Members of Parliament owe a very special duty to the Armed Forces. Constitutionally and practically, they are the only people in the country who can directly hold the government to account for its actions in putting them in harm's way. Associated Press, retailed via IHT, informs us that Deutsche Bank AG reported a surprise third-quarter profit on Thursday, "helped by new European Union accounting rules that limited its write-downs of shaky assets hit by the subprime crisis to €1.2 billion." The art of statesmanship consists as much as in foreseeing as in doing.Saturday, November 01, 2008
A man without honour
But there is much more to it than that. Unlike any others, the men and women who are placed in this position do so under orders, which they are obliged to obey, even if that might put their lives at risk. They are not entitled to refuse those orders and, furthermore, they are not allowed to complain.
Under certain circumstances, the very act of complaining publicly might be a criminal offence – a breach either of the disciplinary code or of the Official Secrets Act. Short of resigning – and not always even then – members of the Armed Forces do not have freedom of speech.
Continued on Defence of the Realm.
COMMENT THREADWhat a difference a rule makes!
Investors, we are told, "were cheered by the better-than-expected performance into the headwinds of the global banking and credit crisis," even though net profit was down 74 percent from last year's third quarter. The boost came with the bank earning €414 million in the July-September period, down from €1.6 billion a year earlier but at least the figure was in the black.
The real story behind this was that it had written down €1.2 billion in the quarter on mortgage-backed securities, leveraged loans and commercial real state, among other assets but had been saved from writing down another €845 million by the change in the EU-approved accounting. This had allowed companies "to reclassify assets rather than mark them at what some say are beaten-down market prices."
Said Isabel Schauerte, an analyst with Celent: "A reclassification of assets has prevented otherwise sizable write-downs from eating into Deutsche's bottom line this quarter," adding, "With new accounting rules in place, reported earnings certainly have a more 'subjective' character."
And how did this come about?
Well, in early October we were reporting the dire effect of the "mark to market" rules and noting that they were implemented by EU law. But we also suggested that, to amend them, the EU would have to go through the tortuous process of amending a directive, which could have taken six months or more.
However, we then picked up the Ecofin decision a few days later but where, it transpired, the Gordian knot could be cut was in prevailing on the International Accounting Standards Board to change its own rules.
This was picked up on 15 October by Greg Hands MP,who was warning anyone who would listen against the change. Fortunately, he was completely ignored, not least by the EU commission. With the IASB amendment in its hot little hands, it was able to take a short-cut, amending its own Commission Regulation. Thus, on that very day we saw:COMMISSION REGULATION (EC) No 1004/2008 of 15 October 2008 amending Regulation (EC) No 1725/2003 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Accounting Standard (IAS) 39 and International Financial Reporting Standard (IFRS) 7
With that, we see the Deutsche Bank AG result, confirming beyond doubt the malign effect of "mark to market" and the effect of what we thought at the time was a "minor and cosmetic" change to the rules. But on that rested an €845 million write-down and made the difference between profit and loss – comfort and crisis.
When the full tale comes to be told of this financial crisis, we may finally see the malign role of the EU-based mark to market rules – the story that, this side of the pond, almost everyone missed.
COMMENT THREADFriday, October 31, 2008
"Cavalier at best, criminal at worst"
That is the verdict of Major Sebastian Morley, commander of D Squadron, 23 SAS on the use of "Snatch" Land Rovers, who claims that Whitehall officials and military commanders repeatedly ignored his warnings that people would be killed if they continued to allow troops to be transported in this vulnerable vehicle.
Continued on Defence of the Realm.
COMMENT THREADWhat are politicians for ...
John Bright 1811-1889
We saw the financial crisis coming, we predicted the armoured vehicles in Iraq and Afghanistan were dangerously vulnerable, we predicted that we were in for a spell of cold weather, we predicted trouble with Russia, and we predicted that there would be a further eruption of violence in the Congo. And we are predicting a major shortfall in electricity supplies.
That is not to claim any great prescience or even to claim that we were (or are), by any means, the only ones. Even on our great cause celebre, theSnatch Land Rovers, we were by no means the first to raise concerns.
What this blog does – as indeed do many others, in the blogsophere, in the media and elsewhere, is apply basic information gathering techniques and apply analytical skills and judgement. And, like many others, we come to straightforward, clear conclusions, which so often prove to be right, simply because that is what the facts are saying. It is simply a matter of joining up the dots.
Yet, as we see Mr Miliband jet off to the Congo for crisis talks, "amid intense diplomatic efforts to end the latest fighting between rebels and government forces", one gets the impression that, once again the politicians have been caught unawares.
The alarming thing is that, as ministers and functionaries, these people have vastly resources than do we, and many like us. They have experts, analysts, a myriad of civil servants, diplomats and the rest – to say nothing of huge financial resources. Yet, each and every time we get some great disaster, or problem, they seem to be surprised.
If that is the case, one really does wonder what politicians are for. If they can't do better than this, and are forever reacting to crises instead of predicting them and heading them off, we might just as well dispense with them and deal with the issues as they arise.
Perhaps if they spent a little less time pratting about over issues like Jonathan Ross – and grandstanding in general - and a little more time doing their day jobs, the world's catastrophes might come as little less of the surprises that they so often do.
COMMENT THREAD
Saturday, 1 November 2008
Posted by Britannia Radio at 18:32