POLITICS CORNER

[Tardis]

the hilarity scale just became extended:

The labour Party admits that the security for it's annual conference will be done by:

G4S

[Stanley]

Mitt Romney's attempt to polish his credentials on foreign policy slid off piste yesterday when he put his foot in it by suggesting that London had problems putting on the Olympics. LINK.

[Stanley]

I was thinking while I watched the opening ceremony last night... The basis of all conjuring tricks is misdirection. The spectator is persuaded to see what the conjurer wants them to see by visual tricks and psychology. The Olympics could be the biggest misdirection ploy yet. The problem for the politicians is of course the hangover that will inevitably come in three weeks as we move towards reality and autumn.
Meanwhile, in another part of the forest Moody says that the UK keeps its AAA rating and the IMF that they expect our economy to move out of recession in the second half of the year. Not too sure what basis they can have found for suggesting this, I doubt it myself, too many external events poised on the brink... I can't help wondering at the back of my mind if we aren't being manipulated on a global scale. Remember Naomi Klein's book 'The Shock Doctrine'? Basically the history of the management of crisis for ulterior motives, something that the IMF has been deeply involved in for many years. Strange how during the crisis it makes sense to a right wing government to roll back the advantages gained by 85% of the population over the last 100 years while essentially leaving the bastions of wealth untouched. True, we see minor spats as evidence of fraud come to light but in essence there is no change in the financial system. I am, sorry to say, deeply suspicious.
The IMF also say that Spain is definitely going to need a bail-out. We tend to forget about the problems of the Mediterranean countries but the problem is still there and secretly the EU must be extremely worried because if, as seems likely, Spain is going to need a massive bail-out, Italy will not be far behind. External events dear boy.

[Tardis]

the tories have said that G4S will also provide the security for their Conference

[Stanley]

We're getting close to decision time on the Euro. The phrase 'we will do everything necessary to preserve the Euro' or variations on that theme has been coming from various participants over the last few days. Question is, what does it mean? At first the markets took it to mean that as much money as is necessary would be chucked at the failing Mediterranean economies but it's beginning to look as though it could mean something entirely different. 'Everything necessary' could equally well mean that the rescue efforts would be abandoned, the economies in trouble allowed to go to the wall and the Euro would become either a two tier currency, in effect instant devaluation for the failing countries, or it could mean them leaving the Euro zone. The use of the obscure phrasing looks like a ploy to keep the markets quiet while whatever the plan is is put into operation. It would be a massive exercise requiring modification of all money in circulation, prevention of capital flight etc and this can't be instantaneous. Either of the two worst case scenarios means big losses for the market. Question is will the markets suss this out and what will be their reaction? The sensible course would be to get out as fast as possible.
If the statements aren't clarified and made clear that this means unlimited funding, the market's preferred option because it protects them, they are going to react. If it is worse case they are going to react. We may be looking at the end game.
Meanwhile, at home, we concern ourselves with bread and circuses... Go figure! (And get the tin hats out!)
A bit later... a depressing report on conditions in the high street with forced closures up during June, reckoned to be mostly due to the failure of summer sales and early reductions. Big rise in bankruptcies during June.
There was a nice piece on R4 yesterday in which eminent economists were asked to recommend summer reading for G Osborne, I liked the man who recommended 'Basic Economics'.

[Stanley]

Cameron is getting flak from an unexpected source. It has been noted that when he turns up at an event Team GB fails. They are talking about 'The Curse of Cameron'! As if he didn't have enough problems.....

[Tardis]

M4 money supply figures show 6% decrease over year

So with that amount of credit contraction, despite the BoE pumping loads into the system, is it any wonder that growth is so low?

[Whyperion]

If one is paying off debt , and aiming for a 5% cut in govt expenditure then a 6% fall in money supply seems about right.

[Tizer]

We're getting close to decision time on the Euro. The phrase 'we will do everything necessary to preserve the Euro' or variations on that theme has been coming from various participants over the last few days. Question is, what does it mean?....

It seems to be accepted now that Greece will fall out of the Eurozone soon. Italy could follow although the resulting tidal wave will be much bigger. While I'm playing with metaphors....I think the approach taken by the European leaders behind the scenes is a bit like dealing with a building on the verge of collapse - taking it apart slowly, quietly and very carefully, and don't tell the folk inside what you are doing or they might panic, try to rush out and bring the whole place down in a cloud of dust and knock down neighbouring buildings. Don't tell those outside either, or you'll have everyone panicking. Perhaps the leaders should fly in a gang of steeplejacks to advise them!

[Tardis]

If one is paying off debt , and aiming for a 5% cut in govt expenditure then a 6% fall in money supply seems about right.

different bits of economics there

The state does not contribute to GDP, because it must first take money in taxation to fund those schemes

The bit of capitalism we are supposed to run, means that say a business were to open up in Barnoldswick and needed new roads built to service it, the cost would generally be met out of general taxation across the piece thereby spreading the cost and the period of time over which the compnay would effectively pay back (hopefully) in both business rates and other taxes.

[Tardis]

The M4:

http://en.wikipedia.org/wiki/Money_supply

it is about "liquidity"

[Stanley]

Good analogy Tiz and the problem is of course that the timescale of the rebuild is too slow to deal with the immediate problems. There are straws blowing in the wind: Why does the US send its chief economic adviser to a remote island in the North Sea where the German finance minister is on holiday? We here little about the case in the German Constitutional Court which is holding up any involvement by Germany in the new stability fund. This can';t be decided before September at the earliest and even then there is the small matter of the German electors. Greece has found that the last bail-out wasn't quite what they expected. Their impression was that if they elected a moderate government and conformed to the new rules they would get the money. They haven't got it yet because the EU has moved the goalposts. All this is very badly reported and I'm sure there is much more we don't know about. I am convinced that a decision has already been made to pursue the twin goals of greater political union and a two speed Euro (or something similar). This would be bad news for Greece and Spain and if they fall Portugal and Italy are in the firing line as well. Question for the EU is how long they can hold the lid down. On past performance it won't be long before someone lets the cat out of the gag. (If indeed it exists) The reason the markets are keeping quiet and going along with the status quo is that if they do anything different and rock the boat they will be among the losers.
Meanwhile... if you want an insight into the further reaches of US presidential race shenanigans have a look at this LINK.

[Whyperion]

Tardis , you are forgetting the s106 payments from private enterprise ( payments for road upgrading , education budget on new build houses ).

Always a blur to me too in where govt supplies an economic activity for a fee or service charge is that not part of GDP ?
Not that it matters manf. output down about 1% in July.

[Stanley]

The head of the ECB held a press conference yesterday and it was obvious that he was trying to reassure the markets without giving anything new beyond vague statements. When pressed I'm afraid he lost it and gave a good imitation of a banker trying to hold back the inevitable. Watch the markets! This is getting serious. The EU ploy to buy time is wearing thin. Italy is expected to ask for some sort of a bail out shortly. This could be the last straw.

[Tardis]

yes, 106 monies do help, tough I think that you would actually have to study what they actually pay for. Most housing developments etc, pay for play parks

106 monies do not cover motor ways, railways and stuff like that. Maybe reshaping a road feature with a round about, but the future maintenance costs are entirely bourne by the state.

[Tardis]

Vince the Cable visited Burnley this week

Someone I know was present, and said that there was no heating on at the event so it must have been to impress upon him that there was a rather frosty reception.

He placated a few, but still rolled out the "economy has had a heart attack" and I'm sorry but after a heart attack the patient generally isn't paralysed.

It is beginning to equate much more to a stroke, and the patient may have to come to terms with the issues because the long term outlook is a very slow recovery, providing that the patient does not relapse

[Stanley]

Disturbing straws in the wind from Europe. Remember that the German Constitutional Court is considering the legislation that will allow Germany to fully support the latest bail-out fund. An unfortunate picture of German politicians gave the impression that one was giving the Hitler salute. Remember the Greeks protesting against German supervision of the day to day work in their finance ministry when they said it smacked of German occupation in WW2? Protests come out of Italy, first they say that "it is almost certain" they won't need a bail-out. (Oh yeah?) Second they say that German influence could trigger splits in the EU. In other words, 'don't mention the war!' Not good, there are enough problems without this rearing its head.

[Stanley]

Nick Clegg throws his toys out of the pram after Tories drop Lords Reform. He says that in that case the Liberals will vote against Boundary changes. I have no sympathy with him or his party. They jumped on board a coalition with a Tory majority simply to gain power and have been almost totally out-manoeuvred. Tough! This also flags up the problem of internal party differences damaging the normal course of good governance in a coalition. The argument that they have modified Tory behaviour by being inside the tent doesn't hold water. They could have made much more difference by joining Labour in votes to attack a minority Tory government. With hindsight, this could have been a better way and would have improved the LibDem standing. As it is they will be annihilated in the next election.

[Stanley]

The euphoria about gold medals has been a useful smokescreen for the Coalition but the feel-good factor might get a bit of a dent this morning when the BofE releases its latest quarterly forecast of growth. The leaks suggest it is going to be a downgrade to zero growth which fits in with the recent reports by the industrial buyers, usually a fairly good forecast of future activity. Add to this a report expected this morning showing that hirings have fallen, particularly in London. This will show up in unemployment figures. How long will it be until Ossie and Cameron realise that chucking money at the banks (another £40 billion in the pipeline if they take it up) is like chucking it into a black hole. Injecting money into the economy is the right thing to do but at the bottom, not the top. The most efficient way of doing this at the moment would be to give this windfall to the local councils who are desperately short of money and cutting back all round. (Less than 50% of the cuts have taken effect to date so this will get worse) This money goes into the economy at the lowest level and gains us the benefit of the multiplier effect as it is spent immediately. Despite all the 'safeguards' embedded in the bank subsidy to make sure the money is lent the system is slow and the money will tend to stick in the bank's capital assets for at least a year. What we need is immediate measures and the councils are the quickest way of getting it into the demand chain. Of course the problem is that this way would not be a loan but a subsidy.... Ossie should read basic economics! I wonder how long it will be before even the rabid Tories realise the reality of this. Their capital will suffer as much as anyone else's in the next 10/20 years of depression. Yes, depression! If we don't act quickly that's the word we will be hearing.
What a lousy government......

[Tardis]

Baroness Warsi is in Earby

[Tardis]

Members should refuse to attend any meetings and activities outside school session times which are not on the school calendar and which are not within directed time.

Just have to wonder who is actually winning this sport in schools arguement, as it appears to be a race without any start line or obvious finish

[Stanley]

Balance of trade figures add to the negative indices coming in. Mind you I'm old enough to remember the time when we were always told that BofT didn't matter as our 'invisible exports' balanced them out. The Post Olympic hangover in Downing Street is going to be a cracker!

[Bruff]

That's an opaque statement from the NASUWT if ever I saw one. Presumably if all the sports fixtures of a Wednesday evening/Saturday morning say are fixed up at the start of the school year they become a part of the 'school calendar'? Not sure what 'directed time' is - is it contracted time? Or is the time that 'thou shalt commit to sport' for example?

The debate (if indeed there is one to be had) is a bit depressing actually. The latest missive from the PM on this is that the previously prescribed 2hrs per week led to 'lots of schools doing Indian Dance or whatever'. Well first, that word 'lots'. Meaningless. An anecdote. Second, is there a problem with Indian Dance (I have to say it's strange he mentions 'Indian' Dance)? If so why? For example, are we talking about sport or physical exercise? If it is both, then 'dance' has its place surely, Indian or otherwise.

Frankly, I don't know what on earth's going on. On the one hand, the creep to limp-wristed, non-competitive, liberal approaches to sport in schools these past 20-odd years has led to errrrr.....the biggest medal haul in over 100 years from sportsmen and women across all backgrounds and education. Contrast this with the glory days of competitive sport and cold showers in the 50s and 60s when we won errrrrr....nothing like as much.

I think I'm about to disappear up my own fundament.........

Richard Broughton

[Tripps]

Thanks for that Richard - brilliant observation - wish I'd thought of it.

Some similarities with health where we are told we are all obese etc, yet life expectancy continues to rise.

[Stanley]

Richard, I agree with Tripps.... Is a 'missive from the PM' actually from him or is it just some PR wonk? Private Eye very good on selling sports playing fields off etc. Perhaps this is the key to more sports honours, sell them all off and make sports a more certain route to celebrity status than X Factor. Or perhaps youth unemployment is the key, the kids have more excess energy to put into training.