John Redwood wins Newsnight

Finally the BBC invites John Redwood onto Newsnight.

We had some ex-member of the MPC, followed by Angela Eagle and the ever BBC present Red Vince Cable - giving variations on how wonderful things are - but not explaining the problem to the public.

Then came an quietly angry John Redwood.

First he explained that he was the only one of the 4 people being interviewed to take a different line from the govt ( good side swipe at the BBC there John ) and how where we are today is a result of people like him not being listened to. Kirsty Walk tried to give Angela Eagle a chance to knock that down, but John was having none of that - he wanted to make his point.

And his point was the banks aren't lending because another branch of the government - the regulator - is telling them not to.

A point of such power that immediately everyone else had to agree with it - although Red Vince did his best to distance himself from the brand of John Redwood.

What struck me about this was:

1) At last an angry right win commentator wins through by being forceful.
2) A basic and key point about the crisis was being hidden by the BBC film introduction and all three left of centre commentators. A point they all had to acknowledge once it had been made.

Well done to John Redwood - I'd like to see more of this sort of aggressive and insightful debating style. Angela Eagle was made to look wooden and Vince Cable out of his depth with the BBC looking complicit in a pro-Govt stitch up.

A good nights work.

Update: A full report is available on John Redwood's blog here.

Brown guilty of putting political pressure on FSA to allow reckless lending

The Telegraph reports: "Gordon Brown helped fuel Britain’s banking crisis by pressuring the City regulator not to intervene and stop reckless lending, Lord Turner, the head of the Financial Services Authority, said. " Full article here by Robert Winnett.

On any other day this would have caused a storm that could have sweeped the prime minster from office.

Gordon's finger prints have now been identified at the scene of the crime and a witness has identified him as leaving the scene. How long can it be before the jury of public opinion finds him guilty ?

Brown's little chat crushes Lloyds TSB share holders

There is a pattern emerging. All those who have an assets are systematically being mugged, taxed or have their assets stolen by inflation to support the unelected regime and career of Gordon Brown.

Today we discover the HBOS has losses of over £10 billion from last year. Can you remember Gordon Brown's little chat with the chairman of Llyods TSB who then rail roaded the merger through, whilst Gordon Brown made the exceptional changes to competition rules.

In short the Lloyds share holders were mugged.

PS Just heard Brown trying to communicate with ordinary people in R4 talking on the radio and with ex Woolies employees in the marginal constituency of Corby. He just lacks the common touch and could only either quote his usual tractor stats answers or say he doesn't understand and someone will get back to you. ( In the latter case a woman was asking why she had paid NI contributions for 25 years, when they won't pay her job seekers allowance because her husband works under Labour anti-marriage/broken families only welfare state. )

Is there a killer question lurking in the Westminster under growth ?

We are getting used to some apologies, a series of Bankers ( most of whom we're very pally with Labour, and many ennobled during the Labour Govt ) suddenly becoming hate figures who Gordon Brown is "very angry" with.

But I can hear a rustle in the undergrowth. Its a question. It might be the question. The question that will kill Gordon Brown's premiership as surely as the stake and hammer waiting for it at the next general election will. And it goes like this:

"When was Gordon Brown warned that British banks where running unexceptable risks ?"

There are good reasons to suspect the answer is a few years ago, and if so then Brown must resign also.

PS Yes I know Labour will think of some Spin to get around this, but the public are wise to and tired of their tricks and lies.

RBS should have been taken into protective administration and broken up.

I can understand that major banks can't be allowed to just close their doors and stop trading, even if depositors money is eventually returned under a guarantee scheme. A lot of companies who RBS provides banking facilities to, not to mention individuals, would suffer a cash flow heart attack under those circumstances.

However I think the option of protective administration was explored sufficiently. My guess is that the reason for that are political.

As an alternative every man woman and child ( and many children yet to be born ) will be paying for RBS long into the future.

I have the feeling of being robbed. Its a feeling that doesn't improve with RBS's plans to hose tax payers money on its staff, when many of those tax payers are lsoing their own jobs and savings as a result indirectly of that banks actions.

Also a bank under administration would not be paying bonuses, but handing out P45s, and flogging of profitable section of the business in an orderly way. In addition we would finally know they full depth of the whole that Labour's banker friends dug. Then confidence could return to the economy - or at least faith that a realistic picture now exists.

Instead we have what Labour needed to hang onto power for a few more grubby months.

PS Lib Dems notice the difference between Nationalisation and Administration. One has dumbed down civil servants ahving rings run around them and signing cheques with tax payers money, the other has profession foreseic aacountants going through the books with a fine tooth comb.

Also I find Gordon Browns crocodile tears over RBS bonuses sickening in the extreme. The man has no honour and must be removed from office as soon as possible.

"Should the British taxpayers have to lower their standard of living for 20 years to pay off mistakes that benefited a small elite?"

Good question. Why aren't we hearing any more of this from our politicians ?

My proposal for new taxes !

Now I thought that would get your attention.

Well lets face it we are all - after the bidding war with debt for votes is over - going to have to pay more tax.

Proposal 1: A national mortgage( or debt) tax : The Debt raised should be visibly paid back and calculated for each tax payer. A proportion of income tax should be re-badged as debt repayment tax and at the end of each year all taxpayers should receive a statement of how much they paid of the national debt and how much they paid on interest for it.

After all if its going to take 20 years to pay back then we'd better not forget the mistakes that put us here. This will ensure we never do.

Proposal 2: A general debt tax: Its now clear that debt held by people, banks, and companies involve wider risks to society, which society ultimately underwrites. Therefore there shoudl be a tax on debt (not savings). This would have the advantage of providing HM Govt an income stream which effectively allows taxation of the foreign money that has been dumped then removed from our banking sector. The timing of the tax would have to be after the trough of the coming recession, but its time that the wider damages debt does are recognised in the tax system. ( The same is true of many other economic activities and trade ).

I know how unpopular the idea of raising taxes now is with the right ( who correctly see great scope to cut state waste and reduce its role ) and the left ( who just see more debt as the answer ), but like it or not more tax must be raised.

Why not learn the lessons of the current crisis ?

The cost of Brown's encouragement to Lloyds share holders

During the share holder vote of the HBOS Lloyds merger I advised my wife to vote no, which she duly did, but clearly it wasn't a choice made by many other share holders.

Now she knows why as the merger went through anyway and she just received the following letter, which I attach for those of you who have the good fortune not to be Lloyds shareholders to read ( you need to click on it to read it - but I reproduce the key part below )..

Dear Victim Shareholder,

I am pleased to let you know that the acquisition of HBOS plc has now been completed and as you will be aware Lloyds TSB Group plc has now changed its name to Lloyds Banking Group plc. The combination will drive significant synergy benefits; the Lloyds Banking Group Board believe it will deliver total annual pre-tax cost savings greater than £1.5 billion by the end of 2011.

As shareholders will be aware, no dividend may be paid on the Lloyds Banking Group shares while any of the HM Treasury Preference Shares are outstanding, unless otherwise agreed by HM Treasury. However, the Lloyds Banking Group Board recognises the importance of dividends to shareholders and its clear intention is to achieve the repurchase of the HM Treasury Preference Shares during 2009 so as to enable us to resume the payment of dividends.

See what Charles Moore writes in the Telegraph:

No one is more conflicted in the crisis than the Prime Minister himself. You can feel him longing to attack bankers – both because everyone hates them at present and because of how Labour politics works. But he knows that the now-excoriated Sir Fred was once his close associate. Mr Brown boasted last autumn that it was his quiet word with his friend Sir Victor Blank, that persuaded Sir Victor’s company, Lloyds, to hurry up and take over HBOS – a move which seems to have turned both banks into the living dead.

Still at least the senior manager in Lloyds and the Prime Minister are being paid even if their shareholders are not. Thanks Gordon.

Do you think Gordon might nationalise your pension ?

If you think this is to far fetched - its happening in Argentina today, again.

I refer you back to my post in Jan this year where I tried to frighten you all with the prospect of Gordon Brown nationalising the banks - I suspect I didn't go far enough...

To quote from my post 8Jan08:

You can see the scene - Gordon Brown standing on the steps of No10 announcing he has just taken control of the banks in the national interest and that all our money is now guaranteed by the government ( something that it says on the bank notes anyway - and its a lie there also ) due to the current financial crisis. Some of the banks assets will be used to pay for the peoples services such as the NHS and police during the current crisis [really to pay public sector pensions] - but it will all be paid back, but just for the moment no one can withdraw more than £100/day from their bank. [ Do you think this is extreme ? Well its what happened in Argentina only a few years ago - remember Gordon Brown hasn't hesitated to spend £10Billion/year of future pensioners income fire hosing cash around an unreformed public sector ].

Its not that far off. If you think the cash restrictions won't come then I saw a serious article in the press yesterday forecasting the stock exchange having to be closed for weeks at a time to stabilise the system.

Money is now rotting in bank accounts

Let me explain. I have money in a savings account, one of those internet accounts, but not Icelandic. A few months ago inflation was officially much lower and the interest rates were higher.

Now the effective, after Gordon Brown has taxed me at 20% is 3.34%, inflation is at over 5%. That's giving a negative interest rate of over 1.4%. I give my money to the bank and it evaporates.

And yet most people seem to be calling for a reduction in interest rates to save the economy, so I guess it will happen.

So holding cash in bank deposit accounts is starting to look a little dumb, and that's before the impact of falling sterling - which perhaps has further to go with the borrowing binge Mr Brown is announcing.

I'd like to say I knew the answer to this, but I don't.

I'm thinking that in then end owning something, ie shares, may be better. Or perhaps cutting the banks out with Zorpa.

LATEST INTEREST RATES

Latest interest rates

	Effective from		AER*		Gross PA		Net PA
	15-10-2008		4.25		4.17		3.34
	01-05-2008		4.75		4.65		3.72

We are not being told the truth - it can't be just liquidity between banks

So the Standard Chartered Brown's plan has mortgages out futures. We are all in debt by an extra £20k, to go on top of crashing pension and house asset prices and rising mortgages.

A series of ministers ( but almost never a shadow minister ) have been on our airwaves talking about the strange things they saw for the first time in their lives in their briefing notes a few weeks ago - libor & liquidity. ( I thought the Newsnight on Monday night - whilst having a amateurish feel, was actually very useful in revealing some underlying problems, specifically the woman from the FT who explained how shocked she's been by how little about modern finance was understood in Westminster and Whitehall ).

If you thought about those points you'd see the fault. Apparently - so it is spun to us by the Government/BBC - the problem is banks have stopped lending to each other, so they can lend to us. So it stands to reason that one or two banks are sitting on a great pile of cash that the refuse to share ? ( Mr Humphreys was busy insisting on Radio 4 this morning that all banks have failed - forgetting the inconvenient fact for cheerleaders of the government that HSBC has done quite well. Which implies its not an inevitable failure, and leaves the government with lots of questions to answer. )

But all interbank loans are now guaranteed by , ahem you and me, yet still the loans aren't being made. Despite £500billion being put at risk.

Oddly £625 billion has suddenly been removed from the banking money markets by **Nobody will tell us**. ( £625 billion / £500 billion - same order of magnitude - suspicious ).

Is not the truth that UK plc is now seen as too much of a risk for the owners of the £625 billion to lend us their money ?

We have not been told the truth. And given the amount of our futures and our children's futures Mr Brown has just spent that calls for more than a general election, it calls for the erection of gallows.

Does anyone remeber Brown giving credit for the idea of the Bank bailout ?

It appears that the current bank bailout plan was dreamt up by two bankers at Standard Chartered, who public spiritedly tried to help the HM Treasury, and the other two, out.

Now if you watched the news you'd think it was only Gordon Brown's wonderful mind and 'leadership' that did this.

In accademic circles this is known as plagarism and it about the worse crime you can committ.

Gordon Brown should know that he worked at Glasgow Uni.

So here we are again being deceived by Gordon Brown. We know what he's really like, but the rest of the world has some catching up to do...

The demands for rescuing HBOS with English money are growing

Just listening to the radio questions are being asked by Lloyds share holders about how good the HBOS deal really is for them, given the poison pill of Gordon Browns use of billions of English tax payers money ( lets be clear it is mostly English ).

At the same time the usual special pleading from Scotland has started to keep HBOS out of the merger to save 'Scottish jobs', of course by using English tax payers money.

There is a clear conflict of interest for Gordon Brown and Alistair Darling here, and that's without the Glenrothes by-election.

Who would bet against them finding an excuse to put their self interest first and the English tax payers last, given the chance ?

England - Saving Scotland's banks and delaying independence

It is perhaps interesting to note what has happened and how it may impact politics.

The two remaining major independent banks in Scotland, HBOS and RBS, have been saved from ruin, mostly by the English tax payers, their children, their chidlrens children and their pensions.

I personally wonder if HBOS will need to be taken over by Lloyds TSB now these credit guarantees and sources of capital are in place.

There are now two candidates to buy HBOS - Lloyds TSB and the UK Govt ( ie mostly the English Govt ). I wonder how long it will take for that penny to drop. Once it does the pressure for the socialist government to buy with English tax payers money will become very high. Is there a by-election coming soon ? Surely not ....

But what this also does is blow a hole below the water line in the SNP's campaign for independence.

Lets be clear - if Scotland was independent now its choices would be a stark as Iceland's, ie who to sell your country to. ( The Icelandics look like going for the Russians ).

At the same time oil heads below $100/bbl and production from the North Sea continues its sharp decline.

There will also have been a body blow to confidence North of the Boarder.

All it takes is Gordon Brown and Alistair Darling to bring home a bucket load of English pork, which would very obviously not be available for an independent in the EU Scotland.

Oddly enough I suspect this will play well for the Unionist parties, and a future Conservative governemnt will reduce the pressure for political representation in England.

So will the Union be saved ? Ultimately I doubt it as by removing the external pressures our short term self intrested politicians have been prevented from coming to a positive vision of a future fair UK based on equality between nations, and that means at the next crisis the Union may break.

PS I now wonder if Labour won't win the Glenrothes by-election. If something on HBOS was pulled out of the hat - perhaps they will. English tax payers should weep...

See also A Free Scotland would still have to beg for English cash Angus McLeod
and I think Richard Thomson of the SNP is going to take another view...

Gordon places the blue chips on the roulette table

Guido reckons the recent set of guarantees that have come out of the government are worth £10k / tax payer.

The truth is its a gamble. It could pay of, or just lose a little but we would still be ahead.

Or the economy and markets could tank and our misery be far worse than if Gordon hadn't gambled with out money. He's placing the big chips on the roulette table now and we have to see which number comes up.

Now this all sounds a bit familiar does it ? Oh yes its like all those clever financial instruments that got us into all this trouble in the first place. Fine unless the unexpected happens - which we now know it does more often than people credit.

In short (sorry about the pun) Gordon is doing what the banks did earlier that got us into this trouble. Perhaps he should ease up on the righteous indignation next time ....

PS If you really want to scare yourself witless think about what the Treasury is dreaming up in case this fails .... My guess is the temporary confiscation of savings and pensions.

Also note that the amount of money is 4 times, by the estimate of one commentator ionGuido's post, per tax payer the amount at risk in the US.

Update: Horrifyingly its begining to look like our number hasn't come up.

One or two questions

1. Why does no one pay attention to how well HSBC have done by taking good decisions and forgoing the stella schemes of Brown's last few years over seeing the city ?
2. Is anyone from HSBC on the re badged Cabinet meeting - the whatever spin title will sound good one packed with Labour cronies.
3. How long before governments become unable to pay civil servants ?
4. When will government start confiscating our savings / pensions ?
   

Who provided and then removed the £625bn of credit ?

Robert Peston is starting to make sense to me about the current crisis over on his BBC blog here. ( There has been a lot of drivel produced by the BBC - worse of all the Panorama recently which was all about feelings and putting people on camera who had never realised interest rates change ).

His point is this:

In 2001 UK bank loans and deposit roughly matched, there was no 'funding gap'.
Since then UK banks have been raising money from money markets and wholesale funds, which has created the £635bn gap, which increasingly the bank of England is having to fund.

Mr Preston present a succinct argument that I recommend reading here.

But my question remains, as I have asked it before, who or what characterises the ultimate creditors who provided the £625bn and have now withheld it ?

Surely there can be only a few candidates in the world, specifically China and the Gulf Arabs/Saudi.

During the last oil crisis the surplus cash, which burned a hole in the OPEC countries pockets was lent to the third world, especially South America. It cause decades of misery and financial turbulence that still hasn't died down.

Is thats what happening to us now ?

Is this crisis an accident, or has it been planned ?

How responsible are the lenders of the £625bn, who have now taken much of the money back, leaving the citizens and tax payers of the west to be wiped out ?

How can the US be regarded as the worlds prime power when China, in effect, owns them ?

Are these such unreasonable questions ?

What is really worrying is that nothing like them is being asked by our politicians or the MSM. It makes you wonder if they don't already know the answer.

Jeff Randal has a different view

And its one we should think seriously on before all cheering the next gazillion spend by our government ...

Read this and tell me it doesn't make you wonder ! ( And do follow his link to his earlier article also.)

By the way I though the vote against the the rescue package by the US Congress' house of representatives was a fine moment for US Democracy. To hear people rail against the shear nerve of , as Jeff Randal calls it, "socialising the poison" with speeches about Johnny Sixpack and Ma and Pa at the corner store warmed the heart.

I can't be sure if its the right thing, but like Jeff I can't get the idea that someone is trying to pull a fast one out of my head.

This is going to be a scarey ride

As I have perhaps mentioned before at school I was made to study American History for 'O'level, and the Wall Street crash and Hoover response then FDR's new deal are a major part of that. ( If I remember rightly whilst FDR's socialism* work initially - it then failed and things returned to being just as bad as before with WWII and the UK mortgaging its Empire, for the second time in 30 years, to the US to pay to stay alive saving the US. By the way we only just paid that lot off a year or so ago. )

You've got to worry about whats going on.

House prices are going to crash, because now there's a panic on and who would take out a mortgage just now and who would grant it ?

One of my small pension funds lost money last year - goodness knows what it will do this year. The house will be worth tens of thousands less, and tax has just gone up and up.

In the medium term I'm spooked.

In the short term my stop loss order fired first thing this morning, thank goodness. No enough money to make more than a summer holidays difference to life, but there you go.

Pensions really worry me.

Banks worry me.

Employment worries me.

In short - spooked.

I suspect shortly I'll be getting very angry ...


* Amazingly the Democrats were the party of the right before these events !

PS I like this ( its postgrad student humour - and in some ways you have to go to the truly dark place that post grad students live in - or remeber it - to appreciate it).

Who is/are the creditor/s ?

Something has been bothering me for a while, and I've mentioned it in other posts but I'll have a go at stating it again.

Exactly were is all the credit that we have got into so much debt from originated ?

I heard Alistair Darling on an interview talk about inflows of foreign capital a while ago. We seem to have record low savings and high debt - which implies the money that has been lent out came from elsewhere.

We are told there is a problem about banks lending to each other - but they are in part constrained by their deposits. Suddenly there is no money to lend out - that kind of suggests the banks deposits have gone down or that no one is buying the sliced and diced mortgage debt any more.

My guess is its not deposits that are to blame. So who has left the market ?

And who is going to be buy our national debt that is going to have to massively expand to finance Gordon Brown electoral image ?

Might these two groups of creditors be the same ?

Happy to be disabused of my naive financial assumptions - but I have the nagging feeling that what's really going on is being kept quiet.

Further: EU Referendum is wondering if this is right - on a similar topic, but different take.