to Fighter Aviation Engineering Ltd, one Graham Peacock, it is undergoing very careful (and somewhat secretive) restoration at Sywell Aerodrome, Northants.  Aerodromelove that word.

At the same time as the restoration, some equally careful aviation detection work is going on, in the long-running attempt to get to the bottom of some of Cotton's pretty implausible claims and the myths that have grown up around them (which he would have loved).  The old airframe has many secrets to reveal.  Serious progress is being made and a tru-er story may be told some day soon.  I have photos from the inside but I'm not permitted to share them yet - sorry!

Read that story again and enjoy!


Tuesday 27 September 2022

Those Nord Stream leaks; "mobilisation"; nuclear threats etc UPDATE

Oh wow.   Both Nord Stream pipelines have apparently leaked their guts out in the last day or so.  Ol' Joe Biden always said he'd be making sure NS 2 never went into operation.  To be honest, I never really believed he'd resort to the Semtex Option, but who knows ...

Scope for a tremendous range of imaginative conspiracy theories here.  Cui bono?  Well probably not German industry.  Make of that what you will - and I'm sure some of you will.

Quiz:  who blew up NS1 and NS2?

  • Ol' Joe Biden
  • Li'l Volodya Putin
  • The Poles
  • The international commodities traders
  • The Rand Corporation
  • Defective Russian engineering
  • That James Bond gadget
  • George Soros
  • "false flag"
  • Greenpeace
  • 'Buster Crabbe'
  • German Green Party breakaway faction
  • [.... your write-in answer here ....]

Incidentally, Putin's announcement of last week is really, errrr, stirring things up, isn't it?  Not sure that his "partial mobilisation, I stress, only partial" is entirely going to whatever plan he had in mind, unless you consider it was simply to give the Russian people to understand in a rather graphic way that they're all in it now, whether they thought of themselves as armchair spectators or not.  BTW, despite his and other Russian leaders' placatory TV language, the Executive Order he signed contained nothing that limits the mobilisation, and might almost amount to conscription - a very different concept indeed.

But putting guns into the hands of tens of thousands of morose, drunken and undisciplined Russians is something that ... well, let's just note it's something that Lenin went to great lengths to avoid, his first act on taking power being to dis-arm and disband the army and get them all out of Moscow

Finally, let's elaborate on the point I made last week, that his sinister (but technically nuanced) nuclear 'hint' leaves him awkwardly placed next month when he's annexed four new formerly-Ukrainian oblasts and they are all still under determined "NATO" attack.  OK, by the letter of his dictum, they'll be under conventional attack, so his nuclear threshold hasn't been crossed: but try telling that to the bellicose woman who fronts on Russian national TV.  She'll want retaliatory nukes - "this is not a bluff" - starting as soon as the next big town falls back into the hands of the Ukrainians.

And - and this is the Big One - if he really does annex the lot, it puts these new fully-under-seige territories in the same category as Crimea - or maybe the other way around.  Now he'd probably been enjoying a de facto pass from the world at large since 2014, on keeping Crimea in his poaching-pocket.  But maybe he's just jeopardised that: he's taking one helluva gamble as to how it falls.  

Or maybe he's just jeopardised the whole of Europe.  Did the man say Interesting Times?


Friday 23 September 2022

Truss channels Thatcher, gets timing wrong

Kwasi Kwarteng is an Eton scholar, went to Harvard and has a Phd in economic history from Cambridge. Surely, he is one of the most economically educated Chancellors we have ever had.

Liz Truss too is no slouch, having worked her way to Oxford from humble beginnings.

So here they are, as Mr Drew points out below, trying to do something about the UK economies performance in a big hurry. For a very long time now, the UK has been sinking back to its post-war status, with socialist policies driving down growth and leading to higher taxes in a cycle of despair. Not since the late 1990’s have pro-market policies been popular or implemented. Blair, Cameron and Boris all worshipped at the NHS cult and in massive state redistribution.

With the large tax cuts seen today, the current leaders are trying to change course. To redress the large tax burden to encourage investment. It is the right approach but the timing is so bad, that they have taken the biggest gamble since Cameron agreed to a Brexit referendum.

With the tax cuts, come no spending cuts. Indeed the energy support offered is enormous and comparable to the Covid state spending madness. Still the socialist grasp on the media and body politic insists that gross spending and help for all is the purpose of Government. This year, with interest rates rising, the pound falling and inflation out of control, we will borrow more than during covid and getting on for 2009/10 levels of borrowing.

The markets are shocked, not believing that the UK won’t  continue to follow the EU orthodoxy of managed decline. However, with massive spending there are no guarantees of success and possible horrendous downside risks. 

Next year super energy bills will finish many businesses. No one is paying £35 for a cod and chips.  The war in Ukraine is likely to escalate not end. Interest rate rises will cause huge problems in the housing market and start to damage bank balance sheets.

This will likely lead to a Schumpterian crisis, one where massive destruction is wrought on our zombie economy with the hope that out of the ashes a leaner, better focused and more profitable one arises. 

The fact that the rest of the West will get this too more or less is not much of a consolation for us. Perhaps the real gamble is that with everything buggered anyway we need to set things up for a recovery on a more pro-growth economic base?

A better approach would have been to sign-post these changes. Agree some cuts to budgets no longer affordable to go with them and so limit the real fiscal easing until next year when inflation should drop (it will when high energy prices are baked in, big drops will occur, even if only back down to 5-6%).

Thatcher had to endure first and my take is that this is the Truss plan. It is her 1981. Risk it now, go for growth and hope something turns up. It is a big gamble, we are left to hope it works. 

Failure will be a hard burden. Massive debt, a pound heavily devalued trying to buy expensive energy valued in strong dollars. Double digit interest rates that will induce a recession worse that 2008 in the real economy with huge unemployment and negative equity a common experience for many of us. Plus a Labour government keen to say it is all the fault of Tory tax cuts, trying to tax our way back to growth. 

That Mini-budget: NOT in Full

 ... for which, we await CU who will hopefully be along later.

Being a total non-economist, all I can say is this: whether good, bad or empty, it's being done in the right way - crash bang wallop, within days of taking office.  Exactly the same as Kwarteng's dismissal of Tom Scholar - I've no idea whether it was a good or crazy thing to do: but I am sure it was right to do it on Day 1.

Oh: and I very much hope it's all, hmmm,  extremely well-considered and adroit policy-making.

So - while we wait ... have at it!


Thursday 22 September 2022

More on the Putin Nuclear Pronouncement

Big boss: lots of phones ...
The debate over how to take Putin's nuclear sabre-rattling goes on - and why not, it's quite important - and I'm gratified to note my 'optimistic', albeit literal, interpretation of his exact words (see yesterday's post) is gaining traction - see these BTL exchanges on a US website, for example.  With Putin, as it happens, attention to his precise words is important, as far as it goes.  Russia is like that.  (Can't say the same for Biden, can we?)

It's also interesting to look at the body language, the delivery and the props etc.  

Firstly, though he's still clearly very nervous indeed, Putin didn't look as ill as he did earlier in the year - though our own dear Queen died only two days after looking quite perky with Boris and Truss, so that doesn't betoken much.

Secondly, the way he emphasised, very earnestly and very quickly, that his new mobilisation is only 'partial', is a huge sign of weakness; as of course is "this is not a bluff" - akin to when you hear a parent shouting "stop that - and I mean it!" to a kid.

Thirdly, I laughed out loud when I saw his bank of phones, carefully in camera-shot to prove how important he is.  That's truly Russian, too.  You realise he'll have a full-size office-grade photocopier by his desk, too?  See this old story of mine from my Moscow days ...

All very scary.  We try, but we still don't really understand these people.


Wednesday 21 September 2022

Putin's Latest

OK, so this development - not unforeseen - is way above the pay grade of a mere blogger.  But we can still have opinions.

It was pretty obvious, when Ukraine swept the Russian rag-bag out of Kharkiv earlier this month, that Putin would respond.  Taking his cue from Uncle Joe in 1941, he went hull-down and took his time.  On 2nd Sept, as the counter-offensive began I wrote

Worst case? This happens, say, in October, after the Russians have conducted the spurious "referendum" they have long been trying to carry out - now looks like a colossal mistake by Putin not to have done this already - and which presumably records 104.6% of the population of Kherson declaring itself to be now a province of Mother Russia. Then Putin can declare that Russia herself is in mortal peril, and ...

And so it transpires.

It was indeed a colossal, complacent mistake, one of his multiple errors.  Painted-into-the-corner Putin now has a massive problem, in painfully easy stages:

  • The rushed referenda will indeed deliver the 104.6% votes [1]
  • Putin's mobilisation will not quickly boost effective forces on the ground [2]
  • Ukraine will continue making territorial ground: for them, nothing changes [3]
  • The world will not recognize the newly-annexed 'Russian territories'
  • So if he's "not bluffing" [© V. V. Putin 2022], he'll potentially be faced with the need [4] to go nuclear in, oooh, a couple of weeks time.   October, in fact.

    Just a guess, but I think we'll find he is indeed bluffing.  Hope so, anyway.


    [1]  But probably also some surprises, since this development has been so obvious for so long, and there are clearly some canny and creative strategists in Kyiv, just as there seem to be none in Moscow
    [2]  Though in the long run, as we've always said, who's to stop him?
    [3]  Quite the reverse: in the ad hoc graveyards of Izyum they are being reminded in spades - literally, I'm afraid - of why they are fighting
    [4]  He did pick his words quite carefully; and later, he'll say he was only "not bluffing" if NATO had threatened to nuke Kherson.  Which of course it hasn't and never will.  But for the domestic nationalist audience he's managed to look really tough.  For now.  And that's his problem: they aren't thinking about the hair-splitting weasel in his words ...

    PS: the sum of all this might well mean some really quite impressive new Ukrainian re-gains in the next couple of weeks.  Overstretch is a big risk: but they've a massive strategic incentive to achieve more, & quickly.

    Friday 16 September 2022

    Truss' energy package: unintended consequences ahoy!

    It's a bit difficult to be definitive on the new PM's 'energy price guarantee' package, because "details are awaited".   The Funeral is the pretext, but actually of course they're making it up as they go along.

    So: politics first.  She has to do something extraordinary, or she'll be defenestrated by poll-tax style riots before Xmas.  As has always been the case, announcements like this shut Starmer up immediately - he never knows what to say.  All the commentary has essentially been technical, save for a little peep of "it's not progressive - the wicked rich benefit too": true, but since all eyes are on the Bier, that's not getting any traction.  

    We might also note that Truss obviously considers it politically unacceptable to announce any form of rationing.  it's gonna happen anyway (and we know the Grid already has the power to do it unilaterally), so I think this mealy-mouthed cowardice is stupid.   The time to ready the populace for what's to befall is right now, as Macron is doing quite purposefully.

    As regards the economics, not that I'm your man here and we look to CU for more; but quite obviously, in the short term the package does almost nothing to increase supply, and not much that I can see to curtail demand (no mention of rationing or compulsory reductions in usage).  So the fundamental issue - i.e. this is a genuine (if artificial, as regards Putin's actions) global supply crisis - is being glossed over:  it's been decided the state will underwrite whatever the energy is going to cost.  So the first big takeaway is: cost-push inflation will go roaring on.

    What about spontaneous demand-side response?  Industry will certainly retreat in the face of even the newly capped level of price it's paying: some of this might be in the shape of a bit of efficiency, but mostly it will be outright demand destruction (or 'demand export' - to N.America, which won't be suffering so badly).  Likewise, even at the capped level, which is 'merely' twice last year's rather than three times, residential energy consumers will definitely use less.  I don't think anyone knows by how much domestic demand will fall - some of it has historically been totally inelastic, but we may find that changes.  Again, some of this will be efficiency (and putting on a jumper) but for sure, problems of illness and damp will arise over time.  The housing stock won't benefit at all, and nor will sickly people.   

    All that said, my best guess is that rationing will still be required, certainly if anything like the Beast from the East (meteorological beast, that is) comes along, or even its small brother.  This is an outright, absolute energy commodity shortfall, with Europe being as badly affected as any region.

    I'm disinclined to bang on about too many of the details just now, because we await so many more.  Likewise, the longer-term aspects (North Sea licensing, fracking, nukes) designed to improve supply are for another day, in every sense**.  I will say, however, that there is to be a 'commercial' strand of activity undertaken, as Truss favours buying out the generating sector windfalls with secure long term offtake contracts (on a voluntary, negotiated basis!) instead of windfall-taxing them.  This is really stupid, in my judgement.  Any ideological resistance to windfall-taxing has long since lost its virginity; and the idea that the civil service is up to this 'commercial' task flies in the face of all experience.

    Jury is out: but on this and indeed the whole complex package, I'm not even slightly confident a Truss / Kwarteng government is up to the task either.  It's just so big.  As is the parallel EU effort, by the way (and over there, it's very fraught politically, too: and their grasp of how markets work is really awful).  In both cases, there will turn out to be equally big gaps; and overall, the unintended consequences will be legion.



    ** ditto the global aspects of the crisis, of which there are many

    Wednesday 14 September 2022

    A grandfather's pride

    So while we await my digesting of the Truss energy masterplan ...

    ... at the weekend, granddaughter Drew (9) entered a 'roar race'.  Nope, me neither.  These racers are small electric bikes with a 'reverse megaphone' attachment.  The louder the kid roars into the megaphone, the more power they get!   Bloody brilliant, I wish they'd been around several decades ago.

    Anyhow, gD was pretty confident of her decibel potential, and so it proved.  Overcoming a severe jostle-induced wobble at the start - did I say this is fiercely competitive stuff? - she got well into her power-yelling, and snatched the lead around the outside in the closing couple of yards, to take first place on the podium.

    Grand-paternal pride, or what?!

    To round things off nicely, gD's cousin (8) had staked her pocket money on gD to win, knowing all too well the power in her playmate's lungs.   We're talking Yorkshire here, where people seem to make a book at the drop of a hat (is this a legacy of whippet racing, or summat?).  The cousin cleaned up.

    A very satisfactory outing.  The energy stuff can wait.


    Saturday 10 September 2022

    Reasons to be, errr, cheerful?

    I must be joking, right?  Death of the Monarch; new PM with the most shocking lack of appropriate qualifications, or abilities, or 'ear'[1]; economic crisis; crazy energy plans issuing from every western orifice; war raging.

    Well, yes.  But here's a list of the straws I'm clutching at this morning:

    • As Kev noted BTL a propos the Harry/Meghan thing, Charles has been well advised - that speech of his last night was smart in all sorts of ways: "I'm not rowing back on the 'Queen Consort' thing; I'm not writing any more Green Ink letters; I know what the constitution means" etc etc
    • Much as Starmer rushed to frame Truss as "nothing new"[2], with the passing of HMQ and the Winter Crisis about to break there's actually no possibility of thinking of Truss as continuity-anything.  If she's smart, (OK, sorry: if she has a team of half-way decent advisers) she'll hitch herself to the new Carolian age every way she can: a huge vicarious honeymoon period with goodwill and benefit-of-the-doubt swilling around everywhere - it's there for the taking.  Starmer?  he's that old Johnson-era bore.  See what we're doing here?
    • BBC is on eggshells.  Troublemakers can't get a peep right now.  Bloody right, too.  That'll last for a while, also.
    • Oh, and: Ukrainian counter-offensive is being conducted very adroitly.  Putin entering another round of screw-ups (to be continued ...)  
    Go on trolls, you know you want to tell us Russia is winning hands-down. 



    [1] in her statement she told us that the Queen was "the very spirit of Great Britain".  Does she have the slightest idea how hurtful that is to an Ulsterman?  How it convinces them they are completely forgotten in Westminster?  Anyone wanting to be PM has to be the instinctive master of this stuff (as well as needing staff who are even cleverer still).  Sheesh.  Maybe she is beyond redemption after all.

    [2] you can always spot Framing - they can't help themselves saying it three times in a row and twenty times thereafter

    Wednesday 7 September 2022

    Plans to "solve the energy crisis"

    The EU and, we are assured, newly-minted PM Liz Truss, are hatching plans to cater for - I can't immediately think of a better phrase - the energy crisis this winter and maybe beyond.  Well, they certainly have to do something: "Devil take the hindmost" doesn't count as public policy (even if a handful of commenters seem to favour the bracing Nietzschean approach). 

    Whatever these plans turn out to be in detail, by definition they will be epic in scope and scale.  In such extreme and complex circumstances, with so many moving parts, I don't trust any bureaucrat to do anything adroit; so we may be equally sure the "unintended consequences" will be monstrous.  We could all guess at a few.  Greta thinks she can guess, too - and she's not happy.

    I particularly don't trust the EU in general, and Germany in particular, to do anything half-way intelligent by way of intervening in markets that are international (electricity, carbon) if not global (oil, gas, coal).    As opined here many times before, there is a profound shortfall in German understanding of how markets actually work, which is inevitably and amply reflected in Brussels.  

    Come to that, the much-hyped G7 plan for a "cap on oil prices" also sounds cracked.

    And do we trust Truss, to invoke a recent coinage?   

    But of course we await details on all of this high-minded blundering; so perhaps we should calmly wait and watch, with equanimity and an open mind ...   


    Monday 5 September 2022

    The Strange Case of Cressida Dick

    The Winsor report into Sadiq Khan's hounding of Cressida Dick leads us to a very odd place, where Dick reportedly found Khan "intimidating".

    WTF?   There's many a nastier beast in the world of top-end criminality than Mayor Khan, unprincipled little opportunist that he is.  What we need in our Metropolitan Police Commissioners is someone who can look absolutely any mortal man squarely in the eye, unblinking, and read his fortune for him.  Stick it up your arse, Mr Mayor. 

    Before I am accused of sexism (or being a neocon shill, or whatever it is our sub-marxist trolls like to say), let us immediately add that in my varied career I have met several women quite capable of facing down the Khans of this world.  Yes, bullies exist and yes, the Fred Goodwins, the Maxwells and the Bernie Madoffs make ground too easily in a world where most people back off from confrontation at the narrowing of a glowering eyebrow.  

    But it shouldn't be too much to ask that the top police job spec includes backbone.  Moral fibre.  Character.


    Friday 2 September 2022

    Ukraine: counter-offensive begins

     ... and we needn't expect much detailed news on it.  There's a very good essay as to why this should be so, in the opening 4 paragraphs of Wednesday's assessment from the excellent ISW.  Obviously this development has been widely anticipated, and Ukraine's systematic, highly successful interdictions into Russia's lines of communications and supply over the past few weeks have reinforced that expectation.

    In strictly observer mode (OK?):  another reason why there won't be much detailed news is that we needn't expect any sweeping arrows on the map, as we were treated to in February when Russian armoured convoys and air-assault operations burst clean through the borders on their way to Kherson, Mariupol, Kharkiv and, errrr, Kyiv.   My assumption would be that Ukraine will prosecute this campaign largely as a foot-infantry operation, kilometre by kilometre.  

    Why?  Well, (1) as we periodically remark hereabouts, there's no such thing as strategic surprise, but there can be tactical surprise.  In this case, Ukraine has at least pulled off several of the latter - the supply interdictions mentioned above, particularly in Crimea: but such is the ubiquity on both sides of persistent / loitering aerial reconnaissance these days (drones), a covert build-up of armour is well-nigh impossible.  So a "surprise" lightning armoured thrust, so beloved of 20th C military writers, is highly unlikely, at least at an early stage.

    (2) It doesn't seem likely Ukraine has major tank forces left to it (western material aid has mostly been in terms of artillery and lighter weapons); and anti-tank defences for a set-piece action aren't difficult to muster when you've had four months to prepare (i.e. since I wrote my little memo to Putin, saying that defence of Kherson should be his primary strategic goal).

    (3) Ukraine's massive advantages are (a) near-perfect intelligence (from western sources, plus the fact that the population of Kherson oblast is very hostile to its occupiers, with a long tradition of partisan warfare) ; and (b) the morale, determination and tactical skills of their infantry - up against what is, on average, the ultimate in non-coherent, unmotivated, rag-bag rabble.  In infantry actions, this matters more than almost anything.  It's a rabble that turns and flees.

    Artillery?  Both sides will have made sure they are as well-placed as possible in this dimension.  Russian preponderance is clear: but their supply lines are very ropey into this part of the occupied territory (right bank of the Dnipro), the bridges having been put out of commission and the ammo dumps having been blown up.  Obviously they have effectively limitless reserves, but they are relying on pontoons to get ammo etc forward.  If they stream forward in large numbers on known crossing-points, there will be carnage.

    And while artillery is great against (e.g.) armoured build-ups or static targets, that isn't going to be what Russia is faced with.  You can't easily use artillery against 1,000 adroit platoon-sized attacks across a 100 mile front.

    Russian response?  We're already seeing it.

    • laughable PR
    • stirring up trouble in Moldova again (and probably Belorussia shortly) to conjure the spectre of new fronts opening up
    • more bombardment of civilian targets deeper in Ukraine (particularly when the main IAEA mission has left)
    • presumably some enhancement of their stunts at Zaporizhzhia in the coming days
    • simultaneous diversion of troops to the south, away from the Donbas front; and increasing fireworks at the latter (this combo achieved by maintaining artillery there)
    What else might we get?  Termination of the grain export programme is an obvious one, either by formal revocation and /or merciless pounding of Odesa and the other ports, and grain silos. Non re-opening of Nord Stream 1 (currently shut for "3 days maintenance").   Etc etc: the opportunities for mischief are constrained only by the limits of the imagination.

    The biggie will come, if and when Kherson city is recaptured, or even on the brink.  Worst case?  This happens, say, in October, after the Russians have conducted the spurious "referendum" they have long been trying to carry out**, and which presumably records 104.6% of the population of Kherson declaring itself to be now a province of Mother Russia.  Then Putin can declare - see that second link again - that Russia herself is in mortal peril, and ...

    Have a great weekend!



    ** now looks like a colossal mistake by Putin not to have done this already