A look back at Jacqui Smith's tenure.

A quick look at Jacqui Smith's time at the Home Office.
She hasn't suffered the same level of anger from her constituents as Julie Kirkbride did from hers. Both were popular MP's but somehow JS seems to have escaped the wrath that forced Kirkbride to quit. Quite how Jacqui manages it I have no idea. The "Timney" letters were enough to discredit her completely in my eyes a long while back. Since then she has soared ever lower.

Still she was the first UK female Home Secretary. A place in the history books assured. Even if only as a perfect example of the Peter Principle in action.

Return of the Pound; Get your summer holiday money now!

The UK Pound Sterling, long-suffering under the control of Mr. A Darling and Mr. M. King, has staged something of a rally these past few weeks.

Not long ago sinking below parity with the Euro was the talk of the town and reaching parity with the US Dollar. But like a phoenix from the flames, the pound has reached nearly 1.15 to the Euro and the US Dollar rate is a mighty 1.64 today.

Behind the rises are a big move in closing short positions on the Pound and also a flight away from the dollar into more risky assets. As such demand for dollars goes down and so the currency falls.

However, there is no sign as to whether this is a longer-term trend coming into play. More likely, this currency reversal will itself reverse when the equity markets end their rally in the next couple of months.

As such, if you are planning a trip abroad over the summer, think carefully about when you buy your currency. Now may be a good time if you can afford to put the money aside. Alternatively, watch the global markets, if there is a strong downturn the currencies will follow quickly, so don't dither.

Franco-German Lynch Mob Approaching the City

While Brown fiddles . . .

Gordon Brown is (to use William Hague’s memorable phrase) ‘on manoeuvres’ in every broadcasting studio in the land, trying to sell his mendacious official lines on recent political history, and to deflect the nation’s attention from his manifold sins and wickednesses with risible constitutional plans.

Thus is his own attention deflected from the serious stuff that is going down at the court of President Barroso. The green-eyed Euro-monster has decided to lay claim to future financial regulation, the better to strip London of its central position in world finance – an ambition long nurtured in Frankfurt and Paris alike. The lynch-mob is approaching the City.

Personally I am ambivalent on Euro-regulation: in my own sector (energy, in case you hadn’t noticed!) the Commission is squarely on the side of the angels, and has battled manfully and tenaciously against entrenched Franco-German resistance to open markets.

But on financial regulation I fear the worst. We weren't *ahem* entirely fullsome in our praise here (and here ... and here ... and here ...) for the Turner Review - but at least the FSA is dealing quickly, fairly openly, and with some degree of sophistication with the right issues. Brown – if you are not going to call your innings to an appropriately early close, at least get out there and slog for Britain against the barbarians.

ND

Sell in May and Go Away

Today is June 1st 2009. Any historic look at the markets will tell you that between now and October every year, there is an almost guaranteed annual decline in the value of stocks and shares.

However, this year is of course different (as always!), as we are in the midst of the worst recession since WW2 (and off topic, I agree with this article strongly, suggesting politicians have forgotten all about the economy as they wallow in their own self-pity).

And yet for all that, the markets have surged 28% since march 2009. All on the back of nothing else other than everyone is not going bust. Banks and Property share prices have rallied from near death to stable. Commodity prices have come back up, with oil at $66 up from its low of $33 and this has pushed up oil and mining stocks.

Is this correction now priced in? It has to be, there is still so much bad news to come in the commercial property sector, in government debt, in unemployment, in demand for consumer goods, in mortgage supply.

To top all that, inflation has not gone away like the Bank of England said and we may well be poised to raise interest rates before the end of this year, which really will stall any recovery.

Now is a time to think carefully about ones investments and I am going to review mine. I will update here when the decisions and changes are made.

Sunday Return

I am back online today (Cityunslicker here) after two weeks of no real blogging. Quite refreshing, well partly anyway. How can one spend to much time with their wife and kids after all....?

Anyway, I return to see two things that have surprised me after my diet of SKY news for an hour a day. Firstly, the FTSE has hardly moved, despite the clear end to any hopes of economic resurgence. Last time I looked Chrysler and GM were going bankrupt and British Airways was announcing horrific losses.

Also somehow Labour have become even more unpopular than ever. This is some achievement as they do not actually seem to be doing anything at all, which generally by reckoning is the best thing politicians can do. I saw Gordon Brown on the Andrew Marr show this morning and he did quite well given the oddly tough questioning. His delusion about his own success and intelligence is something to behold. I think Orwell warned us about lefties like this...

Oh, I think I still have my job too, confirmation at 9am hopefully.

Vote UKIP in the European Elections?

The European Elections are on June 4th. Even before the expenses scandal I was confused as to whom I would vote for. I have always been quite eurosceptic in my views, but have voted Tory the last couple of times on the basis that I know this is a party close to my own views.

However, I wonder how much of a message is sent to the leadership by the big share UKIP get in the Euro elections? And not just the Tories either, the Lib Dims and Liebour must see the loss of votes to the single issue and consider their own positions.

Now this year we have Libertas too and is a pan-European approach to reform the right way to go? It could be, but then maybe this is too long a project and the UK simply needs to re-negotiate now.

All advice welcome.

CU

How Nadine Dorries blog got taken out.

The Barclay Ultimatum

Synopsis: Nadine Dorries is trying to to run operation Shredstone, the deflection of the media from expense claims to other matters, when the Daily Telegraph's FBI {Frauds and Benefits Investigator} calls with some tough questions his shadowy bosses want answered.

Gazprom "Cuts The Gas"! We Were Warned ...

Russian Energy Policy – The Musical



Back in February, the Russian gas monopoly Gazprom gave us all a chuckle by threatening “cuts in European exports if gas demand slumps”. Well, they’ve been as good as their word, because, as the Times reports, Gazprom now plans to

“reduce natural gas output by up to 18 per cent this year due to falling demand from recession-hit countries”

That’ll teach us ! Coincidentally,

“The company gave no reason as to why it had further reduced its dividend”

For those unaware of gas industry basics, there is a very distinct limit to the amount of gas storage available, and it all gets filled up every summer anyhow. You either leave it in the ground, or flare it off; and even the Russians aren’t too keen on the latter these days.

So – gather round and feast your senses on the video-clip above!
A genuinely hilarious contribution to understanding energy policy, courtesy of one of those splendid Russian military choirs.

ND

Fixed Term Parliament for Tory Manifesto

As the furore about MP's expenses drags on, the speaker has stepped down and calls made for a General Election to be called.

I can't see labour going for an election where they will be wiped out. So no chance of that. It is though a disgrace of our system that the elected leaders can game the system like this.

If David Cameron is serious about cleaning up sleazy politics, then having a fixed term parliament is one obvious choice. 4 or 5 year term matters not, what matters is that the Government no longer controls its own destiny. that is left to the people and the ballot box at set interludes. But will Dave just do a Tony and promise things that he would never seriously consider giving up. Election timing is the biggest election advantage an incumbent administration has.

There are other options too, such as electing some members of the Lords etc. All this needs to be decided upon. Yet another of Tony Blair's odious legacy was to leave our constitution in more of a mess than it needs to be.

Cameron called for change in his speech the other day, but would you like to see.
Single chamber?
Fixed terms?
Open primaries?
MP recalls?
Anarchy?

Make your preference known because this is the hot topic for 'election-to-10'
{I am still on the beach,barely reading the papers. So if Gordon has resigned or N.Korea fired an ICBM just ignore this.}

CU.

Yet More Realism on Energy Policy

A month ago we reported that a new wave of realism had swept through the DECC (crazy name, crazy logo), and sure enough, a few days later, along came Ed Miliband’s brutally cunning new plan for coal.

We are pleased to say that the new realism continues unabated. This, from a senior DECC official – who can’t be named, it wasn’t that sort of occasion, but it’s verbatim:

“The development of considerable amounts of new nuclear capacity – which is base-load – and considerable amounts of new renewables capacity – which is intermittent – is potentially incompatible …

Nice civil service understatement, there.

… and would result in the need for a great deal more grid interconnection with mainland Europe. The National Grid is working a lot of scenarios”

What this refers to, is that the only way Denmark and northern Germany manage (just about) to tolerate so much lame wind-powered generation is that they have ready access to the instantly-available back-up from Scandinavia’s plentiful hydro-power, to which they are connected. We aren’t. The UK’s hydro resource is de minimis.

So - Whitehall knows the score: this is all about Telling Truth to Power. About Power. If you see what I mean. Hopefully, the grown-ups are listening.

Meanwhile, National Grid are loving it. The crazier the UK’s electricity generation mix, the more they have to invest to accommodate it all – at guaranteed rates of return ! What’s not to like ?

ND

Newcastle United count the cost of failure

One look at the sponsor should have been enough of a warning.

On the radio fans of Newcastle United were putting the blame squarely on chairman Mike Ashley, after the club failed to come close to beating Aston Villa, and will now drop from the Premiership into the Championship. Mr Ashley might feel a little aggrieved at the suggestion that its all his fault.

He spent some £180 million of his £950 million fortune on the club. The 2008 accounts show that having bought the club for £134m, Ashley paid off borrowings of £43m and cleared the overdraft, paid off the previous owners and hangers on, lending the club £100m on which he has chosen to waive interest. He has not declared a dividend nor paid himself a salary.

The club will face a massive drop in revenue with its fall from the top flight. Premiership clubs receive around £30 million from Sky. Championship clubs around £3 million. There will be parachute payments of around £11.5 million to tide them over but with a £73 million wage bill alone there will have to be a sale of players, staff and probably fixtures and fittings too.

Liverpool University’s Professor Tom Cannon said the massive cut in TV money would be added to by drops in season ticket sales, a fall in sales of merchandise and a collapse in money coming from corporate entertainment and sponsorship. I take some issue with the prof in the terms of Newcastle.

1} Luckily the arrival of Keegan and Shearer probably means season tickets for the 2010 season, sold at premiership prices, were well advanced.Possibly for 2011 too.
2} They have the most loyal fans. They will turn up if it was the Conference League.
3} Merchandising will continue. If Mr Ashley does know one thing its how to create a buzz out of nothing. Sales and BOGOFs and Alan Shearer golf clubs and polo tops etc. Its his talent.

However with no relegation clauses inserted into players contracts, as they never thought they would need them, Newcastle will have to sell players. But who have they got? And how much would they get for the 33 man strong first team.
Michael Owen, who takes home 10 per cent of the wage bill, and Mark Viduka are in the final year of contracts and would together cut £9 million in wages. These two are probably the jewels in the team but the pacey young Owen of the 1998 World Cup era is now 31 and injury prone. Mark Viduka is 34 in October. Nicky Butt is also 34, Damien Duff 30. The younger boys may well find a price but Alan Smith hasn't done well since Leeds, and Kevin Nolan has only just signed. Joey Barton the £13 million signing may well end up staying, as who is going to take the risk on him, and Newcastle will probably need a bruiser in the Championship. Obafemi Martins should find a home in the Premiership but Jonas Gutierrez {£9 million}, Xisco {£5 million} and Fabricio Coloccini {£10 million} are likely to attract low bids

So poor Mr Ashley is about to lose more of his fortune. He put the club up for sale in a credit crunch. There were no bidders. Probably be fewer now its in the Championship. And for all the money he spent he gets grief from the fans.

I asked a very good friend of his back in January "Why is he doing it? Why put yourself through this media barrage. He doesn't need it. Why sit on the terrace listening to partisan, unrealistic, reality challenged fans, when you could just sit on the beach? What's he possibly going to learn? "

"Its Mike isn't it. He likes football. He thought why not?" came back the reply. "On balance, he should probably have just bought a season ticket, not the whole club."

Quite.

Weekend post: What would you like to see here

So you are here reading this blog, hopefully you have been before. We want to know why..

What do you like about it?
What issues should we discuss?
What don't you like?
What should we do more of or less of?

Let us know, it will hopefully help to improve our quality. Soon we will have to make a stylistic upgrade, so any feedback now will be most useful.

Thanks

CU

Brownadder's Bunker

The enemy forces are pressing hard. The Daily Telegraph has been firing heavy artillery shells onto the Labour lines, doing terrible damage to the party. Captain Brownadder and his platoon take refuge in the bunker.

"They're still pelting us pretty heavily sir," said lieutenant Geoff Hoon, withdrawing his head in from the doorway."Moaning Morans, Bouncing Bryants, Moating Hoggs. Its damned lethal out there."

Captain Brownadder sat on an upturned, empty money supply crate and nodded. "Stay away from the door Geoff. How long has this attack been going on now?"
" Since 7 Oct 2007 sir." answered a grubby Pte Ed Ballsdrick," You remeber sir. The day you bottled out of a snap election. That was when the attacks started."
Brownadder shot him a withering look. "I meant 'The Daily Telegraph's' attacks, imbecile. You really are as stupid and pointless as a BNP election broadcast."
"Thankyou very much sir," beamed Ballsdrick.

"Fifteen days now sir. Fifteen long days. I hear the Speaker bought it,"said Lt Geoff.
"Don't be silly Geoff. The Speaker never buys anything. Its all on expenses."
"No sir, its true. Apparantly he was trying to organise a charge against some stolen expenses data disks and got hit by a Clegg. Went off in his red face. And Colonel Chaytor. Tried to cross the taxpayers armed only with a "unforgivable error in my accounting procedures for which I apologise unreservedly" excuse and they found him in no-Mp's land, suspended on the wire."

"Well., its been as bloody as a Glasgow by election," mused Brownadder. "An almightygreat blast of public anger swept through the officer's mess and blew the legs off Captain Andrew MacKay’s re-election plans. Hazel Blears took some of the fire too. She was discovered mortally wounded in a ditch. Next to Shahid Malik's head. And Sergent Elliot Morley's arse. "

"And don't forget those chaps in the RFC,"said Ballsdrick.
"Who?"
"Those Royal Fraud Court fliers who crashed and burned. Lord Peter Truscott and Lord Thomas Taylor. Did a bit of acrobatic ammendments. Tried to loop-the- lobbyists. Went up-diddly-dum-up and down-diddly-crashed and burned."

"Well that settles it. We will stay in here until the worst is over," said Brownadder with finality.
"How about I read some of my war poetry to pass the time?" pleaded Pte Ballsdrick.
"Oh do let him sir. It is really good. Year two sats level at least."
"Well, and with a due sense of foreboding, OK," agreed Brownadder warily.

Ballsdrick stood up and and cleared his throat. "This one is called..

'The election'

Elections are a horrid thing,
Unless we win, win, win.
So to save our skin.
We spin. spin, spin.

"Oh bravo! That was marvelous wasn't it Cap?" exclaimed Lt Geoff.
"Well, it was a bit like a Sir Gerald Kaufman expense claim. It started badly. Exceeded reasonable bounds in the middle, and strayed beyond limits at the end, but on the whole, excellent!"
"I've got another one sir!"
"Oh shame."
"Its called

'The economic cycle'
'Boom, Boom, Boom, Boom.
Boom,Boom, Boom -
BOOM, BOOM,
BOOM, BOOM,
Boom, boom, Bust.

Right. You and Lieutenant Geoff have both been flipping houses ?"
"Erm yes. How did you know?"
"Because you're flippin' useless. Why don't you wait outside until it all blows over. "
"OK sir. Can we take our patio heaters?"
"Just go" sighed Brownadder, as he slumped down to wait out the storm."

Previously..
The Brownadder tries for a Fourth term
Part 2
Part 3

The Crumbliest Flakiest Prime Minister in the world.

Bank Holiday Video.
We urge Gordon Brown to take it easy, relax a bit and phone a friend.

Weekend Puzzle: Bumper Bank Holiday Edition !

There are three things wrong with this picture of Westminster. Can you spot them ? Answers below !


Which Prime Minister is out of place ?
Answer at the next PMQs !

I'm a celebrity.. to get you out of here.

Margaret Moran is back in trouble again today. The F/T has the scoop. It seems Mrs Moran has used her Commons staff to work for Equality Networks (EQN), a non-profit group of which she is the non-remunerated chair. Michael Booker, her fiancé, is one of two company directors. The Financial Times goes on to say they have seen hundreds of documents dated from 2006 to 2008 show that Ms Moran used her parliamentary staff to write funding bids for EQN, telling one that the salary the individual received was tied to working for EQN. Her constituency office also helped organise “great networking opportunities” at EQN conferences with ministers personally invited by Ms Moran.

Recently the home flipping, dry rot claiming, scandal hit MP has received an endorsement from the local Luton Labour Party who are very happy with her. They are happy for her to stand and would not consider deselection. It seems that the sea change in politics has not penetrated Luton yet. We fully expected Gordon Brown was preparing to over rule the local party and find a method of removing a damaged candidates, with Ms Moran featuring top of his list. That was before these new allegations.

The reason for wanting Maggie gone immediately is obvious. A well known media celebrity, Esther Rantzen, has threatened to stand to oust Marge if she runs again. This would be hugely damaging to the government. It matters not whether Esther is a good candidate, or what her policies are on European farming subsidies, or her views on Luton transportation schemes. It only matters what her views are on Margaret Moran. These are what will fill the news columns and airwaves. With every breath she reminds the voters of Luton and the voters of the UK, about Labour sleaze. Never mind that Andrew Mackay of the Tories has been claiming double bubble with his wife Julie Kirkbride, a Tory MP, and both have also just received the full and insane backing of the Conservative Association. As yet they don't have a celebrity standing against them.

Mrs Rantzen can appear on Television or radio just by calling a few old friends. She has a media platform. She knows how to operate. Politically she may come unstuck. But the first attack by Margaret of "What does she know about politics? What skills does she have to represent the people?" will be countered by her Childline charity work.

The expese claimer of the year MP who charges £22,500 for her lovers house to be repaired versus the nice lady who knows that dog that says sausages. Its media Gold!

The actress Joanna Lumley appears to be coming out today to announce a hard fought victory and a total government U-Turn over its policy towards ex-servicemen. The government has discovered that it didn't matter what it said or how it presented its case. Joanna had a perfectly clear message. She pushed it and the hapless Phil Woolass has been forced to cave in. Esther will just bring more of the same to Luton, Lab majority 5500. Iwouldn't think that would be enough of a bulwark to stop an Esther victory.
And even if it was, why risk all the negative publicity, the repeating of excessive expense claims, charges of corruption etc, when a new shining light, fourth way candidate, can be found within weeks, so ending the story.

So we expect Margaret Moran, and some over toxic tainted MPs to be packing up from at least one of their houses soon. Ah well...That's Life.


reselectd full support etc.

Bank of England: no sign of paddle in creek yet

Bank of England: no sign of paddle in creek yet

One issue that has struck me throughout the financial crisis (i.e. since August 2007) is the relative ineptness of policy and control of the economy.

The Bank of England and FSA did not see the disaster coming, when it did happen they did not know what to do. then they sort of said sorry, then they did something, now they are doing more.

Yet 'doing something' has turned out to be a path aiming to take us back to 2007, i.e. the peak of the asset bubble. To achieve this they are trying to buy assets through Quantitative Easing and hloding interest rates low to stimulate lending.

All of this has huge potential to stir up another asset bubble the next few years. At least this time I will know what is about to happen and can plan accordingly.

However, the BOE's statement of last week was quite breathtaking. In it, they said they saw updside and downside risks to their current strategy. In effect, they don't know what will happen, but they are trying anyway, following Friedman's ideas of Monetary policy.

This is a truly bad state of affairs as it seems to me that the Government is trying Keynes, the BOE Freidman. One of them will be wrong and that will cause another economic catastrophe.

If the BOE is right, then we avoid a 1930's depression and merely get 'Lost' decade. If the Government are right, we get a depression and huge deficits. Yeesh.

Roll on 2020. Glad I am still on the beach!

Bank of England makes £1bn profit

Banks are doing badly?
Well..most banks maybe. For now.

The Bank of England yesterday revealed it has made its biggest profits since its foundation in the late 17th century. £995 million pounds made from lending its money. The bank charges a fee on the money it lends. As the bank is lending far far more than it would under normal circumstances, it has made greater profits.
And the banks themselves are generating greater profits. Or rather greater margins than they could make before the crunch on mortgages and loans. But greater margins will lead to great profits if continued growth and demand can be sustained. Reduced competition as competitors collapsed or retreated to their own countries have left the survivors potentially in a stronger position. Lloyds shares up already since Victor Blank {cheque..OK, MW} decided to slip away yesterday.

The Mail thinks that the Tories may have to split Halifax from Lloyds banking group if they are in power. The worry is the banking groups will grow very quickly and become very powerful once again. Future governments are looking for institutions that are NOT too big to fail.
Would a government do that? With Tesco about to enter the market? And the oft promised, never to materialise Postbank still being vaguely mooted by the government.
I think it would depend a lot on the banking group's situation in 2010.

An Honourable Leftie - Revisited

Exactly two years ago to this very day (when Mr CU was once again on his holidays and yours truly was just a humble guest-posting stand-in) I had cause to celebrate the honourable actions of this old buffer.

He is veteran leftie David Winnick, and he's been at the integrity bottle again ! On the side of the angels over MPs expenses, and the need for Speaker Martin to pack his bags - David Winnick ! Once again I salute you.

ND

Know a Candidate for Scrappage ?

Peter Mandelson says:

Know a worthless old banger that badly needs to be taken out of commission ? See if the old crock qualifies for my scrappage scheme !


If so, £2,000 in used notes will help it to a well-deserved early retirement !

HH of Peckham says: this is a Godsend - we can't take another week like this !
MM of Glasgow says: it'll take a wee bit muir than 2k tae see the back o' me, Jimma !

NewLabour. Support for hard-grafting families.