Mandelson Spins His Own Memoirs

New Labour Spin Twins: currently out-lying each other

Hardly surprising, I know, but since they have not been entirely well-received by his own party it was necessary for Mandelson to spin his memoirs for all he was worth upon their publication today in the face of what I predict will be pretty poor sales - and some reasonably tough questioning from Evan Davies this morning.

Even so, to hear Mandelson actually trying to spin his own, printed words from his own, conceited book - to hear him attempt the epistemologically impossible and wriggle and squirm as he did so - was a source of some pleasure for me as I battled my way into work through sheets and sheets of West Wales rain.

Doesn't he realise we stopped believing anything he says long ago? Davies made the point quite well: something like, don't you think the public will find it quite annoying that only three months ago you were telling them to vote for what you now call a 'dysfunctional' prime minister and party. Mandelson had no convincing answer to that, at least, not convincing enough for any potential readership, I would say.

But is this a case of one spin operation too far for the Prince of Spain (sic)? I suppose it's inevitable, actually, that spinners end up spectacularly but stubbornly contradicting themselves. After all, 'spin' is merely a euphemism for 'lie'. And Mandelson, after Alistair Campbell, is the biggest spinner of them all.

The only important thing about this book of Mandy's is that it represents the first shot in Labour's latest civil war, a war which, with enough luck, should keep them away from office - and us - for a generation.

So well done he. Sort of.

Brown Implodes Mandelson's Campaign

Been reading a few hand-wringing blogposts around and about reinforcing the idea that after that truly appalling rant at the weird, "Citizen UK" rally, Brown had somehow found his voice at the eleventh hour. Of course, it's in the nature of the media that these things become self-reinforcing narratives leading, usually at breakneck speed, to some sort of settled view or consensus, however totally detached from the truth - or reality - it might be. In fact, you could argue that the general election battle is a battle not just for a vote, but to influence that mercurial, flowing media narrative and try to alter, if you like, the course of the discourse - so to speak.

So in one sense - this sense - one could say that Brown sort of succeeded. He has shifted the narrative slightly - maybe - with the BBC on this morning's Today programme being willing accomplices, typically, or even the initiators of this latest little change of tack. But we know that the whole narrative, whichever way it is leaning, is generally nonsense anyway; that the reality is rather different, regardless of whether it influences people's minds or not.

The reality is that Brown, with his back against the wall and his campaign leaders pulling in three different directions, telling their own voters to vote for other parties (David Blackburn was pretty amusing on this in the morning), has decided unsurprisingly to get all atavistic on our butts; to go back to the old irrational, deceitful, Tory-hating, prehistoric Balls-Brown fake dividing line that Mandelson and Darling worked so hard to move away from and onto less toxic, less risky ground. They tried to decontaminate brand Brown. It seems they failed.

But they at least could see the bigger picture that concerns the whole future of Labour. I figure they calculated that if they allowed Brown to lie about phantom Tory cuts/ equally phantom Labour spending, won the election and then proceeded to cut everything in sight having been ordered to by the IMF, they would lose the next election (which would probably come soon afterwards anyway) by a country mile, be truly obliterated this time by a livid electorate, and secure 25 years of Tory government into the bargain without David Cameron even having to break sweat.

So, the upshot is that, despite the direction in which the media narrative is currently veering, apparently and irrelevantly, the fact is that Brown has got it disastrously wrong. He's not only reverted to type (who could have doubted that he wouldn't - that's all he is, after all), but he's actually going to lose the election on the back of it too, so we can skip the brief period of the total turmoil of a Labour government winning on a lie and collapsing within months as the economy tears itself apart and move straight onto the Tories.

All in all, the couple of more rational members of the former Labour cabinet must be tearing their collective hair out (that doesn't include Liam Byrne, naturally) gnashing their teeth and generally wailing a lot. Thanks to Gordon Brown, the whole, elegantly triangulated (and exquisitely dishonest rather than brutally deceitful) Mandelsonian election campaign strategy has now totally imploded and will suck the party down with it.

As I've said before, they only have themselves to blame. They could have removed Brown a long time ago. Hell, they never should have taken the piss out of the electorate by giving the auld wrecker a coronation in the first place. But that's all history now, and so is Labour. The one silver lining is that if there is any justice left in this world, or, indeed, sense left in this country, then even if Labour aren't kicked into third place and kicked into touch for a generation - even if they manage by some miracle to keep Cameron down to a minority government - Brown will be gone.

Even I, ever the optimist who still firmly believes in the clear Tory triumph - if by some horrible, perverted twist of fate I'm wrong, even I would happily settle just for the end of Brown if I can't have anything else. That outcome would be by no means satisfying, or even satisfactory, but it'd be one hell of a relief.

"A Future Vague For All"

I nearly missed this funny Marten Morland cartoon summary of Labour's and Brown's whole campaign strategy from the Sunday Times. Never a truer word, as they say.

At least the Tories are committed to some genuine policies, which will be life-changing (if not life-saving) to thousands of people as they right Labour's wrongs.

Brown plans to "create a million skilled jobs" if the country's stupid enough to give him a mandate, or so he told us this morning. I think that comes under the "raise fuzziness" category. Or is it "build haziness"? It's so difficult to tell with Brown what he or his party really mean.

And there you have the problem in a nutshell. Because they'll say anything to try to woo voters, they end up saying nothing. And we're all left wishing they'd just keep their noiseholes shut, especially the prime movers - you know, dissembling thugs like Whelan and Balls, strangers to the truth both and entirely.

"A future vague for all". Indeed!

Lumley Savages Another Labour Pit Bull

Joanna Lumley, so the Telegraph, among other sources, is reporting, has forced the maniac Labourist smear-monkey who durst sully her angelic countenance with his slimeball innuendoes, Kevan Jones, to "apologise unreservedly" for his crimes. Reading her withering statement, it never ceases to amaze me that these Labourist twits keep on trying to have a go at her, just because she was right all along about the Gurkhas, and proved them embarrassingly wrong. But they never learn:

Speaking after his apology, Ms Lumley rounded on Mr Jones and accused him of smearing her.

"We have come here with a sense of regret that we have had to come to this, which is really to clear our names in public," she said at a news conference in London.

She said that over the past month or so, articles have appeared "which must have put doubts in the hearts of" supporters of the Gurkhas campaign.

She went on: "Today we want to call on the Prime Minister to confirm that the policy is one that he completely supports, that the Ministry of Defence is behind everything they said they would be behind.

"I want to say to the people of this country, what you did was to back a just cause and we have not stopped working solidly for the Gurkhas in the quiet, as we promised the Prime Minister we would. "It has been suggested that I somehow was parachuted in, took the headlines and ran. I feel that is a smear.
"It has been suggested that I somehow spread falsehoods amongst the Gurkha communities both here and in Nepal about what they could expect. That is a lie and therefore a smear. The people who made those accusations must know them to be untrue."

Peter Carroll, of the Gurkha Justice Campaign, said that since their victory in winning settlement rights last year, there had been "a steady drip of negativity - almost like a dripping toxin - being put into this story by what we presume to be vested interests at the MoD".

I don't know about that, but I do reckon that these Labour clowns must be winding up Lumley for some reason. Perhaps they just can't get enough of the lash of her sophisticated, elegant, finishing school tongue.

Whatever, the fact remains that this particular one has made a total fool of himself in trying to play politics with someone who is, quite simply, above it all - and she's far too intelligent not to be able to wipe the floor with a low-grade Labourist bullyboy nonentity like him with one, sharp smack of her class.

It's Politics One-Oh-One, Labour hoons: never mess with a Lumley. Especially when she's backed by some super-tough, mean little soldier dudes - and 90% of the country.

'Nn-duh!

==Lumley Latest==

David Blackburn on his Spectator blog has just made these first class comments about Gurkhagate:

Then, with her airy cut-glass voice, Lumley added: “Gordon Brown is man of integrity who has kept his word.” It was a subtle but clear challenge to Brown's moral integrity.

Brown came off a bloodied second against the Gurkhas. The memory of that defeat should
press him into acquiescence because Brown cannot afford to dither now. It's as much a question of instinct as it is one of integrity.

Spot on. And Brown. Oh dear, him again. I'd missed that (uncharacteristically, you might say, given the pretty narrow scope of this blog). He's like a sort of Rome, only after it was sacked in 410AD by Aleric the Headcase, or something. Rome was ruined and abandoned and smelt faintly of dung, but all roads still led there. Brown is like that insofar as if roads were immense (and immensely stupid) political cock-ups, you could trace them all back to him.

"Gordon Brown Is A Dangerous Weirdo"

...Being the conclusion of Minette Marrin's superb analysis in her eponymous Sunday Times column. To me, one of the best quotes, among many others, is this:

The kind of bullying of which Brown is suspected is entirely different. It is the uncontrolled raging of a desperate man, driven in his frustration and misery to lash out randomly at anyone nearby.

If that doesn't perfectly illustrate Gordon Brown's deeply flawed, even dangerous, character, then I'm a socialist.

So please have a glance at the article, when you have a moment. It's wonderfully incisive, and serves further to nourish truth rather than smokescreen spin, and burn away Labour's increasingly delusional, insulting, deviant mythologising about the worst prime minister ever inflicted on our country.

Just for good measure (though, I trust, not to oversell the appeal), here's another little gem of Marrin's insider wisdom:

...the prime minister is without a doubt the strangest, most emotionally dysfunctional person I have met. We were together at a dinner once and I felt that his inability to behave remotely normally was almost pitiful.

Five more years, remember. If you don't vote intelligently, then you get five more years of this damaged oddball. As Hamlet and a fair few Yorkshiremen would say: think on't.

Frailty, thy name is Brown!

Caption Competition: The Piers and Gord Edition

They seem to think the sensitive-side relaunch went really well. It didn't.

So speculation about what these two idiots actually said to each other here is most welcome.

Hat tip - and link to a superb, far more incisive, blog post on this matter: John Ward.

Astonishing

James Delingpole, citing Bishop Hill, is as gobsmacked as the latter by a professional analysis of the Fourth IPCC Assessment Report (you know, the one with all the "Gates" in it) by a scientist named Andrew Lacis, a colleague of arch warmist James Hansen at GISS, and someone who in no way whatsoever could be branded a "sceptic." Here's an astonishing bit:

There is no scientific merit to be found in the Executive Summary. The presentation sounds like something put together by Greenpeace activists and their legal department. The points being made are made arbitrarily with legal sounding caveats without having established any foundation or basis in fact. The Executive Summary seems to be a political statement that is only designed to annoy greenhouse skeptics. Wasn’t the IPCC Assessment Report intended to be a scientific document that would merit solid backing from the climate science community – instead of forcing many climate scientists into having to agree with greenhouse skeptic criticisms that this is indeed a report with a clear and obvious political agenda. Attribution can not happen until understanding has been clearly demonstrated. Once the facts of climate change have been established and understood, attribution will become self-evident to all. The Executive Summary as it stands is beyond redemption and should simply be deleted.

The entire thing, naturally, was buried by the IPCC thus:

Rejected. [Executive Summary] summarizes Ch 9, which is based on the peer reviewed literature.

It is quite difficult to frame in one's mind the kind of mentalities and egos at work here. Suffice to say, their levels of by now well-documented obscene corruption, which has already led to the starvation of millions (thanks mainly to the cultivation of subsidised biofuel crops on good agricultural land instead of food), means that we can safely conclude that they will stoop to anything to keep their hideous misanthropic ideology alive - and their own pathetic 'careers' - for as long as they possibly can. This is going to be one hell of a battle - but it is one that common sense, reason and good science cannot afford to lose.

Remember, also, that this Labour government has been, and remains, one of the major villains of this piece. We can start to correct the world's current rational imbalance by ejecting it when we are finally given the opportunity. But once the Tories are in power, if they don't immediately reassess their ridiculous commitment to this unhinged - and now unravelling - politically-motivated (it's mainly inspired by anti-capitalist people-haters) dogma, then they should be next. Better they correct their policies now, then, in a timely and honest fashion.

But first things first. First, we must deal with Labour. I'm utterly confident that the British people will do just that, and good on them for it.

How Do You Suspend A Suspended MP?

David Blackburn has just put an excellent question in his Speccy blog, concerning the case of Elliot Morley, one of three Labourist MPs (so far) now charged with stealing from the British taxpayer.

Sky’s Jon Craig’s asks one of those questions you wished you had posed: wasn’t Elliot Morley suspended already? Yes, he was, on the 14 May 2009 and with immediate effect.

As Blackburn reminds us, Morley was suspended from his party on 14th May 2009 "with immediate effect". It looks like he was reinstated on the sly, however - hence the necessity to "re-suspend" him. Never mind the sneakiness of this - and contempt for public opinion that it shows - asks Blackburn: in the Labour party, what on earth do you have to do to get expelled!

There are three main points to make about this total, Brown-inspired fiasco, and Blackburn implies the first two. First, this Brown U-turn represents an unequivocal triumph for David Cameron, who has been steadfast in his leadership all through the expenses scandal and has gauged the mood of the British public quite deftly. He's acted decisively throughout, and bravely run the risk of severe unpopularity among his own MPs as a consequence by forcing the worst Tory offenders to give up their seats, despite their not having broken any law per se. I still think he could have gone further and forced Brown into a general election last year. A still-bolder leader would and could have, but I guess that's all water under Westminster bridge now.

Second, it further demonstrates just how useless, witless, rudderless and basically clueless Brown is when it comes to offering any kind of leadership on this serious issue (or any other, for that matter - but that's just me, I suppose). That he's been forced to climb down so humiliatingly and bow to Cameron's pressure is very telling, coming so soon as it has after last week's drubbing at the hands of Cameron at PMQs.

Third, there are these explosive Independent revelations by Andrew Grice three days ago, emerging from his coverage of a new book by another Labourist insider. The article's title, in the context of today's Morley mayhem, "Brown 'didn't care about expenses - only himself"" more or less says it all: all, that is, in the sense of what we need to know about why the Labour Party has been in such a God-awful, tail-chasing, directionless, perfidious mess from the start of the whole, sorry affair. The blame lies squarely at Gordon Dithering & Self-Obsessed Brown's door. If you haven't read it already, then I would suggest that you do. A taste:

Mr Price paints a picture of despair within the Brown inner circle at his failure to recognise the seriousness of the expenses scandal. He accuses Mr Brown of creating a climate of distrust within Downing Street and being cut off from the concerns of voters.

I simply cannot believe that Brown or Labour can possibly recover from this. It is the one issue that cannot be brushed under the carpet, or masked with the pathetically desperate fig leaf of a twelfth hour (and utterly wrong-headed, dishonestly motivated) referendum on the Alternative Vote system.

As Cameron said in what looks like an increasingly prescient PMQs last week, "It's back to the bunker with that one..."

It also means, however, that Brown will now drag out this Parliament to the bitterest of bitter ends. Fair enough. It'll just make victory in finally turfing out the worst prime minister this country has ever had inflicted upon all the more sweet for the waiting.

The collective sigh of relief exhaled by people up and down Britain the day after we are rid of him will be audible in France.

Europe: Our "Domestic" Market

Our 'domestic' market

Fanatical europhile Pete "Teflon" Mandelson has admitted Europe is our 'domestic' market. During what can only be regarded as an extraordinarily rude and thinly-veiled attack on the USA's plans for regulating its own banking system, he revealed this peculiar - some might say unique - weltanschauung, presumably, by extension, believing that the United Kingdom is now no more than some kind of local trading area, rather than a sovereign nation.

Of course, we all know what he's up to: softening-us up for entry into the eurozone without a referendum while simulatenously trying to reboot the "only Gordon can save you" routine. Pull the other one, it's got Russian billionaire-paymaster yachts on it. "Dishonest" is simply far too weak a word to describe the depths of this hideous individual's machinations. Here's an example:

Asked specifically about critics of the single currency who argue that by retaining sterling, Britain had been sheltered from the worst of the market backlash against high public deficits, Lord Mandelson said: "That's true.

"But it doesn't necessarily mean that being out of the eurozone will always play to Britain's advantage

"The truth is that Britain depends on a vibrant, growing European economy, this is our domestic market. The one on our doorstep, we don't want it to fail. It will have a better chance of succeeding the more Britain is able to influence its policies.

Europe's become our "domestic market" eh? (tell that to the French and Germans!). And a virtual admission that we're heading for the eurozone, eh? Over my dead body.

Anyway, you can read the rest of the article here.

If anybody else is tempted to vote for these traitors, liars and thieves again, I will be amazed. That 30% of people still, apparently, are planning to, is amazing.

Blix On Blair

Hans Blix, the weapons inspector chief humiliated by Blair and Bush in the run up to the 2003 invasion of Iraq, gives his view (largely implicitly) on Blair's pretty chilling Chilcot grilling, during which he heavily hinted that not-only would he do it again in Iraq, with or without the WMD lies, but that he would have followed it up with an attack on Iran. While I don't agree with some of Blix's views, particularly on what I regard as Israel's entirely understandable - and genuine - security fears, he talks a heck of a lot of sense about the folly of taking on Iran without international agreement and a bloody good reason (an example of which certainly does not exist, at least yet). He also gives the lie to Blair's 2010 counterfactual pseudo-justification for the Iraq war, namely, that had there been no war then Saddam would now be locked in an arms race with Iran and Israel. Iraq would be as crippled now under Saddam as it was in 2003, Blix suggests. In other words, Blair was talking through an alternative orifice to his cakehole.

As for his point about a nuclear-armed Iran. Tell you what, I think he's right. Iran with nukes would certainly be extremely uncomfortable, but the fact remains that with the responsibility that comes with possession of the Bomb comes a sea-change in national outlook and identity. Using it as an aggressive weapon is literally suicide, given the guaranteed swiftness and totally devastating response to such a crime. Blix implies that not even the current regime in Iran is that crazy, for all its wild words and posturing. And I agree, mainly because he's probably right, but partly because just hearing a mollifying voice of reason after the endless propaganda and ignorant, one-eyed, 'blood price,' warmongering lunacy of liars like Blair is a hell of a relief.



You may disagree.

Guy News Classic

This from Guido Fawkes earlier on bears repeating. Over and over and over again.

Some Labour-loving, myopic hoon calling himself "Fraser1701" commented on Guido's YouTube channel underneath this upload "I prefer optimism". Well, Fraser, old boy, unless you really are a myopic Labourist hoon, then I imagine you must mean "as opposed to wildly dishonest, outrageously massaged and risibly inaccurate economic predictions that consistently bear no resemblance to reality whatsoever". In which case, I have done you a disservice because you're going to express your preference for optimism by voting out the worst government in this nation's history. And, as we know, the only way to do that is to vote Tory, like it or not.

I suspect, though, that "Fraser1701" did not mean this and that he's really just another pathetic Labour stooge paid to trawl through the sensible and effective anti-government blogs, like Guido's, leaving little rat dropping comments like that one to further some desperate plan to reverse his party's massive - and unstoppable - decline in credibility and popularity.

Earth to Fraser: with Brown in charge, mate, it'll never happen! So keep him right where he is.

Brown's Gilt Trip

Mark Bathgate warns that Brown faces a major headache next month. The cost of Britain's debt is creeping up, especially after PIMCO decided to dump UK gilts, making it more and more expensive to fund, as Bathgate calls it neatly, Brown's "fiscal debauchery". As Bathgate says:

With inflation continuing to "surprise" on the upside, how long can the Bank of England keep justifying printing money? Now we learn that the Bank of England had printed £193.5 billion to finance government spending by the end of last week. So we are only four weeks to the next MPC meeting – but there is only £6.5 billion of new money left for them to pump out before they hit their £200 billion limit. Then we enter the scary territory I outlined in an earlier post. And Brown is still left needing around £15 billion of Gilt sales a month to finance his fiscal debauchery.

The Gilt market was fine while Brown's appointee's to the MPC were willing to keep the printing presses rolling to the tune of £1 billion a day through the summer. But...as inflation has started to rise quickly, the pace of money-printing and Gilt purchases has had to slow.

This has become a race for Brown, between the general election and a visit from the IMF. How long can he keep hosing borrowed money away, with no cogent plan to bring spending under control, or, in fact, no apparent acceptance even of the need to do so? The truth is, he can't face up to reality, but reality is about to bite. However, his head is currently buried deep in the snow. In what appears to be yet another classic Brownian displacement activity, he's taken personal control of the nation's dwindling grit supplies. Well, Gordon, this country and your diabolical premiership are on life support. And it's about to be switched off.

Seems to me this is an argument for a March election, but I reckon Brown is running another kind of race in his fevered imagination. He thinks that if he hangs on long enough, then the recovery will have begun and he will be able to take credit for it.
It won't matter to him that we were first in and last out (by a mile).

What he doesn't seem to realise is that the rest of the world, especially the parts having to fund his economic lunacy and political dishonesty, couldn't care two hoots about his political destiny, or the financial stability of Britain, for that matter. Why should they? But they could well be about to pull the plug, and yet the Bank of England has no choice. With inflation rising, adding to the strain on an economy mired in debt and still, officially, in recession, it will not, as Mark Bathgate suggests, be willing to go beyond the £200Bn funny money level. Next month will therefore be crunch time for Brown. He's gambling with the British economy and people's livelihoods just to save his own political skin.

But even if he thinks he's got away with it, with the start of a limited recovery (after the longest, deepest recession in the world, remember), he will not be forgiven for his behaviour and for the disastrous state he has left Britain in. That's the misjudgment he, and many of his jellyfish Labourist co-conspirators, have consistently failed to comprehend.

Give us the election so that we can explain it to them.

Meanwhile, as Bathgate says:

The market has already started to push up the cost of borrowing for the UK. It's risen by 0.6 percent over recent weeks. Despite having official rates over half a percent lower, UK borrowing costs are now 0.7 percent higher than those of Germany. I suspect the Gilt market will be very vulnerable in coming weeks.

Hang on to your hats, folks, we're all on Brown's gilt trip and it's gonna be one hell of a bumpy ride.

E. Balls, A. Balls, PIMCO and Gilts

I was just skimming through the comments beneath Jeff Randall's latest all-out assault on Labour's epic economic incompetence when I stumbled upon something rather interesting of which, in my ignorance, I knew not (thanks to the poster "BD MATHERS," I do now). The European portfolio manager (chief buyer) of the biggest bonds and gilts dealer in the world, PIMCO, is none other than one Andrew Balls, Ed Ball's much smarter little brother.

"So what?" you may well ask. Well, for one thing, PIMCO holds $183Bn of assets and, as such, is the biggest company of its kind in the world. What is more, it's playing a vital role in keeping the British economy's head just about above water, for now - (or, at least, keeping the Labour shipwreck afloat). However, PIMCO announced yesterday that it will be withdrawing from both the US and the UK markets. The US will just about be able to cope with this since it has many other options open to it. Not so the UK, a far smaller economy where debt dependency means we are orders of magnitude more leveraged than the States. As the "economic voice" blog says:

In what amounts to a massive vote of no confidence PIMCO has announced that it will cut back on its UK and US government debt holdings. They see government borrowing rising and the central banks no longer buying through quantitative easing, which will push the supply / demand balance into negative territory for them. They are expected to move into European government bonds as these have not had the same level of government support. If a flood of UK Gilts are dumped on the market we could see yields rise (prices drop) more than anticipated.

This leaves the questions of where will the government raise the circa £180 billion it needs for the next year? And how much more of a premium in the form of increased bond coupons (interest) are we going to have to offer before investors are happy to take the risk of buying new Gilts? Also, when will the Bank of England be able to sell its accumulation of Gilts back into the markets without suffering a massive loss?

Next stop the IMF?

Indeed. This is a very, very serious development which has all-but been drowned out by all the noise coming from Brown's latest pathetic leadership crisis over the last 24 hours or so, although some bloggers, most economists and some broadcasters did pick it up. It is a stark truth, but Jeff Randall is absolutely right: Britain is broke; the coffers are [worse than] empty. He was wrong, however, in his assessment that both main parties are too scared to talk about managing this calamity. As I said earlier, Philip Hammond was refreshingly candid, forensic and solid in appraisal of the Labour-led crisis in the PBR debate today. It's only Labour that's delusional about the scale of the problem, in particular the Prime Mentalist himself - oh, and one Edward Balls.

Which brings me back to the theme of this post: the embarrassment the Balls brothers connection might (should) cause the government. Why? Guess who will be steering through PIMCO's dumping of UK gilts. One Andrew Balls, European portfolio manager. The "economic voice" again:

Apart from the economic repercussions for Britain, it also embarrassingly appears that Andrew Balls (younger brother of Ed Balls, Secretary of State for Children, Schools and Families) will be overseeing this withdrawal as head of PIMCO’s European investment team.

But in a huge, gobbledigook in-house interview posted after Christmas on the PIMCO Europe website, Balls Minor puts a bit of English on what the company calls its "European Cyclical Outlook and Strategy" (aka, its "Get the hell out of the UK as fast as possible" plan).

...there is more uncertainty around the forecasts than usual, and it is even more difficult to identify the turning point in the economic cycle because larger, secular changes are also underway. Over the long term, we expect to see a major shift to lower growth in the developed economies, higher growth in the emerging economies and greater government intervention and regulation overall. PIMCO calls this new economic reality the New Normal.

Compared with the core eurozone countries Germany and France, we see the UK as having a more difficult adjustment to make to the New Normal due to weaker initial conditions, greater ongoing need for deleveraging and, in the household sector, the need to rebuild savings, which are low compared with the savings rates you see in Germany or France.

However, the UK has benefited from more aggressive policy interventions and related to this, the depreciation of the British pound versus the euro and the dollar. We also consider the UK a more flexible economy than Germany or France. That is a benefit for the UK in terms of handling the big shocks we have seen hit these economies.

Taking all these factors into account, the growth forecast ranges are similar for the UK and the eurozone as a whole, and their outlooks are broadly similar, but the midpoint for the UK is a little bit higher than that for the eurozone.

Another important point is that while we see unexciting growth at the eurozone aggregate level, we expect to see considerable differentiation across member countries because of weaker initial conditions and greater deleveraging requirements in some countries.

Get that last bit? "Weaker initial conditions and greater deleveraging requirements in some countries [in Europe]." For 'some countries,' read the UK. For 'weaker initial conditions,' read Gordon Brown's total cluelessness in his decade of lunatic spending into a massive property bubble that he helped to create and fuel. Seems spinning the facts could therefore be in the Balls family genes. To be fair to A. Balls, though, he is stuck between a very thick rock (filial loyalty to an older brother - and sister-in-law - who helped cause the UK's current economic chaos) and a very hard place (doing his job). It seems he plumps for the latter in the end, though, in his assessment, stating (in econo-nerd speak, naturally) that:

In the UK there is also uncertainty over what the Bank of England (BoE) will choose to do with the stock of gilts it has bought during 2010. The BoE has bought gilts across the curve, whereas the Federal Reserve’s quantitative easing purchases have largely been focused on mortgage-backed securities. So there is a bigger question mark over the exit strategy here for the BoE, whether it will continue to hold these bonds or whether it will at some point try to reduce those holdings.

Because the eurozone does not have large-scale quantitative easing programmes to unwind, we remain moderately bullish on eurozone duration. We also remain positive on covered bonds in the eurozone. The impact of ECB purchases of covered bonds is very minor compared with the quantitative easing programmes in the UK and the US...

This is why his bosses have told him to dump the UK (and US) and buy European debt instead. He goes on (boy, he goes on!)...

On the UK side, in addition to the risk associated with the end of quantitative easing, there is also political uncertainty surrounding the elections, most likely happening in May, and the implications there for fiscal retrenchment and for fixed income markets. The chance of renewed pressure on the British pound remains a source of tail risk, a risk that poses a market crisis or systemic event that can severely hurt portfolio returns, in the UK.

In other words, the UK is the most likely candidate for basket case status in the entire continent of Europe. I wonder if Ed knows what his brother's been up to? Andy knows what Ed's been up to, that's for certain. You know what, I think Britain ended up with the wrong Balls in the government.

Anyway, that's enough of that. It's all just too unspeakably depressing for words. My God this country has been fubar-ed by Labour. Again.

UK Debt: Junk Bonds?

Today, the international (and all-powerful) New York credit rating company, Moody's, warned that thanks to Gordon Brown's disastrous financial policies over the past decade, which has left our public finances in a catastrophic condition and still worsening, UK government debt could be tested in the very near future and downgraded from AAA to A1. This would make government bond sales - its out-of-control borrowing, in other words - much more expensive and, as a consequence, would put Britain firmly on the road to debt default. In terms of the long term future of the British economy, however, this prospect is a serious but minor detail when compared to the scale and the cynicism of Brown's scorched earth policy in his attempt to dupe the population into thinking there is some form of economic recovery in his attempt finally to get elected. He's willing to risk the downgrade - and will go on spending us into oblivion - just to secure a mandate.

If the UK does emerge from recession this quarter - and, after today's terrible manufacturing figures, there must remain some doubt about even that modest hope - it will be a fake recovery fuelled by astonishing and, as the Moody's announcement today says in no uncertain terms, a totally unsustainable level of borrowing. My view? Well, it's difficult to express how troubled I am by polls which suggest that Brown's utter, utter dishonesty, delinquent economics and vicious political tribalism might somehow be starting to turn people's heads. But I suspect that that is more to do with the re-emergence of Alastair "David Kelly" Campbell and his narrative of triangulation, expediency, smears, spin and lies, which were all-too evident at last week's PMQs with the use by moron Brown of that ridiculous 'Eton' jibe.

Even if Campbell thinks he can lie Labour all the way to a fourth term, (and that's all he's ever achieved, beyond poisoning and corroding British politics during his terrible career - namely, to lie Labour's way into power three times) one thing even a complete stranger to reality like him can't do is spin his way out of a debt default, a currency collapse and a total meltdown in the public finances. He might have been able to lie his way into a major war, and out of responsibility for Kelly's suspicious suicide, but even Campbell can't mask a cataclysm of the scale of Brown's economic bust. Can he?

Finally, as is my wont, I'll quote David Blackburn's post earlier this evening on the subject of Brownomics and the credit downgrade in full. Because it's rather good.

Moody’s AAA sovereign monitor was published today, and whilst the UK’s AAA status remains ‘resilient’ the situation is far from rosy. The report states:

‘The UK economy entered the crisis in a vulnerable position, owing to the (overly) large size of its banking sector and the high level of household indebtedness. Both continue to weigh on economic performance. Net bank lending to the UK business sector has continued to contract through Q3 2009, and repairs to household balance sheets (i.e. the rising savings ratio) may weigh on demand for some time to come.

The depth of the crisis has been mirrored by the ongoing deterioration of public finances (with gross debt/GDP having risen from 44% at the end of 2007 to an estimated 69% at the end of 2009). It also raises considerable challenges going forward, as the downward adjustment of potential output during the crisis will result in a recurrent shortfall in tax revenues, which, if not compensated by a parallel adjustment in expenditure, would leave the government with a permanent deficit.’

First into recession because of Brown’s profligacy, Britain’s recovery is stunted by continued spending and the government’s inability to address the credit freeze. Moody’s assert that Britain’s AAA status will be endangered unless fiscal retrenchment is implemented soon, something that global bond markets are relying upon too. Moody’s assert:

‘While assumed capacity for fiscal adjustment currently supports the maintenance of the Aaa rating of the UK government, this assumption will have to be validated by actions in the not-too-distant future to continue to provide support for the rating.’

Britain cannot sustain this level of debt. We near an Ireland-style downgrading followed by an era of ruinously expensive borrowing. Labour’s political and economic strategy dictates that fiscal adjustments will not be undertaken until 2011. Tomorrow’s Pre Budget Report will contain time saving measures, in the form of further cheap, low yield gilts and perhaps more Quantitative Easing, to allow the government to execute its strategy, borrow cheaply and prepare for future retrenchment. Will the markets wait that long?

The need for a new Conservative government has never been more desperate - at least, not since 1979 and the last Labour economic implosion. Let us pray that Cameron knows how to make that case. But because he's now up against forces so cynical and so calculating, that job just became a lot tougher. Perhaps a credit downgrade, in the long run anyway, could end up being just the reality-checking medicine an electorate, still hoping against hope that Brown's crisis (if not Brown) will just magically go away, now requires.

Perhaps, in the long run, it's be the best thing that could happen to the UK, if nothing else than to snuff out Brown as a political possibility and save us from the total horror story five more years of his economic nihilism would guarantee. The stakes are that high.

Ben Bernanke Bashes Brown

One of these two knows what he's doing

Having flailed around in my last blogpost banging on about some sort of 'new phenomenon' where there wasn't one, really, (I'll leave it for others to decide, but I reckon it was not my best effort to be brutally honest), it comes as something of a relief to see the Spectator doing what it does best and putting the boot in to old "saved the world" Brown himself. And all they had to do was flag up Bernanke's testimony to a Senate hearing about Brown's ultra-useless tri-partite banking regulation system. Here's what the report says:

Gordon Brown’s much heralded tripartite regulatory system failed the first time it was faced with a financial crisis, proof that taking away regulatory powers from the Bank of England was a massive mistake. Now, Ben Bernanke — who is trying to secure a second term as Fed Chairman and keep the Fed’s regulatory powers intact — is citing the Brown model as what not to do, telling the Senate banking committee:

"[O]ver the past few years the government of Britain removed from the Bank of England most of its supervisory authorities. When the crisis hit - for example when the Northern Rock bank came under stress - the Bank of England was completely in the dark and unable to deal effectively with what turned out to be a destructive run and a major problem for the British economy.”

As Paul Waugh points out, George Osborne and his team are rather pleased with this effective endorsement of their position by the Fed Chairman. Bernanke’s quote does rather show that Brown isn’t leading the world in quite the way that he likes to claim.

Very gently put by James Forsyth. In reality, what Bernanke is saying here is that Brown himself - personally - through his moronic regulatory mishmash, directly caused - not contributed to, mind, caused - the 'destructive run and the major problem for the British economy' we are all having to suffer through now. Namely, the worst peacetime recession in modern British history. That's how cognitively dissonant the Brown-Labour narrative is on the banking crisis and recession for which, I and many others maintain, Brown is directly responsible.

I'd say Osborne is absolutely, champagne cork-popping cockahoop tonight, and about a dozen Nokias have been obliterated on the bunker walls. It seems Bernanke and Obama alike are distancing themselves from the tainted loser that is Brown, just like that little French gnome Sarkosy did yesterday.

For them, at least, the penny really has dropped. They've abandoned Brown long before we'll get the chance to do precisely the same thing, in 2010.

Star Trek Economics

I heard some quietly chilling news on the radio while driving into work this morning and have just got in to find that Guido has already written an excellent post on the subject of deflation or, to be more precise, inflation. Yup, as predicted on the more sensible financial blogs for months now, the latter's on the rise again. Be warned, however, this is just the beginning.

As Scottie would say on the Starship Enterprise to a captain screaming for Warp 12, "I canna' break the laws of physics, Cap'ain!" In this case, the chief engineer of the Starship Britain is Mervyn King (Alistair Darling is just the helmsman); its utterly reckless captain, who managed to navigate the ship straight into an economic black hole, is Brown (naturally); and the laws of physics are, unsurprisingly, the laws of economics which, by the same token, "canna' be broken."

You print money, you devalue it. You print bucketloads of it and, well, you are courting calamity. You go into massive debt, with a huge structural deficit bolted on, and you compound that potential devaluation and turn a calamity into a catastrophe. Simple as. They will tell you that it's the oil prices, that the money is still sound. They aren't just being dishonest, I'm beginning to wonder if they (these economics 'experts') actually know what the hell they are talking about. The temptation is to trust them - they're the boffins, after all - but the economic forces at work here are so powerful that, you know what, they might not have a clue. Either way, it will be very hard for the next (I hope sensible) captain to pull us out of the gravity vortex Brown has steered us into without stripping the vessel of all its masses of dead weight first, and then by reigniting the engines with the fresh plasma that is tax cuts and other incentives for wealth creation.

Fortunately, David Cameron wrote an excellent piece for the Times this morning which outlined those very things. If only he'd reconsider the 50% tax, too. It wouldn't signal a warp speed recovery, but it might send a vital message to wealth creators and investors that they won't be punished just for being successful and simply for doing what they do best: making money and then spending it.

Here's Guido's thoughts just in case you can't be bothered to click through:

Guido was more than sceptical when politicians and Labour luvvie economists like Gavyn Davis started talking up the bogeyman of deflation at the same time as the government was running up massive fiscal deficits. It seemed too handy a coincidence that they would print money on a scale never seen before at the same time as issuing debt on a scale never seen before. They subsequently, coincidentally, bought the debt using the money they had just printed.

This we were told was to stave off deflation which it was emphasised was very bad. Goods becoming less expensive was somehow worse than goods becoming more expensive. If we got deflation it would be the end of the good times for ever according to even monetarist economists. Guido was sceptical that deflation was necessarily bad, history shows that there have been times of increasing prosperity that coincided with deflation. Deflation happened several times in the nineteenth century. During that era of rapid economic development there were no central banks and money was calculated as a certain quantity of gold or silver.

Deflation was not necessarily a threat to our prosperity, in a situation where the money supply is stable it is the manifestation of prosperity and pensioners know that their standard of living would have improved. With inflation now upticking this experiment in Mugabenomics* has to be reversed without setting off hyper-inflation or collapsing the government debt market. The policy authorities have figured out how to prop up the gilt market – they are changing the regulations to force banks to buy government debt to the tune of hundreds of billions. It remains to be seen if they can avoid an inflationary catastrophe, surging record gold prices suggest the markets suspect not…

*©Vince Cable, who was against QE before he was in favour of it. God knows what he thinks now.

I have an idea: let's make Guido chancellor. At least he seems to know what he's talking about.

Apology Fatigue

I would say sorry but I can't speak cat

After all this lefty "apology" nonsense for bad stuff that happened long ago, perpretrated by folk who in the main have long since gone the way of the dodo, it seemed likely that there would be something of a backlash against the idiocy, insincerity, mendacity, hypocrisy and futility of these political publicity stunts. Some of the blogs have had a pretty good crack at it today but I especially like this one from the ever-unapologetic Gerald Warner that's just popped up over on the Telegraph's website.

Gordon Brown is set to make a public apology for the Norman Conquest. Last night close aides and Downing Street insiders categorically denied that any such move was being considered, fuelling the growing consensus that a fulsome apology is imminent. One source who requested not to be named said: “Gordon has always felt strongly about the Norman Conquest and its disastrous legacy of hereditary privilege and a class-based society.”

Another Labour insider commented: “The main concern is the trauma still being endured by people of Anglo-Saxon extraction. They lost their language, their social cohesion and their political autonomy as a consequence of this foreign invasion. While England has a long tradition of welcoming asylum seekers and the oppressed, arrogant Norman aristocrats on horseback are quite another proposition. A glance at the Bayeux Tapestry shows the kind of thuggish behaviour in which they indulged. When a King of England is struck in the eye by an arrow it is clear that a coach and horses is being driven through health and safety laws.”

He hastily added that there was no reason whatever why a man with one eye should not rule England successfully for many decades, but repeated his strong condemnation of the Norman invaders: “The Battle of Hastings was an early spree by Bullingdon Club louts.” Climate change campaigners also suggested that man-made global warming may have begun with the Norman Conquest: “All those forges producing chain mail and steel weaponry, not to mention thousands of imported French horses breaking wind – the effect on England’s ecological system must have been devastating.”

Kev Engels, Professor of Historical Studies and Social Inclusion at the University of Brixton, claimed: “Exclusive, class-based terminology such as “serf”, “vassall” and “churl” date back to the events of 1066. You get social alienation due to people with “De” in their names discriminating on racial grounds against the indigenous population. A Marxian interpretation would identify this as the start of colonialism, which also laid the foundations of the class struggle.”

The question that was preoccupying the Westminster village last night was the scale of compensation that would be offered to victims of William the Conqueror. A spokesman for a left-leaning think tank said: “To apologise without allocating adequate resources to victims is meaningless.” He estimated a minimum investment of £3 billion would be needed, to fund resources for outreach, counselling and rehabilitation services.

Political observers agreed that, having ruled out a referendum on the Lisbon Treaty, an initiative hostile to Normandy, the nearest outpost of the EU to England, might be a popular stance for Gordon Brown to adopt in the run-up to a general election. A spokesman for the Football Association welcomed the likelihood of an apology, saying: “Hastings was a disaster. Our lads were knackered after a mid-week friendly at Stamford Bridge. They had horrific injury problems and should never have been asked to take to the field that day.” On a more optimistic note he added: “The Norman Conquest was a game of two halves.” Downing Street is still refusing to comment.

Warner clearly has asked himself, "Where will this all end?" The answer to that question is that it's very hard to say, but his witty reductio does give us some clue. Idiot lefties like Brown and his Australian counterpart idiot lefty, Rudd, are capable of just about any level of hypocrisy if they think it will go down well with their socialist constituencies. I just wish they wouldn't do it "on behalf of the British/Australian people." I'm not bloody sorry.

So just where will it all end? My view? Well, you have to follow it through to its logical conclusion. Given all the leftwing hand-wringing about the impact of humanity on global ecology, I suggest that the next official retrospective apology should be to plant and animal life everywhere. The shameful period of human evolution that resulted in us inheriting the status of Top Dog of the Biosphere is a stain on the history of the world, if not the universe.

I've already said sorry to my cat.

Mountainous Losses

The Royal Bank of Scotland. Bailed-out by the government with $71 Billion of our money - by far the biggest bank rescue in the world - and now to be asset stripped at the behest of Brussels right at the very bottom of the market. And this is just one banking example in the biggest British bust of all time.

The result? Well, you may ignore the bluster, the spin and the lies from our catastrophically incompetent Labour lords and masters. The result will be that British banks will lose more money than any other banks in any other country in history. The price of Brown's failure as Chancellor before his crash, and as Prime Minister after it, is there for all to see in the graph. As Mark Bathgate notes just now in the Spectator, the losses could be, according to the IMF, as much as 25% of Britain's entire GDP. That's more than three times the next most exposed country, the USA. This is, quite simply, the biggest financial disaster in British history. And it happened on Brown's watch. Thanks to Brown's overweaning arrogance and incoherent regulatory system married with, of course (inevitably), his total mismanagement of the public finances, a large but managable adjustment, which is what it would have been under a Tory government, became a meltdown - and it's not over yet.

Anyone, anyone who thinks voting for Brown in the General Election is a pretty neat idea should have their polling card confiscated. Why? Two reasons: 1) They represent a clear and present threat to the future recovery - existence even - of the country, and 2) They're obviously mentally impaired.

Anyway, Bathgate's brilliant article is worth quoting in full:

Two years after Northern Rock became the first bank failure of this crisis, another £30 billion of taxpayers’ money needs to be thrown at the banking system. Behind all the noise about improving competition and the European Commission lies one core fact: the UK banks have lost an astonishing sum of money. The above chart shows bank losses as a percentage share of GDP, and illustrates the scale of the crisis that has overwhelmed the banking system and the taxpayer. The IMF estimates that losses could be as high as 25% of UK GDP.

UK banks went on an orgy of lending around the world, becoming the biggest source of credit growth in many countries. RBS trebled its total lending in just three years, expanding its balance sheet to almost 1.5 times the size of the UK economy. Egged on by Gordon Brown – in whose tax receipts he felt he had found the “New North Sea Oil” to fund an ever grander government sector – money was thrown in almost every conceivable direction. In common with their cheerleader Brown, the banks decided there was no reason to worry about the day when the economy could decline because ‘boom and bust’ had ended. This led to many UK banks – the largest lenders at the height of the boom – facing the downturn with the lowest bad-loan reserves and the weakest liquidity position of any banks globally.

The list of bank failures that started with Northern Rocks is now long: Bradford and Bingley, Singer and Friedlander, Dunfermline Building Society, RBS, Lloyds, HBOS. With over £30 billion handed over today, the direct cost for the taxpayer approaches £90 billion, with no certainty of these sums being recouped. On top of this, there are still over £1 trillion of other subsidies being provided to these banks and others who have not needed direct bailouts, like Barclays, to try and hold the system together. This is not the end of the bill – most people will have noticed overdraft charges rising and the gap between mortgage rates and the Bank of England Base Rate soaring. UK banks have increased their margins to UK customers to pay for their losses. This is one of the key reasons that the UK economy remains, alone among the major economies, in recession. It’s not smart economics to refund the taxpayer the cost of the bailout by simply ramping up the costs of banking to the same taxpayer.

The UK bank crisis ranks as one of the most serious shocks to hit a developed economy in the post-war period. The scale of bank losses may even eclipse those of the Japanese banks in the 1990s - losses that cost the Japanese economy more than a decade of growth. Fixing the problem is every bit as important as addressing the government debt crisis, and will likely be the difference between stagnation and recovery.

"Egged on by Gordon Brown..."
True and absolute proof positive that if the bankers are the guilty ones for causing the actual crisis, on Brown's head rests the political guilt. He has yet to be brought to book for his crimes, as have many of those self-same bankers, at HBOS and RBS particularly, most of whom are Gordon's knighted chums. I think those facts are related. Don't you?

Burnham's NHS Bluster

Having been bed-ridden with some kind of stinking cold for the past few days, I thought it appropriate to do something on health tonight. That's not the only reason, of course, nor even the main one. The main one is Labour's latest attempt to steal Tory policy thunder with an announcement by their child of a health minister, Andy Burnham, that filled this morning's front pages, to rig NHS waiting list figures by making taxpayers pay for other people to go private.

Aside from the fact that this is an admission of abject failure, and that this sudden pledge, designed as it obviously and dishonestly is somehow to "Tory-proof the NHS" (as one Labour apologist put it) in an area where they are making significant headway with some excellent policy commitments of their own, some might be tempted to argue that making use of surplus capacity in the private sector in this way is a good idea. They would be entirely wrong.

Three of the central reasons why they would be wrong are that, first, private health care is preferable to NHS care, and many millions of people choose to pay the extra cost, because the spare capacity, deliberately made, creates a better service and zero waiting times. The spare capacity itself is made possible by high levels of properly managed investment and best management practice. The NHS - and government - has a lot to learn from private health care. The effect of the government intervening and paying private hospitals effectively to solve the problem of over-demand and inefficiency in the NHS will be to spread the disease: it will kill spare capacity in the private system leading, inevitably and quickly, to price hikes. In the end, private patients will actually be squeezed out of the market by government subcontracting. Perhaps this is the Labour party's real aim.

The second of the central reasons why this is such a bad idea is partly a moral one. It's not just private patients who will end up being clobbered by a government that once again seems willing to rig the market to mask its own total incompetence. It's the taxpayers as well. Who does this government think it is? It must think people are astonishingly stupid if it thinks they will not notice that they will be paying for the same health service (already the most expensive and inefficient in the world) twice if, God forbid, this government actually won the next election and brought these measures in. It is not only an insult to the electorate's intellegence, however, it is morally wrong for a government to use legislation to fleece the population for political and dishonest motives. Those motives? 1. To massage waiting list figures; 2. To further the notion that "entitlement", in the socialist sense, is some sort of moral absolute and is something that only the state, not the market, can fulfil; 3. To embarrass the Tories (though I'm not sure how they expect this policy announcement will achieve that); 4. Possibly to gain some control of the private healthcare system by, effectively, buying it off. Some might have their doubts about this last one, but people should never forget that it has always been a long term aim of the Left to kill off all competition to the state provision of services, particularly in the areas of education and health.

The third central reason why this is such a bad idea is, of course, the most simple to grasp and straightforward to explain - and it's the most powerful: it's Labour's idea and it would be a Labour ministry trying to enforce it. The past 12 years tell us very clearly, especially when it comes to PPP or PFI or subcontracting arrangements with and within the NHS (and everywhere else), that it would be a full-scale, monumentally costly catastrophe.

Health care is never free, but at least with the Tories there's a chance we might get a bit more value for money. If this Labour government is re-elected all we will have is less and less for more and more - and Burnham's blustering policy announcement proves that point perfectly.

Brown The "Useless Weirdo"

Sometimes Guido can be refreshingly pithy. His latest piece of pith is a fine example:

On his blog Bad Al Campbell argues that Dave hasn’t sealed the deal with the electorate thus; “December 5, 1996, Gallup poll. Labour 59. Tories 22. Now that’s what I call a lead. And they’re nowhere near it, because they have not sealed the deal, because they’re not serious on policy, because they haven’t changed much, and because a lot of people don’t really like them.”

Bad Al is really grasping with this line of spin. Labour are 19% behind in the polls; suggesting that if people don’t really like the Tories, they must despise Labour. The voters have come to a settled view of Gordon – that he is a useless weirdo. You can’t spin your way out of that…

"Useless weirdo," lol. A fine pith-making effort. I love it.

There is one other thing this particular blogpost throws up, however: the polls from those days, as psephological guru Mike Smithson has pointed out on politicalbetting.com until he's blue in the face, were unreliable, heavily weighted as they were in favour of Labour because of poor practices. Polling methodologies have changed beyond all recognition and for the better since then with the result that they are now, by and large, completely reliable sources that quite accurately reveal voting intentions. Campbell either knows this and is being dishonest or he doesn't and he's being stupid. Either way, he's a damn fool for making the comparison at all.

If you want to know more about why you should be careful with historical polls, Mike Smithson explains here.

Fact is, a 19% Tory lead according to modern polling techniques means a sub-200 seat wipeout for Labour if that was repeated at the general election. And it's a reliable poll. Campbell can't spin his way out of that reality, either.