Signs of things to come #1

No doubt this is somewhat political, but they do it because they can:

Dagong Global Credit Rating Co used its first foray into sovereign debt to paint a revolutionary picture of creditworthiness around the world, giving much greater weight to "wealth creating capacity" and foreign reserves than Fitch, Standard & Poor’s, or Moody’s.

The US falls to AA, while Britain and France slither down to AA-. Belgium, Spain, Italy are ranked at A- along with Malaysia.

…

Dominique Strauss-Kahn, chief of the International Monetary Fund, agreed on Monday that the rising East is a transforming global force. "Asia’s time has come," he said.

Not sure what effect this will have on interest rates etc., but in my understanding, it can only bring upward pressure to bear.

AJ

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Standard & Poor put skids under Greece

… sorry.

I’ve been trying for several days to write something about the situation in Greece.

I think I’ve been going wrong, in trying to draw lessons for the UK, be it in terms of the Euro, debt, GDP, state spending etc. Each time I’ve run into a brick wall. We’re not really in the same boat as Greece whichever way I try to frame it.

The Greek situation continues to fascinate me nonetheless. Today their sovereign debt was downgraded to junk status.

Greece’s debt has been downgraded to noninvestment status by Standard & Poor’s amid mounting fears that the debt crisis in Europe is spiraling out of control.

In a statement Tuesday, the agency says that it is lowering its rating on Greece’s debt three full notches, to BB+ from BBB — the first level of speculative, or junk, status.

The outlook is negative, meaning the agency could downgrade the rating again.

The agency is also warning debtholders that they only have an average chance of between 30 to 50 percent of getting their money back in the event of a debt restructuring or default.

The Germans are making noises about forcing Greece out of the Euro, Merkel is equivocating about a rescue-package. Deeper cuts are being demanded of Greece, and there’s already civil unrest about what they’ve had to do so far and what is to come as a consequence of a Eurozone/IMF bailout.

There’s a knock on effect on Portugal, with dangers present for Ireland and Spain, too, as well as the rest of us who trade with the Eurozone.

Meanwhile, much better informed views than mine here, at Burning Our Money.

This can’t possibly end well.

AJ

Setting the scene for a Labour Poll Lead

I think we all know how Labour’s media machine works – expectation management.

Last week, Simon Heffer came up with and idea, to which I made reference yesterday.

There is one money-saving move Mr Darling could take in the Budget that would cut the Tory party off at the knees: and that would be to announce that he will not after all levy taxes at 50 per cent on the so-called rich. He would have perfectly sound fiscal reasons for doing this, aside from the political devastation this would cause to the credibility of a Tory party that cannot dare to promise such a thing.

So, here, to set the snare, is bogeyman Ed:

Cabinet sources say the Schools Secretary and his wife, Work and Pensions Secretary Yvette Cooper, want the threshold for the new 50p top rate of tax to be reduced from £150,000 to £100,000.

Cabinet sources? Uh huh?

And Badgerchops isn’t quite as unequivocal today as Lyam Byrne was on the Daily Politics last week.

And consequent to that, and the on-going double-dip worries,

Sterling fell by nearly two cents this morning after a member of the Bank of England’s Monetary Policy Committee, warned that the British economy could shrink again.

So maybe Darling is playing a dangerous game with the markets. but if he ditches the 50p rate (because it’ll cost money), repeats the bankers’ bonus tax in 2010 and spends that on a sop to the povs, Labour could be ahead in the polls by the time Gordo goes to see the Queen.

And my 10-1 will start to look like a lovely little bet.

Dammit, Beavis.

AJ

Leading the way out of the.. oh wait. Saving the b.. no. Northern Irel.. ah.

Useless twat, Brown.

One of the world’s biggest credit ratings agencies said that Britain’s ongoing “weak economic environment” and Gordon Brown’s failure to properly reform the financial system had led to its unprecedented decision to “downgrade” Britain’s banks.

The warning from Standard & Poor’s sparked an immediate slump in the stock market and the value of the pound last night.

The international creditworthiness of the country’s banking system is now on a level which is equivalent to poorer countries such as Chile and Portugal.

Chile? FFS.

AJ

The double-dong dip awaits us…

So, in Q4, with all the feverish Xmas buying, the rush to buy tat before VAT returned to 17.5% AND an unseasonal upswing on property purchases, partly due to the end of the stamp duty holiday for buyers of matchboxes, the economy grew by – are you sitting down?

0.1%

Nought. Point. One. Poxy. Percent.

The 0.1 per cent growth in Gross Domestic Product (GDP) was much smaller than the 0.4 per cent widely expected, fuelling fears that a further “double dip” slip back into recession could be around the corner.

No. Shit.

Once again, I ask a simple question:

How come it takes 2 successive quarters of negative growth to enter recession, but only one quarter of growth to come out of it?

Call an election Gordon. Right fucking now.

AJ

P.S. As someone who, in Q4, bought a new car, a new TV, a PS3, and various woman related trinkets, you can’t say I’ve not done MY bit, you shitheads.

12 months later

Then

Harriet Harman, the women’s minister, said: “There is a major fear about women being targeted by their employers during the downturn. This is unlawful.” Another senior minister said women could be set back for “a generation”.

And now

Outside Hackney Jobcentre the drizzle lands on the pavement. Inside, two dozen men stab at computer screens, looking for the day’s offers.

There is nothing extraordinary here, in the depths of a recession – except the lack of women. “There’s nothing there to find,” said Muhammed Maih, 26, who has been in and out of catering and retail work since the start of the recession. “More women get admin work. I want something too. When it gets worse and worse, I’ll take whatever’s there.”

Mr Maih is only one of more than 1.5 million men out of work. The latest figures reveal that men are losing jobs at twice the rate of women, producing a crisis of a magnitude seen only once since the end of the Second World War. In the US it has already been given a name: now, the “mancession” is spreading to Britain.

Are you happy now, Harriet, you hatchet faced harridan?

AJ

UPDATE: Perhaps this helps to explain why..

A ComRes poll at the weekend for the Independent on Sunday – highlighted here by Labour List  – shows that the Tories are 20 points ahead among men but only six points among women.

Al Jahom: Adviser to the Bank of England Since 2010

Mervyn’s obviously been reading…

They will see their standard of living fall over the next two years as salary freezes and rising inflation eat into incomes, Mervyn King said.

“The patience of UK households is likely to be sorely tried over the next couple of years,” Mr King said, dashing hopes that Britain could recover quickly from the deepest slump in post-war history.

His comments are likely to infuriate Downing Street,

Hey – a sliver lining. Buy Nokia shares.

which had hoped to campaign in the election on having set Britain back on the road to prosperity.

LOL do what??? Jesus titty twisting Christ, have these people got some brass nerve or what??

Here’s a point though. If Labour had “hoped to campaign in the election on having set Britain back on the road to prosperity”, surely they’d HAVE to have the election after Q4 results, but before Q1 results, as I surmised here – i.e. before 23rd April.

Back to the point.

The remarks also included a warning of interest rate rises.

…

Inflation is now rising almost twice as quickly as average earnings and the figures do not reflect the recent end to the VAT tax cut. With consumers facing even higher prices as a result of rising VAT in January, CPI is likely to go well above 3 per cent in the coming months, Mr King suggested.

Meanwhile, workers have seen salaries contract at an unprecedented rate. Although unemployment has not risen as high as in previous slumps, this has been at the cost of a significant reduction in household pay, with many staff accepting pay cuts, or voluntarily working part-time, to hang on to their jobs.

Mr King said that, although the recession was soon likely to be over in technical terms “there is little scope for growth in real take-home pay, which may remain weak even as output recovers”.

“It is clear that inflation is likely to pick up markedly in the first half of this year, a message reinforced by this morning’s news that CPI inflation reached 2.9 per cent in December . . . the rise in VAT back to 17.5 per cent means that CPI inflation is likely to rise to over 3 per cent for a while, or even higher for even longer were energy prices or indirect taxes to increase further.”

Thanks Gordon. Thank everyone who voted Labour. Thanks to the PLP; the gutless fucks who allowed Gordon a coronation and unobstructed ascent to the helm, KNOWING that he wasn’t up to the job.

Give me strength.

AJ

Inflation

Perhaps your 1% pay rise didn’t look terribly bad when inflation was below 2%, especially as you’re still paying comically small interest payments on your mortgage, eh?

Well fucking pay attention.

The BoE’s nerves to be tested? My fucking nerves are being tested, you cunts. This year, in real terms, I’ll earn less than last year, and pay more tax. In the meantime, my company, while doing relatively well, is still forced to make savings, which means thin-slicing of benefits, rising targets, increasing workloads.

That’s three ways I’m getting fucked in 2010. I’m far from alone – you’re probably in the same boat. Potentially worse if you’re on a tracker mortgage.

The Speccie has more:

As Mark Bathgate and Fraser warned, the economic crisis now has an added dimension: inflation. The government’s preferred marker, the Consumer Prices Index (CPI) rose to 2.9 percent in December from 1.9 percent in November, which as Andrew Neil notes is the biggest monthly rise in the annual index since records began. And the Retail Prices Index (RPI), used to calculate welfare payments and wage re-negotiations, rose to 2.4 percent from 0.3 percent. The underlying RPI rate rose to 3.8 percent from 2.7 percent.

The VAT hike has stimulated inflation but there is more at work. We are now seeing the long-term effects of Quantitative Easing and the use of debt to finance further government borrowing. A consequence of printing money is to devalue it – hence the collapse in Sterling and ever more expensive imports, notably crude oil, a commodity which itself has doubled in price over 12 months. With no current plans to arrest government spending, the future looks miserable.

You know, between this and the unwarranted cuntogram I’ve just had from HMRC, I’m considering dropping out of the whole fucking rat race.

I fucking hate what these cunts have done to my country and the difficulty of simply ‘being’ in this country is wearing me down.

And if you’re thinking, “well it’s better than Haiti”, I’d invite you to go fuck yourself in the eye-socket with a rusty fork.

AJ

UPDATE: As ever, the excellent Wat Tyler provides sober, and indeed sobering, analysis.

RPI inflation has increased by the biggest monthly amount since 1979 – ie back amid the wreckage left by the last Labour government.

Here we go again

We’re right back to the inflation tax: anyone with a bank or building society savings account, and anyone with a private pension is going to get seriously whacked.

Care? As we’ve blogged many times (eg here) socialists hate savers. Savers constitute the rentier class living off the backs of the workers. They deserve whatever they get, right up to and including being stood up against the wall and shot.

Of course, the Bank of England – the guys who’ve actually implemented this madness – they’re supposed not to be socialists. In fact, if memory serves, there was once some vague idea that they’d be independent of government.

Even the New Statesman’s talking Double Dip now

I’ve talked a few times about the prospect of a Double-Dip recession.

The snow will have had a devastating effect on commerce over the last week or so, helping things none at all.

Now even the New Statesman acknowledges the scale of the problem we face:

Of course, Brown will be happy so long as Q4 shows growth, so that he can say he’s lead the country out of recession. Doesn’t matter then if it’s plunged back into recession shortly after the next election.

AJ

The shock.. the horror.. the Sherlock..

Ben Bernanke said that Mr Brown’s decision to strip the Bank of England of its supervisory role over banks had led to a “destructive run” and a “major problem for the British economy”.

The comments, made to the US Senate, are embarrassing for Mr Brown who has repeatedly refused to concede that his decisions as Chancellor may have contributed to Britain’s current economic problems.

The Federal Reserve chairman’s comments came after an official audit calculated that…

British taxpayers now face an £850 billion liability

… as a result of Government action to bail out the banks.

Britain has faced the highest bill of any major country in the world in dealing with the banks crisis.

Still. At least he didn’t go to Eton, eh? Nation-wrecking psycho-gollum motherfucker.

AJ

Labour Investment vs Tory cu.. uhh.. wait…

There’s something quite alarming here… do you see it? Let me help you.

Gordon Brown has made a last-minute demand for bigger cuts from Whitehall departments amid fears that Alistair Darling will fail to convince the markets that Britain can pay off its record debt.

Mr Darling is to admit next week that plunging tax receipts and a deeper than expected recession have increased borrowing this year beyond the forecast £175 billion.

But the Chancellor is to defy critics pushing for a speedier return to balancing the Government’s books, arguing that raising taxes or cutting spending any quicker than planned could endanger the recovery and damage the fabric of the country.

He plans to sprinkle Wednesday’s Pre-Budget Report with what officials call “signals of intent” to placate the financial markets. These are thought to include tax hikes aimed at richer voters, including a freeze in the threshold of inheritance tax.

Standby for weasel sentence of the year:

He will say that no area is immune from cuts but will identify key “outcomes”, particularly in health and education, that will be protected as Labour tries to set out its battle lines for the next election.

So what’ll it be? Tory cuts will cause 100,000 doctors and nurses to lose their jobs, and all teachers will need to give handjobs for crack, where as Labour’s cuts will do … what exactly? Save kittens?

Interesting.

AJ

Labour wreckers again…

So, for better or for worse, we the taxpayer own circa 75% of the Royal Bank of Scotland.

Much hoo-hah is underway about the matter of bonuses for the big boys at RBS.

Plenty has been written in support of these bonuses, which boils down to this: If you cap the bonuses, the best and brightest will bugger off elsewhere, where their earnings won’t be artificially limited. That will leave RBS without the skilled people required to get the bank back on its feet and viable again as a private business. We need RBS to be a viable business again ASAP, so we can sell it to make back the money of ours Gordon Brown threw at RBS last year.

And a bunch of thick lefty wreckers are launching a campaign to disrupt RBS’ retail banking business. You know – the side of the business that had FUCK ALL to do with the disastrous state of things.

And who would be at the helm of this fuckwittery? That coronary explosion in waiting, John Fucking Prescott.

Thick cunts. No doubt BevaniteEllie will be all over this bandwagon like a whore on an oligarchs lap.

AJ

UPDATE: Dungeekin has dun us proud once more.

Spain co-opted to G20 under emergency measures. Spain bemused.

A couple of weeks back, I relayed news from Guido that Britain was the only G7 country still in recession.

Well, now, we’ve gone one better – we’re the only country in the G20 still in recession.

Well, we were, until Gordon Brown drafted ailing Spain into the G20, so he wasn’t lonely. Obviously, Spain isn’t in the G20, as pointed out by Guido and Tory Bear, who may well have broken the news, which was picked up on by some senior Tories.

Guido has posted a video of Broon’s truly pathetic splutterings:

In keeping with today’s sickly climate of victimhood and apology madness, the Tories have stepped up to the plate:

As Guido notes from this article,

The Tories have unearthed a quote that should settle the matter, ‘Spain is not a member of the G20’, or so said the Prime Mentalist himself at a press conference in October last year.

I appreciate the Tories slapping Brown, but I do wish they’d frame it in rather more grown-up terms.

AJ

More fuel for the double-dip fire…

Not uniquely amongst bloggists, in my capacity as armchair economist I have predicted that the UK economy, even if it grows in Q4 2009, will contract again in Q1 2010.

The first ingredient added to my conjecture was evidence of a Q4 consumer boom based on ill-founded optimism.

The other thing I should have mentioned at that time was that VAT goes back up to 17.5% on January 1st 2010. If we are to believe the evidence suggesting that the reduction to 15% boosted the economy, why would we not also conclude that the increase will damage the economy, which is really in no better shape than it was 12 months ago?

This week, in the wake of Gordo handing them the kiss of death, Dubai’s national corporation look to be in trouble, unable to pay the interest (never mind repaying the fucking capital!) on their $60BILLION debt.

I have written previously about why I dislike Dubai – basically because it’s a society based on Islamist principles, that has somehow managed to gull thousands of westerners into thinking they’ll be just fine and don’t need to worry about the appalling and atavistic justice system that exists in Dubai.

Alas, my instinctive schadenfreude is pissed all over when I read this:

Which means that we’re going to get reamed again, and the already infinitesimal chances of my RBS shares ever recovering are now so small that even the LHC won’t fucking find them.

Oh well. Eat, drink and be merry, for tomorrow we face penury.

Fucking socialists.

AJ

Brown’s Britain leading the way out of recession. Not.

Obliged to Guido for this handy illustration of the UK’s relative economic performance in Q3 2009:

Which means that Britain [is the] Only G7 Nation Still in Recession.

Go Gordon, go.

AJ

Jahomstradamus’ pre-requisites for the double dip. Part 1…

One piece just started to fall into place… this is from October 25th 2009:

For the nation as a whole, it has been a year of shitty news on the economy, hectoring from the state about every damned thing we do, utter desperation about the state of education, the NHS, justice, law & order and the ghastly corruption, venality and greed of our elected ‘representatives’. Faith in democracy is draining away. People are fucking pissed off. Depressed. Deprived of joy.

In the meantime, a bunch of people have moved onto tracker mortgages at tasty rates, freeing up disposable income (but not for paying down capital, natch).

In this society, many people acquire and consume goods as an abstract pursuit. An end in itself, which satiates psychological needs imbued by aggressive and invasive advertising. Tis a given, right?

These factors combined with the continuing availability of (not cheap) credit cards will fuel a Christmas consumer binge. We know that much of the economic growth in the last 10 years has been driven by insane consumerism. This binge will drag the economy back on to an upward trajectory. But only for Q4 ‘09.

In January, we’ll all sober up from our binge, open our bank statements and discover we’re gonna have to eat tinned beans on Tesco value toast until payday.

At which point the economy falls back into diminution.

Today in the Times:

Are you optimistic? Or are you spending to numb the pain and face the consequences later?

Today’s poll will boost government hopes that voters may be feeling more positive by the time of the general election next spring. It shows that the number of voters thinking the country as a whole will do well over the next year has risen from a quarter to a third since July and is now the highest since April 2008.

But nearly two thirds still think that the country will do badly over the next year.

So, 65% think we’re still gonna be fucked for the next year. And yet:

Its findings come as the best October high street sales for seven years have fuelled hopes that a pre-Christmas surge in spending could confirm the country’s emergence from recession.

Hmmmm… with this in mind, I think my reasoning for a predicted election date of 8th April is looking more solid.

AJ

Timing of the next general election…

So, we’ve had Q3 GDP results around 23rd October. The (as below) inflated Q4 figures will, I suppose appear around 23th Jan 2010. These should be (falsely) encouraging. I expect Gordo anticipates this will be a good (least worst) time to be launching an election campaign.

If I’m right about the negative results likely in Q1 2010, these will appear around 23rd April 2010. But by then, we’ll have long since had enough corporate Q1 results to know that things are grim.

So Gordo’s window for launching a campaign and holding an election is from 23rd January until roughly 15th April (year end returns will be known for a lot of firms) when corporate results start seeping out prior to full ONS GDP results on 23rd April.

So, announce an election, and launch a campaign on 25th Jan. ‘Good’ economic news from Q4 gets Gordo off to a (falsely) encouraging start. He’ll be planning as long and tortuous a campaign as possible, because he’ll want maximum opportunities for the Dib Lems and Blue Labour to fuck up. As I’ve said before, Gordo really has nothing to lose.

All these things considered, I reckon if Gordo remains in charge, we’re looking at an 8th April election.

We shall see.

AJ

Dip once in the ass, and once in the mouth…

Murmurings abound about a ‘double dip’ recession.

Recent economic figures caused much consternation, if little surprise.

Now, Brown’s saying we’ll be back in growth by the end of 2009:

And here’s where the much anticipated double dip will enter it’s second phase of decline.

For the nation as a whole, it has been a year of shitty news on the economy, hectoring from the state about every damned thing we do, utter desperation about the state of education, the NHS, justice, law & order and the ghastly corruption, venality and greed of our elected ‘representatives’. Faith in democracy is draining away. People are fucking pissed off. Depressed. Deprived of joy.

In the meantime, a bunch of people have moved onto tracker mortgages at tasty rates, freeing up disposable income (but not for paying down capital, natch).

In this society, many people acquire and consume goods as an abstract pursuit. An end in itself, which satiates psychological needs imbued by aggressive and invasive advertising. Tis a given, right?

These factors combined with the continuing availability of (not cheap) credit cards will fuel a Christmas consumer binge. We know that much of the economic growth in the last 10 years has been driven by insane consumerism. This binge will drag the economy back on to an upward trajectory. But only for Q4 ‘09.

In January, we’ll all sober up from our binge, open our bank statements and discover we’re gonna have to eat tinned beans on Tesco value toast until payday.

At which point the economy falls back into diminution. Brown’s getting on with the job of taking the tough decisions and, wait.. what?  just fuck off, you shameful bunch of nation-wrecking cunts.

Oh and it wouldn’t be the first time Gordo’s economic snake-oil has given us a W-shaped graph.

Although now that I think about it, rather than a W, it looks like a pair of tits, doesn’t it?

AJ

Let the bad times roll…

Brown’s already been talking about “Labour economic recovery.”

Ho hum.

AJ

Errr.. WHAT?

Now, I’ve not been on the banker-bashing-bandwagon, being as it’s mostly been a matter of envy and class prejudice, but check this shit out…

Do what now?…

I really don’t believe what I’m reading. I’ll comment further when I’ve gathered my thoughts and cleared all the coffee off my laptop.

Fuck.

AJ