Alistair Campbell displays "weakness"

Just seen a clip of Alistair Campbell's "overcome by emotion" bit on Andrew Marr's show. Fake. No doubt. Wimped-out version of the Stanislavski Method: break eye contact, look down and to the right so the cameras can't drill into the gaze, puff out air, mild apology for allowing oneself to be momentarily overwhelmed. He's what he's always been, an aggressive second rater with a good little black book.

Britain's creditworthiness declines further

CMA have published their fourth quarter of 2009 report on the sovereign debt market, and the UK's implied credit rating has gone down further, to "AA". This now puts us in the same category as Italy, Spain and Portugal; of the "PIIGS" group of risky major Western European countries, only Greece and Ireland are in a worse position (and both of those have worsened considerably in the six months since Q2 of 2009).

The costly economic stimulus appears to be failing, from a longer perspective. Some think (see previous post) that the latest central bankers' meeting in Australia is in the nature of a secret emergency conference, despite having been planned last year.

Secrecy is worrying - I am somehow reminded of the closed session of the US House of Representatives Congress in March 2008 (only its sixth secret session in nearly 200 years). Ostensibly this was about anti-terrorist measures, but some of the conspiracy buzz this caused on the Internet turns out to have been justified in the light of subsequent developments.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Something's up: the bankers are gathering

Australian newspaper the Herald Sun reports on what looks like an emergency meeting of some of the world's most important bankers (hat-tip to the Contrarian Investors' Journal):

_______________________________

Secret summit of top bankers

THE world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.
Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.
Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies.
Speculation that the chairman of the US Federal Reserve, Dr Ben Bernanke, would make an appearance could not be confirmed last night.
The event will be dominated by Asian delegations and is expected to include governors of the Peoples Bank of China, the Bank of Japan and the Reserve Bank of India.
The arrival of the high-powered gathering coincided with a fresh meltdown on world sharemarkets, sparked by renewed concerns about global growth and sovereign debt.
Fears countries including Greece, Portugal, Spain and Dubai could default on debt repayments combined with disappointing US jobs data to spook investors.
Australia's ASX 200 slumped 2.4 per cent, to a its lowest close since November 5, echoing a sharp fall on Wall Street.
Asian share markets were also pummelled, with Japan's Nikkei 225 down almost 3 per cent and Hong Kong's Hang Seng slumping 3.3 per cent.
The damage was also being felt by European markets last night with London's FTSE 100 down sagging 1 per cent in early trade.
Sovereign debt fears rippled through to the Australian dollar which was hammered to a four-month low of US86.43 and was trading at US86.77 cents last night.
"This does feel like '08 and '07 all over again whereby we had these sort of little fires pop up and they are supposedly contained but in reality they are not quite contained,'' said H3 Global Advisors chief executive Andrew Kaleel.
"Dubai should have been an isolated incident and now we are seeing issues with Greece, Portugal and Spain.''
It wasn't all bad news with the RBA yesterday upping its Australian growth forecasts and flagging more interest rate rises this year.
The central bank estimates the economy grew 2 per cent in 2009, and will expand by 3.25 per cent in 2010, and by 3.5 per cent in 2011.
The outlook for global growth is likely to be a key theme of the high level central bank talks.
The gathering also comes at an important time for the BIS as it initiates an overhaul of the global banking system which will include new capital rules applying to banks and more stringent standards regulating executive pay.
A key part of the two-day talkfest will be a special meeting of Asian central bankers chaired by the governor of the Central Bank of Malaysia, Dr Zeti Akhtar Aziz.
Influential BIS general manager Jaime Caruana is also expected to take a prominent role in the talks.
Federal Treasurer Wayne Swan will address the central bank officials at a dinner on Monday night.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

A little humour

From David Colquhoun's excellent dcscience.net:

"VENTURE CAPITALISM – AN ICELANDIC CORPORATION

You have two cows.

You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.

The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.

The annual report says the company owns eight cows, with an option on one more.

You sell one cow to buy a new president of the United States, leaving you with nine cows.

No balance sheet provided with the release. The public then buys your bull."

UK housing still heavily overpriced?

Mike Shedlock discusses a recent international survey of housing affordability, and where the UK is concerned he notes:

Housing in the United Kingdom remains severely unaffordable, with a Median Multiple of 5.1, well above the historic maximum norm of 3.0.

This suggests that if prices returned to their long-term relationship with income, houses would lose 40%-plus of their current valuation. Yes, the housing market varies around the country, but "The United Kingdom had no affordable markets and no moderately unaffordable markets."

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Gold: NOT a no-brainer choice this time? The Chinese may not agree...

Australian blogger The Contrarian Investor points out differences between now and the 1930s that mean gold is merely another speculative investment, not the sure-fire winner it was then.

Having said that, there is a strong psychological / political / historical / economic strand in gold, and it is significant that central banks are now net purchasers. And China recently announced its intention to increase holdings from 1,000 tonnes to 6 or 10 times that over the next decade, having already boosted them from a level of 600 tonnes in 2003. China is now the world's largest producer of mined gold.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

The Brits are dumber than the Yanks; and Keynes will always beat Hayek

Shakespeare's plays imply a great deal about his audience, and so does the video below (hat-tip to Nathan Martin). I have not seen material like this made by and for the British market. Why not?

Economists are still warbling the lays of the free market, but I haven't seen them explain how Western prices and incomes can dwindle on the global market when our debt is huge and fixed. I think the best we can hope for is to manage our fall in average living standards, so that it happens more slowly.



DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.