Election: Absolutely Disgusted

So, after a clear, but not decisive Tory victory and what seems like the minimum amount of negotiation Nick Clegg could get away with (and simultaneously courting Labour behind the scenes), Gordon Brown has been given the shove and we're now hearing about an oh-so-stable coalition of everyone-but-the-Tories to run the country.

That's "putting the national interest first", apparently. Welcome to the New Politics, same as the Old Politics.

So what can Labour, the Lib Dems, the Green Party, the SDLP, Alliance, Plaid Cymru and the SNP have in common? Other than a desire to shaft the English electorate to further their own individual agendas? With all 7 parties, and the DUP going with the Tories as usual, that's about a 10-seat majority - and 21 different internal squabbles as the Welsh fight the Scottish for more handouts, the Irish fight each other (if they can work together, why are there so many different parties?), the Greens demand the abolition of electricity against the wishes of everyone else in Parliament and the economy collapses under the weight of the spending commitments.

The announcements were made after the stock markets closed last night. Forex, which is 24/7, saw Sterling drop by over $0.01 against the dollar immediately. The FTSE100 opened this morning nearly 100 points (~2%) down, and is still down well over 1%. The markets clearly aren't enthused by this.

Reading the comments from Iain Dale's readers, the electorate aren't going to be happy with an alliance of the 2nd, 3rd, 5th, 7th, 8th, 9th and 10th parties scraping together to get enough seats to overpower the country's first choice to further their own agendas. That's not "democracy" by any stretch of the imagination, and I expect the second General Election this year will be a decisive rejection of all those putting narrow party interests in front of the country's interests that they claim to serve.

- KoW

What a hung parliament really means

Today's Metro (p5) has an article titled 'Hung vote' polls spark pound panic - which is only slightly different to the online version.

The pound has fallen from $1.60 to $1.48 in just a month. Two years ago, it was trading at $2.00. The stack of $20 bills on my desk, bought a little under a year ago, is now worth 12% more than I paid for them - even with the foreign ATM fees and the bid-offer spread, that's a healthy profit.

The falls would have been even worse if it weren't for the problems facing the Dollar (Obama's spending, particularly the healthcare issue) and the Euro (Greece...) - the Yen is now trading against Sterling at a rate I'd have expected for Dollars five years ago: 133¥ per!


That is the cost of Labour's fiscal policies and of quantitiative easing. We've lost 20-30% of the value of our money and Sterling-denominated assets.

We're all 20-30% poorer than we were a couple of years ago.

And the markets know that, and fear it continuing. A hung parliament with Labour as largest party is the worst of all possible outcomes: no power to make changes, and no desire to, either. Unless there is a clear Tory victory, we're about to become a third-world country. Yes, it is that bad. Guido has already noted that as has the FT. The bond markets are already pricing us as AA, even without a formal downgrade, and uncertainty could easily drive that to A+ or below. If the government can't borrow £180bn/year, it either has to slash and burn spending by something like 20-30%, or devalue Sterling by printing yet more money: we could have lost half of our wealth in just three years.

I predicted double-digit inflation at the start of the year (well, actually in November 2007), and the last month has added upwards of 7 percentage points to the cost of imported goods. Green beans from Kenya, Egyptian potatoes, Korean plasma/LCD TVs, German or Japanese cars, oil, gas, Brazilian "British" beef, all likely to be several percent more expensive this year than last. Prices are therefore going to be growing a lot faster than the feeble GDP recovery we're seeing: the dreaded stagflation of the 1970s.

The current war on bankers could well destroy 30% of GDP - so, around 60% of private-sector production, given our bloated public-sector - which would be crippling. As much as people might hate the banks, we simply cannot afford to lose them. The riots in Greece could, and probably would, happen here if the necessary public-sector cuts were forced (by market action) to be taken quickly - 2m jobs lost overnight, if a debt auction is refused.

Brown must go, it's that simple.

- KoW

February Snippets

A400M Saved

EADS has agreed a plan with European governments to save the A400M. This is a good thing as, even though C-17s are lovely and carry huge amounts (~170,000lbs), we can't afford more than half a dozen of them... which means that our air bridge might have lots of capacity, but not enough actual planes to use it. The A400M is half the size (~82,000lbs capacity) and half the price of the C-17, so the capacity is less "lumpy" - rather useful with our diverse commitments. We need something to replace the clapped-out C-130Ks and C-130Js - the Hercules was a fine aircraft, but the oddly-shaped cargo space and now rather small carrying ability means it's well past its sell-by date. The A400M will fill that role nicely, giving more lift into the bargain.

Plus, of course, keeping the ability to build large cargo transports is useful if we don't want to have to rely on the US.


Iceland bankruptcy

The Icelandic negotiators have walked away from meetings with the British and Dutch, refusing to pay anything above LIBOR on the €4bn Icesave debt. Since LIBOR measures short-term rates (various components from overnight to 1 year), Iceland is demanding long-term repayments below the yield curve - i.e. they want to turn their defaulted debt into a loan at below normal market rates.

Iceland is unable to access IMF cash until it reaches an agreement on repaying its debts, and - as the CityAM article notes - this walk-out is likely to result in their sovereign debt being downgraded by the ratings agencies. After all, if someone has just walked out on one obligation, wouldn't you want to charge a bigger risk premium to deal with them?


UK General Election

With Q4 GDP now revised to being +0.3% on Q3, and Labour closing the poll gap despite Bullygate, there is a lot of talk about whether the election will be called this weekend. This has to be at least 17 working days in advance, and a visit to the palace this weekend would mean a March 25th General Election.

I've got a bet on this, doubled since the GDP revision was announced, but we shall see. There are good reasons for a snap election - avoiding the Chilcot inquiry (and hence questions about how he slashed defence budgets and vetoed helicopter purchases), no need to present a Budget, the Q2 GDP figures (likely to show a double-dip from the VAT rise and snow hitting sales) won't be out until late April, and the tax rises on April 5th announced previously still won't have kicked in - but the Labour party is still skint and has to fight local elections on May 6th no matter when the general election happens. Plus there's Gordon Brown's personality - he "bottled" the 2007 election, and I don't think he's in any hurry to face the electorate. Could go either way.

My head says that it'll still be May 6th, but my heart says the election will be called this weekend.

- KoW

UK "Out of Recession"

The BBC has the story here - pre-announced as usual, but this quarter they got it right - by the smallest possible margin, 0.1% of GDP.

The article notes that this is weaker than estimates, is based on only 40% of the figures, and that the figures for every other quarter since 2007 have been significantly revised later - the previous figures changed by 0.2% of GDP from the initial release.

More to the point, the deficit is something like 130x greater than the margin of 'recovery': if the government weren't borrowing, and spending, £178bn/year then we would be much deeper in recession. In real terms, we still are, since this artificial "growth" is paid for by debt which will have to be repaid at some point.

Still, following Laura Kuenssberg's observation on the cabinet going in to Number 10 yesterday, this could well be the news that sends Gordon Brown to the Palace... if the figures are later revised down to 0.0% or negative, he's lost the "recovery" message to hammer the Tories with.

I don't know - and I'm not convinced it's worth worrying about the election date. The Tories have (some) policies and Labour are clapped out and engaging in nothing but bitter points-scoring. Whenever it happens, the outcome is likely to be the same...

- KoW

Austrian Physicist Demonstrates Explosives Smuggling

Seen in Metro this morning - not on their site though - but mentioned here and also in the original German (with video): "Full body scanners fail TV bomb demo". Says it all, really.

The German name - Nacktscanner (naked scanner) - is rather more appropriate name than "full body scanner". As if the metal detectors only scan your kneecap or something! "Full body" neglects to mention the fact that it's an imaging scanner, and is designed to penetrate clothes but not flesh.

As Ben Wallace MP has pointed out, and that video ably shows, these new technological (anti-)terrors are completely useless. Sure, they are claimed to have maybe a 60% chance of detecting explosives - though, is that a near-certain chance of detecting 60% of explosives, and no chance at all of detecting the rest? That would fit the physics better as objects aren't probabalistically visible, they're either visible or not. And if that were the case it'd be a real shame if the Bad Guys™ thought to use one of the undetectable types, wouldn't it? We'd have pissed away millions on completely worthless invasions of privacy... again...

- KoW

News in Brief

Lots happening today, so just a few short notes...

Rocking the Boat

Following on from the story yesterday evening, Geoff Hoon and Patricia Hewitt have sent out a letter calling for a secret ballot on Gordon Brown's premiership. There are claims that Charles Clarke is associated with it, and rumours that Harriet Harman might be behind it - as deputy PM, a leadership challenge would make her de facto Prime Minister for a few weeks. Haven't heard anyone reporting anything from the Milibands yet...


"I'm just big-boned"

Metro (p11) this morning - 'Bone risk to diet girls' - saying "Those with higher levels of fat tended to have larger and thicker bones, Bristol University scientists found". In other words, they've proven that a fattie/big-bones correlation exists, so we can expect to hear that line a lot more now that it's been scientifically proven.


DNA F-A-I-L

Metro (p12) this morning also has a story on the DNA database. It only helps in 1 case in 150. On burglaries - a crime characterised by the culprit having buggered off by the time the homeowner returns, so theoretically ideal for tracking technology like DNA or fingerprints - the database has less than 40% success. Shouldn't we be scrapping this huge, expensive, illegal mess and spending money on solving crimes?


Flav still 'fit and proper'

Flavio Briatore's lifetime ban from F1 has been overturned, so he can keep his QPR job, and he's been awarded a paltry £13,500 in compensation. The FIA says it will appeal but, now that Max Mosley has gone, does anyone really care? Bury it with the other scandals of the last decade and move on...


Monsters from the ID

Cambridge is to be used as a testing ground for ID cards for foreign nationals, according to David Howarth MP (h/t fanf). I wonder if this is designed to wind up the local NO2ID and security research people? Or to scare off world-class academics/scholars in an anti-elitist move? Or if it's just a conveniently large location sufficiently far from London that they can expect lower press scrutiny?


Also, it's snowing. Bet the 18:23 out of King's Cross is cancelled.

- KoW

Stabby!

Lord Mandelson has finally broken cover, and talked to the Evening Standard, sticking a knife squarely between the shoulder blades of Labour's election strategy. He's spot on in his comments - Old Labour, the core voters, could never win after 1979. And that core vote has been (literally) dying off for 30 years, and defecting to the BNP ("The Labour Party your grandparents voted for"). It brought to mind a quote (paraphrased) from Full Metal Jacket:

In strategic terms, Brown's cut the country in half... the mainstream media are about to wet their pants and we've heard even Mandelson's going to say the election is now unwinnable

The story mentions rumours of a cabinet resignation, and both Guido and the New Statesman (h/t Iain Dale) have identified the minister as Tessa Jowell.

Iain has commented on this, pointing out that Lord Mandelson is too politically astute to have attacked Labour's election strategy without a clear intention - but what that intention is remains a mystery. I doubt he would act alone, or be fooled into thinking it was Game On if there wasn't support - but I don't put it past him to invent a resignation rumour knowing that the press will pounce on every cabinet minister and ask them awkward questions about their loyalty.

The resignation rumour is probably false - anyone quitting the cabinet at this stage would be an utter disaster, and I expect all sorts of carrots and sticks have been applied to ensure it doesn't happen, no matter how unhappy anyone is. Plus, we've all seen the last episode of The Thick of It, and Malcolm Tucker's solution is probably as good as it gets.

Or perhaps that's the intent - rock the boat and hope it forces an early election? Before the budget, before the tax rises from the last budget (and PBR), before the Tories have prepared, and before No.10 can cock it up any further?

Who knows? But speculating is fun!

- KoW

The Pants Bomber

Catching up on a few things after the holidays. Well, this was the big story on Boxing Day, wasn't it?

To recap the facts as currently understood:

• A Nigerian man flew from Yemen to Amsterdam and then on to Detroit
• He had 80g of chemicals sewn into his underpants, possibly including PETN
• During the flight he tried to inject a liquid into the chemicals which, instead of exploding, caused a fire
• The fire was extinguished, the man was subdued and turned over to the authorities

Sounds like everything worked out OK, right? In fact, it bears out what people were saying about the liquid explosives plot: that you can't synthesise TATP on a plane because of the amount of cooling (e.g. ice) required. As soon as the reaction starts, it heats up and blows the reagents out of the container, ending the reaction. Oh, and the fact that aircraft designers try to ensure that their jets don't fall out of the skies when damaged - see the Aloha Airways jet that lost half of its fuselage, or the Qantas one holed by its oxygen tanks.

So, naturally, the TSA knee-jerked into banning passengers from using the on-board toilets - and then tried to crack down on whichever one of the thousands of people involved in implementing this policy leaked its details. Clearly it's vital for security reasons that passengers must be sat down and restrained, and not using a book or laptop, whilst pissing in their seats because they're not allowed to use the toilets.

Spotting a bandwagon and never shy of removing civil liberties from the proles, Gordon Brown has authorised the use of Naked Scanners at all UK airports. Never mind that they're completely ineffective against this threat, require the production (legally-speaking) of indecent images when used on minors, and will take even longer to use than the current useless measures... we're going to have them anyway. Fan-fucking-tastic, there's nothing I like more than getting up at 4am, so I can get to the airport 3 hours before my 10am flight due to the time it will take for the rent-a-plod to make an image of my cock.

And, you know what? The next time this happens, and there will be a "next time" because the world is full of bad people, the attacker will just have shoved the explosives up his arse and pulled them out in the toilets after going through the security theatre. Oops. The Naked Scanners and pat-downs don't detect that, you need a body cavity search. And if you start doing that, they'll find some other way - by the time a plot gets to the airport, it's too late to stop it.

But let's go back to the TSA for a moment. The agency charged with protecting US transport security cannot even take care of its memos. They have a track record of incompetence, and trying to invoke "national security" concerns to cover up that incompetence, and have a police state mentality which will - if unchecked - put the every US airline into Chapter 11 within a year.

Why don't they take lessons from real security agencies and accept the fact that since background checks and the most in-depth vetting procedures can't detect spies, devoting one-minute-per-passenger is about as effective as asking "Are you a terrorist?" at check-in. Probably less effective, in fact, as a good poker player would have a field day asking that question.

- KoW

Some you win, some you lose

Great news yesterday for Silverstone - a ten-year guaranteed British Grand Prix, in a contract lasting up to 17 years. It's costing them £12m in the first year, and Bernie Ecclestone got his escalator - rumoured to be a 5% increase per year - but not the 7% or even 10% he'd wanted. Seems fair enough - 5% is a pretty good rate these days, at least until hyperinflation kicks in.

Less great is p53 of this morning's Metro (story not online), with this photo:

Congratulations to Jenson for winning the trophy, less so for accepting Jonah's curse - my money is now firmly on Lewis Hamilton to be the McLaren victor (though I think Sebastian Vettel and Fernando Alonso have a good chance of the 2010 driver's title).

- KoW

With a hell of a shout, it's "Out, brothers, out!"

In South Yorkshire, fire crews are striking and so are the buses. The TFL Bully has quit - though I wonder if that's the last of that story, given that the RMT has averaged something like one strike ballot per working day this year. BA's flight crews are balloting for a strike. Three more days from the CWU posties.

Are there any groups of public sector workers who don't fancy a crack at "negotiating"? If When the government caves in, you can bet there'll be a lot more...

Still, at least there's no chance of another Sunny Jim - I think we're stuck with a Gloomy Gordon until next year.

- KoW

Are we depressed yet?

Alex comments on the BBC's volte-face (here to here) on the GDP predictions and makes an interesting point: a huge proportion of the GDP is government spending (from the £175bn-ish 2009 deficit), so the real economy is doing much worse. The BBC got the pre-announced figures but those were 60 basis points too high - a bit over £8bn (two weeks' deficit) of economic activity by my reckoning.

One thing I'd add, though: despite blowing £20m of borrowed money every hour, the government still isn't spending enough to rig the GDP figures.

The implication is that the deficit would need to be about half as big again, £260bn or so, to mask the decline in wealth creation. Of course, if they were able to borrow that much, they could give £30k/year to 2.8 million people... Hey, Gordon, I think I've solved the unemployment problem! (At least until the bailiffs arrive...)

- KoW

The Autumn of Wrath

The Summer of Rage is fashionably late, it seems, but it has started. The Autumn of Wrath is here.

Tory Bear hit the nail on the head. People are outraged about bank bonuses, MPs' expenses, postal strikes, the recession, lavish wasting of public funds, the police state, flagrant law-breaking by politicians, feral chavs... it's not being addressed, and it's spilling out in all directions - the Trafigura/Carter-Ruck gagging order, the TFL bully, Jan Moir...

Twitter is playing a large part simply because the news travels so quickly - assuming six degrees of separation and one minute to re-tweet, awareness of a story can cross the world in five minutes. The stories themselves are generally in the mainstream media, but there are no more "good days to bury bad news". The dead-tree press are, to their credit, reading the mood well and increasingly using online sources. The morning's Metro still feels like it contains two-day-old news - the same stories as the Lite and Evening Standard the night before, which were on the wire by breakfast - but it's still fresh to the majority of the population.

Predictions for the next few months? Nights are drawing in, and the recession is going to see cut-down xmas parties: people are going to be cold, wet and miserable, and will probably spend more time following the news. They'll have lots of time. Redundancies and strikes will dampen moods still further - I'm betting the RMT is out in London before xmas (possibly over the ponytailed git's "unfair" sacking), and RMT and/or ASLEF disrupting national rail wouldn't surprise me; the postal service is pretty much gone now as we've missed the union's "last posting day" for cards and presents. Other public services might strike as well - there are already signs, and they seem to feel they deserve job security and pay rises, which aren't on the cards.

It probably won't kick in until the quarterly bills arrive in January/February/March, but the price of energy is going to cause another blow-up when people realise just how much staying warm cost them in the winter - are you sure about those green energy subsidies, Mr Miliband?

While ever this lame-duck government remains in power, people are going to keep finding abuses of taxpayers' money, civil liberties, the law (particularly ironic when officials break any of the myriad new laws they've introduced in the last decade) and natural justice... and nothing is going to be done about them, which will only fuel the rage. A slap on the wrist here, a fine there, an apology, an inquiry - nothing.

The people of this country are metaphorically baying for blood... if these abuses continue long enough, that adverb will become "literally".

And I don't mean "OMG, I, like, literally died of shame!"... I mean literally.

- KoW

Robbing Peter to pay Paul

The BBC reports that TA training budgets have been cut, saving a pathetically small £20m.

For those who don't know, the Territorial Army's "weekend warriors" are already serving in Afghanistan, yet now those in the UK will have no training for the next six months. It's already been reported that general army fitness levels are insufficient for the hot-and-high environment of Afghanistan - ground altitudes in Helmand province can reach 10,000ft, where the air is noticeably thinner - and that some troops have arrived in theatre without ever having practiced with their weapons (particularly grenade launchers, but also rifles, as I understand).

There is one inevitable and, frankly, obvious outcome here: more British troops will be killed because training was cut back.

Gordon Brown can try to score points off General Dannatt in the press with beancounter quibbling over the precise numbers of troops in theatre, but the simple fact is that one cannot say that 7999 people isn't enough but 8000 is. It doesn't work like that. While a small force and a large one may both achieve the same goal in the end, the larger force will likely do it with fewer casualties. It therefore follows that we should not be fiddling around the exact number to deploy, we should deploy twice as many men and vehicles and do the job right.

- KoW