It would seem that Mervyn King and the Bank of England can only play
one tune which unfortunately is the WRONG tune! The whole economy
continues to be mismanaged and the very man who refused to take
action at HBOS has been promoted by Gordon Brown.
As bankers quibble over bonuses, savers are being forced into penury
by the destruction of their savings. Any bonuses paid out in the
last four years can be considered as being paid out of stolen funds
and should be recovered.
The second piece from Simon Heffer starts off with Jacqui Smith sort-
of fiddling her expenses. But don't be put off as he soon turns to
the way this government has become all powerful having emasculated
parliament. This leads straight on to what ought to be done about it!
xxxxxxxxxxxxxxx cs
========================
TELEGRAPH 11.2.09
1. Bank of England Governor Mervyn King says UK economy is in 'deep'
recession
The Bank of England Governor Mervyn King has warned that the UK is in
'deep' recession and delivered its clearest signal that it will move
beyond cutting interest rates to help revive the economy.
By Angela Monaghan
The risks to the economy remain "heavily weighted to the downside,"
the Bank of England said today in is its gloomiest assessment so far.
The speed of deterioration is accelerating, the Bank said in its
latest Quarterly Inflation Report, and the economy may shrink by 4pc
by the middle of thus year. Inflation will drop to 0.5pc at the end
of next year, it added.
Governor King also gave a sharp signal that interest rates are
heading below 1pc as the Bank steps up efforts to prevent what's
already the deepest recession since the early 1980s turning into
something worse. The news drove sterling lower against the dollar.
The report provides "strong support for our view that rates are
heading to zero or very close," said Jonathan Loynes, an economist at
the Capital Economics.
Today's assessment of the economy comes as the barrage of bad news
from most parts of the UK economy continues. Official figures
released last month showed the UK economy shrank by 1.5pc in the last
three months of the year. Figures released earlier today showed
unemployment reached nearly two million, its highest level for almost
12 years.
Governor King and the rest of the Monetary Policy Committee have so
far reacted to the downturn by aggressively cutting interest rates,
the speed of which increased after the collapse of Lehman Brothers in
October deepened the crisis and its fall-out on the wider economy.
The Bank today also signaled it will take measures to inject more
money into the economy as earlier moves to make money cheaper become
redundant. These measures include buying assets such as corporate and
Government bonds.
===========
2. Jacqui Smith is a symptom of our consensus of cowardice
Simon Heffer says the lack of outrage over the Home Secretary's
expenses is a sad reflection on our politicians.
It is a measure of our cynicism about politicians and our
archaeologically low expectations of them that there should have been
so little outrage about the expenses of Jacqui Smith, our Home
Secretary. There is no suggestion that Miss Smith has broken any law,
or even rule. But she has cunningly exploited an over-generous and
unduly loose system by which MPs claim expenses in order to fill her
handbag with taxpayers' money. To any right-minded person, her main
residence is the substantial house she owns in her constituency. It
is where her personal effects are mostly kept, as with those of her
family. It is where her children live. Yet she claims the London
house she does not own, but where she lodges with her sister, is her
main residence. The authorities are happy with this, and she profits
accordingly.
The authorities seem happy with quite a lot, such as married couples
of MPs claiming allowances for living in the same property. Greed, as
Gordon Gekko once said, is good: all the more so when funded at no
risk to oneself by the public. It was not that long ago when such
behaviour - very much within the letter of the law, but far from
within its spirit - would have been condemned and those responsible
would have been hounded out of Parliament for it. Now, a great
officer of state and other MPs can indulge in it. With all the
resignation imposed upon us by experience we shrug our shoulders, and
the MPs carry on pretending they are fit to rule us.
We know Miss Smith's game. She will struggle to hold her seat at the
next election, as Labour will struggle to hold the country. Faced not
just with the loss of a ministerial salary but also an MP's one (with
all its juicy expenses), and with life in the House of Lords perhaps
no longer a gravy train, it makes sense to coin it in while you can.
This includes having her husband on her payroll, too. If lean times
hit the Smith household, there should be a bit of fat to live off
while the Job Centre does its work.
Inured to bad behaviour by those in public life as we are, we are
also, I fear, to blame. When the handle on the fruit machine was
being pulled and came up with three oranges day after day, nobody
minded too much if MPs were given generous expenses, and if the
system under which they claimed them maximised their benefit. There
was plenty of money around, after all. We were all in clover. Houses
were traded up and extended. Cars became bigger. No restaurant worth
its salt presented you with a bill that did not make your eyes water.
You did not have to be in the City to get bonuses and increments.
Armed with this cushion of cash, we thought mainly about ourselves
and our indulgences and didn't care too much about how things were in
the world outside our cocoon.
So we let those whose decisions affected our lives proceed largely
without account. In Parliament, a large Labour majority neutered
backbenchers, an opposition with nothing to say and an ineffectual
Speaker allowed free rein to a ruthlessly manipulative Government.
The executive became overbearingly powerful. Parliament was rarely
included in its counsels. Even when it was, the docility and lack of
quality of so many people in it hardly made any impact on the
Government's arrogance and control-freakery.
As it turns out, this lamentable state of affairs ran in parallel
with the gross mismanagement of our main export industry and one of
our main employers - the financial services sector, whose former
luminaries [only four of them from only 2 banks -cs] gave a contrite
account of themselves before a select committee yesterday. (I was
waiting for one of them to ask the select committee why it hadn't
savaged Mr Brown for his mismanagement of the supply of money that
caused the problem, and the misregulation of the banks that
exacerbated it: I waited in vain.) Just as electors allowed the
political class to get away with their louche behaviour for so many
years, so the frequently ornamental types who sat on company boards
did not hold chief executives properly to account while acts of
financial absurdity were being engaged in. Institutional
shareholders, many of whom sat on each other's boards and often had
limited understanding of the businesses they were supposed to be
superintending, were slow off the mark, too. After all, everything
was going well; the cash register kept ringing; asset values kept
climbing; where was the problem?
We all now know where it was. However, those of us who believe in the
free market understand the essential principle of caveat emptor. Few
"mended the roof while the sun was shining". Some borrowed
recklessly. Some did not ask where all the money was coming from:
they just spent it. Notions of the creation of true wealth were
discarded. So, as Captain Scott said just as the snows closed in for
the last time: we took risks, we knew that we took them, things have
turned out against us, therefore we have no cause for complaint.
Whether we like to admit it or not, we are having what was coming to
us. [All those "we"s who are complicit ?? What about those 'we"s
who never ran up debts, who never used the notional gains in house
values to live the life of riley, or those 'we"s who saved for their
old age and DID mend the roof? You're forgetting us Mr Heffer. -cs]
Perhaps, we also have the politicians we deserve. After all, we elect
them. We know they are in some cases venal, greedy, ignorant,
spineless, weak, manipulative and manipulated. Some of us are lucky
to get MPs who are not like that. Most, I fear, are not. Now that we
need a strong, disinterested governing class to represent us in this
time of grave trial - in what Ed Balls imagines, with some
justification, is the worst period in our economy for a century - we
lack them. Worse, it only just occurs to many of us that we lack
them, when in fact we have lacked them for perhaps 15 or 20 years.
Parliament is almost entirely bereft of people who know what is going
on, and who have something intelligent to propose about it. Those who
do - the Redwoods or Fallons [neither in the Shadow cabinet -cs] -
are regarded as dangerous mavericks, even by their own sides.
Consensus is always bad in politics, especially (and this is usually
the case) when it is a consensus of self-interest and cowardice.
Parliament fails to hold derelict politicians to account, because the
relatively greater and newly unchallenged power of the executive
prevents it. Look, for example, at how little this great financial
debacle has been debated. The debaters may well not be up to the job,
but at least they should be allowed a try.
Might something good come of all this? It could. We could work out
that Parliament must never again be reduced by an over-powerful but
mediocre government to the role of an ornament. This requires no
change in our constitution; it requires MPs to enforce the existing
constitution properly.
The elective dictatorship of which Lord Hailsham warned over 40 years
ago has arrived, with the full support of the political class, and
with itself as its own main interest. The catastrophe we see around
us is its result, and the continuance in office of people like the
present Home Secretary one of its many, grievous, symptoms.
========================
ECONOMIC and other 'Shorts' 11.2.09
TIMES
=Credit Suisse records worse than expected loss
Market volatility wrong-footed the second-biggest Swiss bank in
December, leaving it SwFr8.2 billion in the red
=Centrica faces British Energy revolt
Shareholders voice anger at the utility company's proposed £3.1bn
nuclear deal and call on it to buy gas assets instead. [ They must
be mad. Are these the same shareholders who invested pension funds
into dodgy banks ? -cs]
TELEGRAPH
=Chinese exports fall by most in 13 years, imports plunge
China's exports fell by the most in almost 13 years as demand dried
up in the U.S. and Europe, while imports plunged by a record
=Trade deficit narrows as weak pound lifts exports
=2 trillion US bank rescue fails to reassure investors
US Treasury Secretary Tim Geithner's plan to tackle America's banking
crisis was branded as "vague" and "disappointing" by investors.
=Asian shares fall after President Obama says US faces 'full-blown'
crisis
=RBS, Morgan Stanley and UBS to axe 6,500 jobs
Royal Bank of Scotland, Morgan Stanley and UBS are cutting more than
6,500 jobs in the latest blow to the ailing financial services industry
=
FINANCIAL TIMES
=Oil demand to fall at fastest rate since 1982
IEA expects 1m fewer barrels per day to be consumed this year
=Graduates face uphill task to find jobs
Job vacancies for graduates are expected to fall this year for the
first time since 2003, according to a survey of almost 250 leading
employers. Graduate vacancies overall are expected to fall 5.4 per
cent, while graduate starting salaries, another casualty of the
recession, have been frozen for the first time since the survey began
in its current form in 1987
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