Britannia Radio

I make no excuse for devoting most of today's postings to this 
vitally important warning ,

Since Brussels proposes to get bogged down in two weeks of utter 
idleness it is imperative that Britain with the biggest European 
banking system doesn't have to wait for the smallest and the 
slowest.  This is the moment for unilateral action and to postpone 
dealing with the ire of the EU afterwards!

Cameron disappoints on this. Yesterdayhe  said in relation to the 
financial crisis "We need to understand how this happened, and how 
we're going to get out of the mess. I will address those questions in 
my speech tomorrow."
He DIDN'T ! Yesterday he was good . Today he didn't rise to the 
moment of history which we face or follow up some very valid points 
he made yesterday which desperately need enlargement.

"Cometh the hour --- But where was The Man" ?

xxxxxxxxxxx cs
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EUREFERENDUM Blog   1.10.08
No shortage of warnings

Mark Wadsworth draws our attention to the Institute of International 
Finance, reported in The Financial Times on 4 April 2008.

The IIF then said there was an "urgent need" for policymakers to 
consider changes to mark-to-market accounting rules to avoid 
"unintended procyclical consequences which could prolong credit 
market problems".

It is now 1 October. The US is just beginning to act and the EU is to 
"look" at the problem on 15 October. That's "urgent" for you!


We get what we deserve

To judge from the US press - which has "exploded" with news and 
discussion on the "mark to market"  [See my posting earlier "Cutting 
the Gord(on)ian Knot" -cs] rule - David Cameron should be 
congratulated for yesterday putting his finger on the one issue 
which, in the judgement of an increasing number of experts, is wholly 
responsible for perpetuating the current financial crisis.

Putting this into perspective, one only needs to quote the Wall 
Street Journal editorial. It says, "Mark-to-market accounting rules 
have turned a large problem into a humongous one." Many experts, 
Congdon included, are attributing this rule to the failure of 
Northern Rock, Lehmans and, most recently, Bradford and Bingley, all 
of which were solvent by traditional accounting rules and need not 
have gone down.

The problem having been identified in the US, the responsible 
authority, the Securities and Exchange Commission (SEC) has moved 
with speed to "clarify" the rule, bringing comment from The 
Washington Post, the LA Times and hundreds of US media outlets.

There has been discussion on all the main US TV channels and the US 
blogs have been hosting a storming debate about the rule, its meaning 
and what needs to be done about it, with blogs like Powerline 
offering an example of the type of informed comment for which the 
best US political blogs are rightly valued.

So intense has been the discussion and interest that now, as the 
Paulson's "bailout bill" goes back to Congress, a proposal is being 
considered to scrap the rule altogether. If this happens, by the 
weekend, "mark to market" will be toast. If the experts are correct, 
the US banking system will be well on its way to recovery. According 
to some, it may not even need Paulson's $700 billion bailout.

So, what of the UK scene?

Despite Cameron's perceptive - if belated - intervention, his exact 
comments have been retailed in only two mainstream newspapers, The 
Scotsman and The Daily Express, without comment or explanation. As 
for the "political" (or any) UK blogs - apart from this one - my 
initial search yielded only one ['Power-to-the-people'] which, with 
unintended irony, tells us:

Finally, he suggested that he would support the government in its 
endeavours to address the complex issue of "marking to market", a 
process whereby banks price daily their assets which, it is argued, 
is causing bank stocks to fall even further. The proposal is that 
this practice should be suspended. Quite how this would work, Cameron 
did not explain, therefore, we can assume that it will be challenging 
or perhaps, not even possible.

The author is dead right when he writes that, "we can assume that it 
(suspending the rule) will be challenging or perhaps, not even 
possible", the reason being that "elephant in the room", the fact 
that "the practice" is locked into an EU directive. Thus, while this 
issue in the US is being chewed over in 21,390 blog posts under "mark 
to market", the issue over here is simply not on the agenda. The 
media and the the bulk of the British political blogosphere are 
silent. The chatterati don't "do" Europe, policy or anything serious 
- with the (now) admirable exception of Centre Right.

Despite that, here in "Europe", the government is acting. Not the 
posturing bunch of fools we have in London, but our real government 
in Brussels. This we learn from Retuers with a piece published on the 
net, by Business Day - a South African magazine, for Chrissake!

This piece tells us that the EU will "look at whether mark-to-market 
accounting rules . could be eased." But that will not be until 15 
October, two weeks hence. And, if they do "look", they will not make 
any immediate decision. For anything to happen, the whole laborious 
process of EU decision-making must kick in. It could be months, if 
not years, before anything is changed.

Thus, while Brussels fiddles, the banks burn.

That, more than anything illustrates where politics stand in the UK. 
Contrasted with the United States, where there are still some 
vestiges of democracy, the issue is widely chewed over in the public 
domain. Then, with speed, the authorities and elected representatives 
react.

In this country, where the power lies with Brussels, discourse is 
suffocated under a stultifying blanket of deception, so pervasive 
that the government does not even mention the problem.

We have a leader of the opposition who cannot even bring himself to 
mention an "EU directive" resorting instead to the euphemism, 
"international regulation". Nor does he dare to say that we have to 
go cap in hand to Brussels to resolve the issue but instead resorts 
to babbling about having "our regulatory authorities, together with 
the European regulators," address "this difficult issue."

Even what Cameron did say, though, should have sounded the alarm 
bells - yet nothing. When politicians actually talk about policy and 
solutions they are ignored. Small wonder they resort to the theatre. 
That is how they get the attention and the headlines.

The problem lies thus not only with the politicians. It lies with the 
media, with the bulk of the blogosphere and the rest, who prefer 
entertainment and trivia to dealing with real issues, real policies 
and real world solutions. To that extent, we get what we deserve and 
deserve what we get.

Behave like infants and you will be treated like infants. To see what 
happens when grown-ups get involved in politics, look to the US - and 
weep.