Phone shopping

The trend for online shopping continues.

Marks & Spencer has launched a new version of www.marksandspencer.com designed specifically for use on mobile phones and mobile devices – the first mobile site from a major UK high street retailer.

Customers on the move can now shop on a site that has been developed specifically to enable them to search, browse and buy easily from any web-enabled mobile phone or device. The site will always be in sync with the main M&S website so that customers can log into their regular web-account and manage their shopping basket from their mobile. There is no need to download an app or any software.

The web site designed for use with a mobile. I don't know what % of people shop by mobile at the present. Online data on internet shopper numbers is misleading and not quantified.

"The popularity of online shopping is continuing to grow rapidly, with the majority of the British population aged 15+ shopping online., according to new research." ???

But it must be a good bet that the average commuter train contains a lot more phone users than Laptop users. The number of smart phones sales are around 25% of all new mobiles sold. Online shopping, still in its early years, keeps making itself more accessible. In the coming battle for the few remaining consumer pounds, ease of use from a mobile platform could become quite a factor.

Germany kills the Bull market; OBR next?

OK, so we all knew that the Bull market in shares was going to come to an end. An over 50% gain in the FTSE just seemed unrealistic.

However, the panic in Germany that has allowed them to ban short selling of bonds is the act of a Country that has strong elements of the Lehman Crisis.

With hindsight the worse thing about the Lehman crisis, as with all financial panics, is that the lack of information led to a frenzy which worked itself into a stock market collapse. The European debt issue seems to have now entered the same phase, with a real panic by Governments about what to do.

What is worrying is that it is Germany that is panicking. Germany has not debt issue of its own and German government bonds are probably the safest in the developed world. That this has happened has seriously spooked markets that were looking for a reason to fall.

Hard to see the FTSE now being able to stay above 5000 in the Short term, which will equate to a 10% drop for the year so far. Long-term, a consistent fall is going to see the end of the Bull market which started in March '09. A bull market which can only last just over a year is rather depressing...

Also work has interrupted the flow from me of late, but generally I support the Tory idea of an Office for Budget responsibility. It should be able to stop any future repeat of the new Labour spending disaster...but right now, in the deep end of an economic crisis, a bunch of bad sounding figures emerging is not going to help anything. People won't see that that £2 trillion debt has a 50-year time horizon (i.e. £40billion a year) when considering pensions etc. They will only hear the bad news in the current market panic.

George Osborne should set the office up, but if it takes a year to find the right staff and get going then that will be no bad thing.

Pay Up, Pay Up, and Pay Again ! (Vitaï Lamenta)

"what does the middle class feel about becoming the milch cow for a Tory government ?" (Jeremy Paxman, Newsnight 18 May)

"We feel the Hand of History on our gonads, squeezing very hard" (Tory MP)

Vitaï Lamenta

There’s a breathless hush, twas a close-fought fight
No.10 gained in a famous win.
A bumpy economy, money tight -
Bad; but at last our man is in.
And it’s not coalition that sticks in the throat
Or the selfish hope of avoiding pain
But History’s Hand on the tax-payer’s scrote -
'Pay up! pay up! and pay again!'

The exchequer’s books are sodden red,
Red with the ink of a bank that’s broke;
And Darling's out; New Labour dead;
And Mandelson gone in a puff of smoke.
The river of debt has wrecked the banks,
As Brown skulks off with blackened name
And the tax-payer hears, as Sterling tanks-
'Pay up! pay up! and pay again!'

These are the words that year by year,
Whenever a Chancellor’s plans are set,
Everyone who pays tax must hear,
And none that hears it can forget.
This they must all – yes, each man must
Bear through life like a ball and chain,
And cursing Brown for his boom and bust
'Pay up! pay up! and pay again!'

(apologies to Henry Newbolt)

ND


photo (c) N.Drew 2010

That Con - Lib Agreement (2): Energy

Bizarrely, the great Agreement has more on Energy than any other single topic - 23 policy bullets !! It's mostly OK, and there probably isn't any money for the daft stuff, so we may be alright.

We can categorise the policies thus:

Excellent:
Full auctioning of ETS permits; Euro-Parliament to have only one seat, in Brussels - good luck with those, guys !

Good:
Scrapping HIPS; smart grid; home energy improvements; cancellation of extra runways at Heathrow, Gatwick & Stansted; per-flight duty; replacement nukes to receive no public subsidy (& so, there won’t be any replacement nukes)

If you must:
Green investment bank; feed-in tariffs – keep ’em low enough to be competitive, not so high as to represent a windfall; recharging network for electric vehicles – keep it strictly commercial; green spaces, wildlife corridors, biodiverstity - yadda yadda

Have you really got the £££ ?
CCS test plants; marine energy; high-speed rail network – all 3 parties promised this, but see George Monbiot.

WTF ??
Anaerobic disgestion (sic); illegal timber a criminal offence (sic) - did you really have nothing better to talk about in those negotiations ?

Daft:
- Banded ROCs – the crazier the technology, the bigger the subsidy
- Emissions performance standards - can of worms
- Floor price for carbon – bonkers, or worse: do you realise the folk lobbying for this (EDF) want a four-fold rise in the current price ?? and that it will go straight on the price of electricity ?? Don't see this happening, somehow
- Reduce central govt carbon emissions by 10% in 12 months – try it and you’ll learn a lesson or two !

Ridiculous:
Increase the target for energy from renewable sources. Guys, target whatever you like, but it can’t be done ! So please don’t throw money at it as though it could.

But then – you don’t have any money, do you ? Say after me: GDP trumps GHG.

Needless to say, none of this addresses the key issues, viz (a) - how to keep the lights on ? and (b) - what happens when oil goes to $200 ? These are for the grown-ups and can be resolved in due course ...

ND

Bercow Back in the Pooh Corner

Well, he's crossed Dave. And the entire Tory party. We shall find out just how many friends he does have ...

They're changing guard at Westminster Palace
Speaker Martin went down with Malice
Malice is threatening Bercow too
”His Tory friends are terribly few”
Says Malice

They're changing guard at Westminster Palace
Bercow’s taken the poisoned chalice
The bumptious git had better beware
“If he crosses Dave, he hasn’t a prayer”
Says Malice

ND


Update: ah, well

That Con - Lib Agreement (1): Trident

And so, as promised, we turn to that oh-so-cunning Agreement that has even Polly Toynbee (sic) and Billy Bragg (sic) swooning. Seriously, it is a clever piece of work, given the circumstances, though we may be sure that some parts will stand the test of time better than others.

We'll look at Energy later (incidentally, Energy is the biggest single section in the whole doc ! - one of several reasons why I identify the Hand of Letwin on the pen). For now, Trident's the thing.

It may be recalled that when, a full 3 weeks before it was published, we predicted in detail the feasibility of such an Agreement, Trident was one of the things I reckoned Cameron could give to Clegg by way of a symbolic concession: apparently of great magnitude but in practice of no consequence. How so ? Because Trident is not an independent deterrent. It is also formidably expensive.

So what does the Agreement say ?

"The Government will be committed to the maintenance of Britain’s nuclear deterrent, and have agreed that the renewal of Trident should be scrutinised to ensure value for money."

OK, all things to all men etc; but I think we can read between these lines. As with nuclear power, (of which more anon) by what measure could Trident be viewed as value for money ??

An easy target. Scrap. Soon. And turn BAe loose - under a very tight contract, natch - to develop us a truly independent cruise-missile platform.

What do you think ?

ND

Government retreats from Banking reform

Who has led this? Read this article in the Telegraph. It says that there has been more or less a u-turn on the approach to banking within the first week of Government. In many ways it is a return to a more sensible policy, with reform but without prejudice.

Splitting the Investment and Retail banks, although a good idea, is simply not possible unless it is done on a global level and that was never going to happen.

Poor St. Vince has also seen his role on the banking committee reduced as that forum is no expected to be heavyweight and give and high-powered recommendations.

All in all the banks must be please and their share prices will react this week to this news. My hunch is that there is a good working relationship between ex-Investment banker David Laws and George Osborne - they have quickly decided there are other fish to fry than the banks.

Who would have thought it?

The Times have a story about the outgoing government rushing through legislation and signing up to impossible contracts.

Vince Cable, the business secretary, said: “I fear that a lot of bad news about the public finances has been hidden and stored up for the new government. The skeletons are starting to fall out of the cupboard.”

John Pienaar is discussing it now on R5. His guest says this is all spin. That the Tories are preparing us all for big cuts by saying 'Oh no..look what we've found.' That is probably true but I wonder if there isn't a lot more to it.

One former adviser to the schools department said there was a deliberate policy of “scorched earth”. “The atmosphere was ‘pull up all the railways, burn the grain stores, leave nothing for the Tories’,” he added.

I read about it first, here, in November 2007
when Nick Drew wrote about it. CU has posts too {that I can't locate at the moment.}

I admit to initially being sceptical. Gordon had only become PM in June!
Labour were incompetent, reckless and misleading but to actually set out to damage the next administration? That would be Treason wouldn't it?

The Euro: Gute Nacht!

This is a graph of the Euro-Dollar exchange rate during Friday of this week. It does not make good reading if you are long Euro's. In fact the FTSE's 3.5% fall was not exactly a barrel of laughs either. To think the index is down on the year despite relatively good economic performance against last year.

Still, the Euro is in very deep trouble. The problem it has is existential. it is not as if people have not been saying that it won't work for a long time. Look at this article and comments I wrote more than 2 years ago, as soon as the financial crisis hit it was a big flashing red for the survival of the Euro. OK, along with many people I thought it would be Spain or Italy to go down first, but the point is that many people have been expecting a Euro flop. Now it is here many traders are short the Euro. It is the Markets Vs Germany.

Place your bets!

Go Ed Miliband !

Never mind Blinky Balls or Banana-boy -
Ed's the man for us !



ND

Sterling: Time And Tide ...

Well, that didn't last long ... the Emergency Budget had better be good.

And sooner rather than later please, George.

ND

Question Time quiz

No news about the show. Guess the BBC lawyers are still agonising over how to create a balanced panel. Kevin Mcguire is going to look like a team captain if he has to appear every week.

Q1. Is this a new era in British politics
Q2. Did the Tories give too much.
Q3. Ed Miliband to be labour leader.
Q4. cuts..cuts..cuts..vat 21%..cuts Capital Gains..Olympics..cuts
Q5. Is this the end of the Liberal Democrats as grass roots desert them.
Q6. An Ant and Dec type comedy line.

prize is to pick the new leader of the labour party.

Oliver Letwin Has A Purpose After All

Oliver Letwin, a major-league 1980’s leftover, has been banished to the back room ever since he was identified beyond contradiction as a major-league political liability whenever allowed out in public.

Now he is redeemed, big-time. Because the careful and crafty ‘Agreements’ document emerging from the successful Con-Lib negotiations is clearly his work: it has his thumb-prints all over it. Well thought-through, well-drafted (in the time available): I am guessing that it contrasted dramatically with the paucity of Labour’s response when the LibDems shopped the deal – not a bad argument when it came to decision-time for Cleggy and his crew.

An investment banker, Letwin has negotiated a few big commercial deals in his time, and the business-like tenor of the Agreements document shows this well. Business and politics, eh ? Capitalists at Work !

ND


PS - we shall of course be picking over said document with relish in the days to come …

So what is St Vince going to do with is power?

Readers will know that we at Capitalists@Work do not hold a high opinion of St Vince Cable. In fact, one of the highlights of the election was seeing him get torn to shreds by Andrew Neil.

Of all the Lib Dems in Government, St Vince is the worst. A die hard old socialist who has the added spice of massive over-confidence in himself. As business secretary David Cameron has wisely kept him away from the treasury and put him in a department which, lets face it, is going to some big hits when the spending review is done.

More worryingly, Mr. Cable has been put on a new committee to review the UK banks. Now here are a few links, take a look at what Mr. Cable thinks of banking. Of course, he worked at Shell in his career as an economist. Shell being one of the most profitable company in the world has little time for banks, it even has its own prop desk for trading FX and commodities.

Also of course Mr Cable was the socialist most demanding the banks be nationalised, including the total financial disaster that has been Northern Rock. Cable thinks of course this is a good thing, state ownership being better because precious profits go to him and his politician colleagues to hand out to grateful plebeians.
If you doubt this, see here where last year he calls for the guillotine for bankers who get paid bonuses.

So Mr Cable will recommend some nasty medicine for the banks, a profits tax (silly), a separation of investment and retail banking (great idea in theory, hard to do in practice), a control on bonuses (illiberal) and the closure of tax haven units.

The danger is that Mr. Cable decides he can have a private war on the banks, half of whom we need to nurse back to health to try and get our money back, the other half who have a major say in whether the UK remains credit worthy and contribute huge tax revenues already. Of course, the Tories, who two want reform, will get antagonised by this. Clever then to put ex-Banker David Laws, into the Treasury with George Osborne.

No idea what St Vince will do with his business portfolio, as an economist he is singularly unqualified to make real business decisions; great money to be found on him being the first minister sacked in the Government overall (Nick Clegg has no love of his rival either).

Final election thoughts

Final thoughts on the election.
The most important thing being the victory.

Some Tories are clearly angry at what seems a lost election for the blues. Lots of criticism about the big society and the leaders debates.
I'm not so sure these were avoidable though..

Cameron had pushed for the debates from the first days of the Brown government. When Gordon was still Stalin and not Mr Bean and had all the TV presence of a potato. I don't recall anyone saying back then to refuse a debate. How could Cameron, having called for them, then refuse to take part in them?
I expect Cameron never seriously expected the clunky Mr Brown to agree to them. It was only the polling collapse of Labour that did it.
In the end Clegg was the winner. Yet it netted him -5 seats. So the TV debates didn't really change anything anyway.

The 'big society' was clearly a plan 'B'. The talks of austerity and savage cuts and need for strong fiscal government is what caused the sharp drop in the polls. Check the polls directly after that conference for the slide.
Labour capitalised on its voters fears of Thatcher style cuts and bought back the wavering into the fold. Once the 'big cuts today' message, an honesty message, failed, the Tories needed another one. To me the 'big society' looks like a mid term narrative to win a second term in office after all the cuts and pain. I doubt it was supposed to be the main message.

It wasn't a good campaign, but Labour's was worse.
But where Mr Cameron let his supporters down was in not being ready enough for what was coming.

In October 2008 Mr Drew posted a strong argument for a Labour snap election and it was a real possibility. We warned at the time that the Tories needed to be aware that labour was not defeated and were regrouping after some terrible defeats. They suddenly started dumping unpopular legislation and plans. In this reference to the peacetime, between the wars, navy we warned ..

".. the Tories need to stop sitting around in the beautiful teak lawn chairs, on the aft deck sipping gin and tonics and prepare to go to action stations. Dump any clutter, dead weight, ballast, hazardous items or unnecessary policies or people over the side and get their "A" team on the bridge right now.

Because a big and bloody battle is coming, And Admiral Gordon is taking no prisoners.

Cameron did this in the end in the Liberal negotiations.He was determined to win power and so the red lines were few and the offers many. It was a success. But he might want to be better prepared next time.

Gunnery practice first..gin second in future, alright captain Cameron?

That 'Green Economy': GDP Still Trumps GHG

Back to business. While we were otherwise engaged, the EC delayed implementation of the new round of combustion emissions regulations that would otherwise have precipitated early closure of many coal-fired power plants, possibly including the mighty Drax in Yorkshire, Europe’s largest.

This new round is targeting NOx - not itself a major-league greenhouse gas: but forcing early closure of such plants would tend to reduce CO2 as a side-effect. (The longstanding Large Combustion Plants Directive, which targets SO2, is not affected: owners of coal plants have already decided whether they will be complying with this - Drax will - or closing after a set number of operating hours.)

As we’ve said before, economic considerations generally trump environmental when the chips are down – GDP beats GHG. The much-trumpeted Con-Lib enthusiasm for the ‘Green Economy’ will need to be tempered by this very basic consideration – what can we afford ?

ND

Why Have The Right Sat Tight ?

Fraser Nelson was quick out of the blocks vowing to fight a Con-Lib arrangement. Ah, the perils of 24-hour meeja: he quickly shut up, and has subsequently been a model of restraint, concerned mainly that Michael Gove's school reforms will survive in a coalition deal.

Methinks more than one person had a little word with him. Guido was probably the first - "don't do it, my friend" (no nihilist he!) - and we may imagine that one or two people wearing suits were also making similar points. Somebody has also had a little word with Heffer, too.

Excellent. The Tories' discipline since 6 May has been a pleasure to behold (e.g. Redwood, here). They've rediscovered their power-focus. This bodes well, for the difficult months that lie ahead before a re-run of the GE. And it's certainly what the grassroots want, whatever the ultras like to imagine, and whatever a mischievous media would prefer. "This is the election to lose" is oppositionist thinking associated with posturing purists, more usually leftists. No credit to Heffer for wondering thus: "The most difficult point to grasp is why anybody wants to govern this country". Difficult only for a backwoods sniper, matey: practical people seize the reins when they are flapping loose.

There are other simple reasons, in addition to a proper, pragmatic enthusiasm for power. Natural Conservative self-discipline and decency, of course ! But IMHO the main reason is that the Right is properly keen to see the mega-deficit sorted, and knows what a mega-task this is. Here is Nelson again:

"Clegg will take PMQs in Cameron’s absence, and will defend all those nasty cuts (sharing the blame for these cuts is the main rationale for coalition)"

This is a legitimate rightist motivation, and coupled with Red Lines on immigration and Europe (and Trident - but why ?) should be enough to keep the Right in line, provided the first Budget seems sound.

Any other views on why Tory discipline is holding so well in the face of a disappointing result ?

ND

It's over Brown, now go

Finally the charade is over. As Nick Drew spelt out so well yesterday, the Liberal Democrat and Labour discussions were a side track to nowhere. The Rainbow coalition was as likely as Bungle and Zippy getting parts in Hamlet.

So here are the simple facts:

Gordon Brown can no longer command Parliament and needs to go, this minute, to Buckingham Palace. The only alternatives are a Tory/Lib coalition or a Tory Minority Government. Therefore David Cameron is Prime Minister whatever the result and Gordon needs to go and tell the Queen this instant.

So Brown, GET OUT OF DOWNING STREET NOW.

I don't want to wake up to another day of New Labour, we have had enough of this.

UPDATE: HOOOORAY! He's gone, that was really hard, boy did new Labour go down fighting and screaming. Little Dignity from Brown that I could see, despite what the media are pretending.

Has Clegg ever had more than one option

Poor Nick Clegg. He has everything and nothing. And he foolishly fell for the wily old master of obfuscation's overtures. The subtle Mandelson exploiting the novice.
Actually it wasn't that subtle. Throwing a brick into a duck pond to see what happens.

Mr Clegg needs to think about not just what he can get today, but what he can get tomorrow. The Liberal Democrats seem to have the most to lose if a deal does not go through. But a quick look at the others first.

The Tories have the strongest hand. They have the most votes and most seats. They have not talked about doing deals with greens and nats. They want help from the Libs in exchange for coalition. It looks reasonable. Better, it looks fair. The Tories don't even need the Lib Dems, {but they do really}. There is a great level of anger being felt by many in England at the bizarre loser coalition gaining traction.
UKIP had nearly 1,000,000 votes. Add just 20% of those tactically and Dave is in with a majority, Probably at the Lib Dems MPs expense. You can add in those who switched to the Liberals on the back of Cleggmania {Ms Q for one..she is seething..well I told her...}. For extra punch, ensure an English Parliament goes into the manifesto as a priority. Claim that it will permanently prevent England being run by a Plaid/ SNP/Green coalition.
Labour have bust. They did about as well as anyone who supports them could have hoped and they still failed massively. However, they have sort of, dumped their biggest liability. A new Leader, a more media friendly leader and one with cabinet experience, will be chosen before the next election. That should help improve their lot. Activists, who did better than expected, can surely find a few more votes. They can point to plenty of doomed seats that they retained, and many more safe seats that could have been saved if only a few extra voters turned out. They can talk about the great voter lockout as the reason for their defeat and ignore everything else.


Liberals. Oh dear. The Liberals had a great campaign and a poor election. That should be a warning in itself. OK, the possibility of true PR beckons. Labs and Cons are offering something on voting that neither thought they would ever have to give. But can they deliver? Many Labour MPs will not vote it through. They don't need to follow the leader anymore. There is no leader. They don't fear another election either. To many, if they won in May 2010, they will win bigger in October 2010. Tories can be whipped. They are more likely, but not guaranteed, to vote now as the Leader wishes, in the hope of achieving an outright majority soon.

The Rainbow coalition is a bad idea. Nick Clegg must know it is. The arithmatic is against it. All of Labour's and Liberals MPs and all the odds and sods must agree on every vote. The majority is so slim that the whips will have fleets of private cars to whisk MPs from around the Isles for every vote in case they are defeated. A few sick..a few disgruntled..a few bribed.?
And even if it does work, as already said, the English backlash could be catastrophic for the Liberals.
The party who campaigned on fairness and helped to keep the majority party from government.
They lost MPs in May. They could lose many more next time.

Clegg must try to have appeared to do a deal with Labour. Otherwise he loses his Lib/Lab supporters which are many. They will go back to Labour from whence they came.
He should have done it far more openly for both his potential suitors and his own members to see, but lets hope that is what he is doing. Appearing to have tried his best for a 'progressive' government and gaining significant concessions from the Tories, before recognising the impossibility of it working and leaving it to be a 'what if' question in the political history books.

UK Now Squarely In With The PIGS

With the Euro-bailout operation successfully concluded (for the time being), bond yields among the PIGS have fallen. Meanwhile, the UK's position is inching towards the precipice: bond prices down, yields up, and the situation is as follows - 10-year government bond yields as at 10:00 today

Greece 8.12 %

Portugal 4.87 %

Italy 4.05 %

UK 3.97 %

Spain 3.95 %

So there we have it. No better than PIGS. Finger out, Clegg: ditch Grandpa Cable - he's not needed on this voyage.

ND

Exclusive: Banks to be broken up in Con-Lib deal

A source who has been privy to the detail in the Con-Lib negotiations has told Cityunslicker that a deal to separate Investment Banking and Retail Banking organisation is one of the key policy platforms to have been agreed upon.

George Osborne has of course advocated this in the past as a solution to the long-term instability of the UK having four banks which are nearly as big in assets as the UK GDP. On the Lib Dems side, the City has been horrified at their smash the City mantra.

I would not like to own shares in the likes of Barclays or RBS when this news comes out, at it will be a big cost to share holders to split the businesses and lose all the benefits that the stable cash generative retail bits give to the high risk Investment Banks.

Quite how this will work for overseas institutions I do not know.

Some of the banking shares were the biggest benefactors of the stunning rally today; on the back of the EU debt Union which has been de facto announced. Seems like the people of Germany are going to pay for the Euro after all and subsidise the PIGS trough.

No prizes for guessing the effect when this gets out.

Don't Misread Clegg's Latest Move

There comes a point in any big negotiated deal - usually just before final closing - where one party sees the need to get an alternative bid on the table. This is primarily so that they can assure their stakeholders that the proposed transaction is the best available, that no obvious trick is being missed. It's called "shopping the deal" and it happens all the time. Huhne, from a business background, will know all about this tactic.

It can be pretty frustrating for the other party - but even more so for the alternative bidder who, 9 times out of 10, is being lined up for a Fail. They always get their hopes up, it rarely does them any good.

I strongly surmise this is what is happening right now. The commentariat, less familiar with these things perhaps, is hyperventilating - even Mr Dale opines that 'you can't ride two horses at once'. Well, yes, you can. But not for long; and the favourite wins more often than not. The Libs always like a two-horse race !

In the words of the song: if you can't ride two horses, get out of the circus.

Have faith.

ND

They Never Change Their Spots

There has been a constant strand of commentary along the lines: this is the election to lose. Show me the Party that adopts that thinking ! Not Labour, for one. And Gordon Brown will no more step down until he is forcibly ejected; emphasis on force.

Mandelson and Campbell never stop plotting, never stop briefing, never stop fielding people for the TV studios with carefully rehearsed lines-to-take. This is in stark contrast to the remarkably disciplined and discreet manner in which the Con-Lib negotiations have been taking place - no leaks, no briefing, no unseemly rush to the cameras. It almost conjures up an era before 'spin' meant anything other than cricket-balls and washing-machine cycles.

If I were Clegg, Huhne or Laws, the sight of Campbell and Adonis spinning away the evening hours on TV would convince me that alignment with Labour is a non-starter. Imagine having to trust such people day-to-day.

On Sunday I attended a very large gathering of Conservatives. Notwithstanding all the sniping and probing from the likes of Fraser Nelson and other ultras, all the talk was of hope - hope that the Deal can be Done. Obviously, minority government is an option; and tactics for a short period in opposition to a 'Rainbow Coalition' wouldn't be difficult to execute.

But the Deal's the thing, and I rather imagine it will happen.

ND


Footnote - as Nick Robinson has just pointed out, Campbell - unelected; Mandelson - unelected; Adonis - unelected ...

Equitable Life: Another Point of Con-Lib Agreement

Alongside the areas of High Policy where Cons and Libs should be able to find common ground, is a less well noticed overlap in the respective manifestos - on the subject of Equitable Life. Scandalously, NuLab never had any intention to sort this out, even in the face of clear recommendations from the Parliamentary Ombudsman. Surely Brown wasn't miffed at her ringing verdict: "A decade of regulatory failure" - ? No, that wouldn't be like him at all.

So what do the Tories say ?

"We will implement the Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders"

And the LibDems ?

"We will set up a swift, simple, transparent and fair payment scheme"

If there's to be another election soon, implementation of this joint promise will cement a few anti-Labour votes.

Declaration of interest ... I leave you to guess !


ND

UK election; not even a sideshow thanks to the German Election

That Greek thing, you the one we all keep talking about but no one does anything about?

Well it is a big deal in Germany, the people there like their savings and stable currency and do not want to jeopardise this for anyone else. In fact they have just voted in the largest state and Chancellor Merkel's party have lost.

This mean the EU bailout is again under pressure. The markets tomorrow are going to tank unless there is a big announcement tonight. Basically, the EU core needs to make like the bank crisis and bail out the PIGS or else we are in armageddon.

However, much like the bank crisis, this maybe a short term answer to longer term disaster.

Anyway, rest assured, no one in the markets it thinking about Cameron and Clegg, they will have a few days yet, albeit the FTSE is going to really struggle to stay over 5000 and UK Gilts are likely to go north of 4% yield.

Will the markets wait for Cameron?

Er no, unless the Tories and Dems get something sorted by tomorrow then more instability it is. What is amazing is the confluence of events.A major breakdown of high frequency trading, the Greek bond crisis and the UK election.

The Greek bailout is complete. the US could rally, we could have a deal for coalition. There may be a big bounce next week. I don't feel that will be the case, but my hunches have been wrong all week and now thy hurt!

Coalition Politics

And so it comes down to the smoke-filled rooms. I posted two weeks ago that, as second-best, a Con-Lib understanding needn't be too hard to reach (and I don't know why so many commentators see Trident as a stumbling-block) - so have it, chaps.

I'm rather hoping this is where Osborne comes into his own. This blog has long found fault with the Boy George as both putative Chancellor material, and as any type of front-man at all. But he is said to excel at the back-room stuff. Perhaps it is true.

But here are a couple more thoughts.

(a) It will be ideal if Brown stays as Labour leader, while a Con-Lib process runs its course. Worst case would be that Brown goes right away, and a Con-Lib accommodation gives Labour a quiet summer during which to run a disciplined leadership selection (similar to the Conservative version in which Cameron prevailed, in a most constructive and conciliatory manner). It helps that Brown will probably hang on and on, rather than following the Major / Hague / Howard example.

(b) Drew's Second Law of Politics is: never buy off anyone at too high a price. In this case Mr C, don't offer anything by way of electoral reform that doesn't suit yourself. As I've said before, the Tories very much need a system that automatically alters constituency boundaries, on a rolling basis, to correct for the ratchet effect of ongoing demographic change that systematically disadvantages their cause. There should be an even-handed deal to be done. In any event, the arithmetic is clear: Clegg has nowhere else to go for genuine influence at this stage.

As I write, Nick Robinson is declaring that only by being propped up by Clegg can Brown continue. I disagree. He can continue by being a stubborn bastard, arguing that until the Con-Lib picture becomes clearer he must stay at the helm to exploit whatever opportunities happen along.

And as Dianne Abbott is continually reminding us, there is no easy way forcibly to remove a Labour leader - and no way at all to do so in anything under several months.

ND

Afterthought: During the campaign, Clegg was careful never to insist on anything more than a rather vaguely-termed 'fairer system' - and even Simon Hughes on the C4 News this evening kept his remarks to this modest level. This looks like responsible politics.

A Stiff Whisky In The Library ...

... before collectively picking up the revolver ?

Diageo sales up 12% in the 1st Quarter.



ND

What Happened?

Ed Balls - Morley and Outwood {+25% ish} .......................... in by a whisker
Yvette Cooper - Pontefract and Castleford {+46.6%}.......... in
Alistair Darling - Edinburgh South West {+16.5% } ............ -in
Hazel Blears - Salford {+32.7% } ............................................. in {but a huge swing to LD}
Jon Cruddas - Dagenham {+14.9%} .......................................... in
John Bercow Buckingham {+38.1%} ...............................................No result
Luton South - Exiting Marge Moran {+14.5%} will it go to Esther? ........out
Jacqui Smith - Redditch {+5.1% } ..........................................- out
Phil Woolas - Oldham East and Saddleworth {+2.8 } ...........no result
Bill Rammell - Harlow {+1.2%} ............................................ - out

Poll of polls -
Capitalists comments predicted

Con 37.5
Lab 27
Lib 26

	Conservative	289	+91	36.1%
	Labour	246	-85	29.2%
	Liberal Democrat	51	-6	22.9%

Overstated Con a little and Lib a lot. Understated labour quite a bit.
But so did everyone. Yet the Tory total will be around 25 short... much as we thought.

So..nobody won.

With Labour out: the Labour years, redux

OK, we know now that Labour have suffered a heavy defeat. So what has been the result of their untrammelled 13 years in power. Let's start with Inflation:

CPI since 1997 +25%
RPI Inflation since 1997 +40%

Compared to previous Governments, that is actually not too bad at all, not great on RPI, but OK for 13 years out of the last 100.

FTSE 4647 May 1997
FTSE 5380 May 2007

This is not so good, this is a mere 18% up over the 13 years. Major managed 115% in five years and Thatcher over 300%.

Worse, since Gordon Brown became Prime Minister teh FTSE is down -18%

When you add in the effects of inflation then the FTSE performance is woeful, even taking into account the payment of dividends, which takes on about 4% per annum, does not cover RPI inflation.

Labour has not been good for the markets that is for sure.

Now onto the Public sector, two figures say it all. When Labour took over the % of spend of GDP on the Public Sector was 38%...now it is 52%!
The National debt, built up and paid down over 400 hundred years, was 42% of GDP and falling in 1997, it fell down 30% in 2001 as Labour followed Tory policies. Now though it is over 60% and is set to increase at over 10% a year for the next 4 years at least.

Horrific. Worst Peacetime Government ever, easily.

Damned If You Do ...

Here's a great piece of fence-sitting by Moody's, as reported in last night's Evening Standard.

"If [the next UK Govt] were to tighten fiscal conditions too quickly, this could potentially choke off economic recovery. Alternatively, if the UK did not tighten fiscal conditions soon and credibly enough, ... market opinion may move against the UK".

And these people hold our AAA-rating in their hands. I am sure the incoming Chancellor will thank Moody's kindly for these pearls of wisdom.

ND

View from the City on Exit Poll

 By way of record, oi have been speaking to a number of senior City types this evening, here are some of the quotes:

"The big fear is that the Lib Dems get anywhere near power, their crazed policies of attacking the City and demanding an end to bonus's and high wages is simply insane. Any chance of these policies becoming law really would push the hot money out of the UK and into the Far East" MD, UK Owned State Bank

"With the market ructions this week it just shows how important stable Government is. I am hopeful of a slight Tory majority still, but a minority Government probably will not be too bad. The Markets will be glad to see the back of the Government pretending all was well as Rome burnt" Trader, Large American Bank

"I am surprised at the lack of impact of the Lib Dems, my daughter voted for them with all her friends today. Maybe a bit of a shock to them that the X-Factor does not work in the real world" Partner, City Law Firm

Meanwhile ... Gold Soars

Turmoil everywhere, and nowhere better illustrated than in the gold markets, where this very evening the yellow metal set all-time high price records against Sterling, the Dollar, the Euro, the Swiss Franc, the Yen ... etc etc - have a look here.

The whole world is melting down !

ND

US Dow Jones collapse

The effect on the City of the election is said to be crucial. Well here is some news, the FTSE is going to fall at least 100 points tomorrow, a big dip.

Why? Well thanks to the Greek crisis the world markets are starting to resemble the markets of 2008 in their panic. The Dow was down over 1000 points at one this afternoon. It closed 347 lower.

The big noise was in Proctor  and Gamble, the consumer products group. It fell 37%! This is very strange, already the NY Times is reporting there may have been a malfunction in an Exchange Traded Fund on the Nasdaq which has caused panic.

On a personal note this shows the danger of stop losses. Bad things happen, markets fall, then you get stopped out. If it all turns out OK the next day, you are stuck with your loss.

Exit Poll shock?

The Exit poll from the UK election is suggesting a Hung Parliament with the Liberal Democrats losing seats. Something does not smell right. I have had more people tell me they are voting Liberal Democrat today than Tory, the first time I have ever heard that. Only one person voting Labour (about right for the world I live in).

Let's see what happens over the next few hours.

Live On Air ...

... with the Band of Bloggers, on LBC between midnight and 6 am.

Tune in on 97.3 FM (London area), Sky Channel 0124, or live streaming at www.lbc.co.uk

How is business affected by the election ? And what is business saying about the election ?

Post C@W-style stories, reactions, comments etc in the comments below, and I may be able to give you your 15 seconds of glory !

ND

Election Special

Time to predict.

No Question time as there seems to be some event going on at the BBC.
Instead ..election results prediction please.

The c@w readers are the most informed, educated, intelligent and reckless on the internet.
Do you think the late Con surge will take them to 40%? The Lib Dems have faded but will the tactical vote call earn them 30%? Will Gordon stay on and still be in No 10 not just tomorrow, but for another five years?

Place your seats and % numbers into the comments.

And while you're thinking about it watch the short video above to help to remind you of some the faces from the political bubble.

Plus a special IS IT SAFE competition
Is the political seat safe or unsafe?

Ed Balls - Morley and Outwood {+25% ish}
Yvette Cooper - Pontefract and Castleford {+46.6%}
Alistair Darling - Edinburgh South West {+16.5% }
Hazel Blears - Salford {+32.7% }
Jon Cruddas - Dagenham {+14.9%}
John Bercow Buckingham {+38.1%}
Luton South - Exiting Marge Moran {+14.5%} will it go to Esther?
Jacqui Smith - Redditch {+5.1% }
Phil Woolas - Oldham East and Saddleworth {+2.8 }
Bill Rammell - Harlow {+1.2%}

10 out 10 right anyone?
http://www.electoralcalculus.co.uk/

Download:

FLVMP43GP

Election Night with Capitalists@Work

On election night I shall be one of the Band of Bloggers covering events for LBC between midnight and 6 am.

Tune in on 97.3 FM (London area), Sky Channel 0124, or live streaming at www.lbc.co.uk.

And send me stories ! I'm there to cover the usual C@W content - so anything from the worlds of business, finance, investment (but probably not TV script parodies, satirical poems ...). Put them in the comments under this post, or another post that I'll put up tomorrow, and if they are fit for the airwaves on a family show, I'll read 'em out !

Friday morning it is.

Nick Drew

Mr Market waves at the UK Electorate

Well, a pretty good call to short the FTSE yesterday has helped me stave of disastrous losses to keep them as just hideous. Many of my investments are in high risk AIM stocks and these have all taken a kicking this past two weeks, down 20% in places.

What this shows is that the risky 'beta' type trades are being cut back by the Hedge funds and Prop desks; as well as by the retail investors.

All are waiting to see what is going to happen in Europe with the Greek bail-out and more parochially with the UK Election. I expect plenty of cash is being freed up to short the FTSE 350 if there is a hung parliament on Friday. On the contrary a narrow Conservative win is going to cause a nice 3%+ bounce.

I don't even want to think about a Labour largest party result!

What this does prove to me is that Ken Clarke and George Osborne are correct, despite the catcalls of the ignorant lefties; the market will judge the electoral result harshly. You can see it in the markets already, clear as day.

The lefties might wish this problem away, but that does not change the facts.

What is interesting is the move in UK Gilts, bolstered to good levels (4% interest on 10yrs) by the fact that we are not Greece. These are ripe for a fall if there is a hung parliament.

I think I need to free up some more cash.

So how is Mr Market covering the Election?

This election thing in the Uk is going really well for the markets, as the prospect of a hung parliament hardens to reality the markets have taken a real dive. I can't see much point in betting on a FTSE rebound in this short-week, bar a Conservative solid majority on Friday which would require the pollsters to be very wrong in thep prognostications. Some cash today invested in a short FTSE ETF for me.

Politician@Work: Mandy Lost For Words ?

A healthy respect for Mandelson's baleful creative genius is generally in order. But, doubtless exhausted by several weeks of managing Brown - the most difficult job imaginable - he has penned a piece for the Inde which has seen him with nothing left in the locker, save a mix-and-match of limp, recycled confections from this campaign and even earlier. He has scrabbled around in his muck-heap of crapulent coinages, and all he can come up with is this.

"a man who has been tested ... these are serious times and they need a serious person. It is no time for novices, the worst possible time to take a gamble ... Get those big decisions right ... get the big decisions wrong ... the Tories – a massive gamble ... got every big judgment wrong on the recession ... now they are getting it wrong on the recovery ... a three-horse race"

And that's all they've got.

He must be saving himself for the frenzied round of conspiracy that commences on Thursday evening.

ND

Bloody Bank Holiday repeats.

Video from May 2009.
Probably even more appropriate now.





Question: What should Gordon do next?
Where should Gordon Brown go now?

Labour throwing the election thanks to scorched earth policies

On this blog the three contributors have long been in agreement that the Labour Government knew the game was up on New Labour a long-time ago. As such they decided to make things as rough for the Tories as possible.

Labour new from 1997 the benefit of taking over an economy that was in good shape. It brought them another election victory subsequently and the Conservative opposition could do nothing about it.Then in 2005, when the economy they had inherited was burdened too much by public debt, they simply borrowed money at the top of the good economic cycle to hoodwink the voters. That set Labour up for the 2005 victory.

Now in 2010, the world is in deep crisis. Think of some of the headlines of the Greek Crisis, VAT up to 23%, public sector real wage cuts of 16%. Any country will do well to survive such measures as a democracy.

In the UK the Government knows full well the tab it has run up. That is why there has been no discussion about its record in the campaign, which rests solely on attacking the prospective Tory Government. This is not a strategy designed to win, but designed to lose with core vote intact...able to come back in 4 years time when the country will feel like blaming the new Government.

Times move quickly I note in the US that Barack Obama is blamed for making the recession worse by many of his opponents. He came to power in the middle of the crisis, entirely caused by political and economic mistakes of many years before his period of office.

Tory Bear also has a great list of the Labour Party mistakes of last week. A few would be a coincidence, but this is the worst run campaign I have ever witnessed and has been years in the making/planning. This just does not sit right.

Of course, as Labour are incompetent, they no doubt failed to see the rise of the Lib Dems; neither did anyone else. This makes their strategy more risky, but ultimately more lucrative too if things go right. If we end up with a Lib-Con Government, then Labour will be the official opposition and afforded that base to work with. The downside is that a narrow Tory win and big gains for the Lib Dems will see Labour have to work hard to re-assert themselves as a party of more than the inner city immigrant and Northern non-working classes.

Labour have seen the books though, others too. Mervyn King's slip of last week is a classic - he can see the same as Labour. They never wanted to win it and it is really starting to show. It will be interesting to see how this political strategy plays out for them over the next parliament.

Weekend fun.

From CU's post.
The Tories are going to win on Labour's terms - when they have to enact horrible policy they may end up hated for a generation. Will Cameron's be lucky enough to find his own Falklands before his term runs out?

The cuts are going to be deeper and harsher and probably less fair than the Thatcher years. There won't even be tax cuts to help grow the economy.
The Tory/Lib pact is going to need a get out of jail card. Something to fall back on for an election in 2015.

Margaret Thatcher's Falklands moment was, despite the socialist warmongering propaganda, an unforeseen event And a hugely risky one. Without success in the islands the 1983 election would have been lost. The Falklands changed Britons image of themselves. The end of the sick man of Europe. The start of growth on a par with other European countries that had been absent for 15 years.

But Dave needs a plan in hand. What is the vote winner? What is in that box marked 'Only open in case of emergency', encased in lead and sealed deep in a disused nuclear silo.

What could that plan be?
economic ?
social ?
military ?
criminal?