Yesterday I wrote that "Bush has done to the US economy what no terrorist or hostile country could ever do, that's quite a legacy!"
I was wrong, Bush merely loaded the gun; Congress, in an act of collective madness, has in effect destroyed the US economy by voting against the bailout plan.
Given that the plan was the only one on the table, one might ask why they jettisoned their only hope. Regrettably partisan politics outweighed commonsense and selflessness, as the Republicans used a speech by Nancy Pelosi (seemingly she hurt their feelings) as their excuse for voting "nay".
The result of this collective madness was entirely predictable, Wall Street suffered its worst ever one day fall in history (down 778 points).
The essential truth that those who cite "moral hazard" fail to grasp is this.
If your neighbour's house is buring down, even if he started the fire himself, you do not stand idly by watching it burn; you try to put it out.
Once the fire is out, you can punish him afterwards.
The "good people" in Congress will have a lot of explaining to do, when their constituents realise that falling shares mean that their savings and pension plans are going down the toilet.
Thursday is now slated for a rerun of the vote, let us trust that some commonsense now enters the minds of Congress.
Tuesday, September 30, 2008
Monday, September 29, 2008
The Great Bailout
US President George Bush has said that Democrats and Republicans will come together to pass the bailout plan to rescue the US economy.
All well and good, if what he says actually comes to pass. However, the bailout was never a matter of merely throwing billions at the problem to make it go away but of injecting confidence into the economy.
The bailout plan had the possibility of working, until it became apparent that Paulson in fact had no plan and McCain pushed himself in front of the cameras in a bid to appear as a dealmaker (thus wrecking any possibility of th deal being passed last week).
Bush then publicly said that the world economy was in gave danger if the plan was not approved, and privately said during the disastrous McCain inspired meeting that "this sucker is going to go down". Paulson, pouring petrol on the flames, then got down on bended knee to Nancy Pelosi (House Speaker) begging her to pass the bill.
Those actions and words send a very clear signal that those in office are not in power. No matter how many billions of dollars are now thrown at this issue the markets have had the confidence kicked away from beneath them by the failed leadership in Washington, and the desire of a very old angry man to become president.
The road ahead is uncharted and dangerous. Bush has done to the US economy what no terrorist or hostile country could ever do, that's quite a legacy!
All well and good, if what he says actually comes to pass. However, the bailout was never a matter of merely throwing billions at the problem to make it go away but of injecting confidence into the economy.
The bailout plan had the possibility of working, until it became apparent that Paulson in fact had no plan and McCain pushed himself in front of the cameras in a bid to appear as a dealmaker (thus wrecking any possibility of th deal being passed last week).
Bush then publicly said that the world economy was in gave danger if the plan was not approved, and privately said during the disastrous McCain inspired meeting that "this sucker is going to go down". Paulson, pouring petrol on the flames, then got down on bended knee to Nancy Pelosi (House Speaker) begging her to pass the bill.
Those actions and words send a very clear signal that those in office are not in power. No matter how many billions of dollars are now thrown at this issue the markets have had the confidence kicked away from beneath them by the failed leadership in Washington, and the desire of a very old angry man to become president.
The road ahead is uncharted and dangerous. Bush has done to the US economy what no terrorist or hostile country could ever do, that's quite a legacy!
Thursday, September 25, 2008
Time Running Out For Bradford and Bingley
Bradford and Bingley have announced that their mortgage processing centre in Borehamwood, Hertfordshire, is to be closed and the 300 staff made redundant.
It seems that it does not have a future as an independent business, its credit rating has now been cut to one notch above "junk".
The Financial Services Authority is trying to find a buyer for the bank, in order to avoid another Northern Rock fiasco.
It seems that it does not have a future as an independent business, its credit rating has now been cut to one notch above "junk".
The Financial Services Authority is trying to find a buyer for the bank, in order to avoid another Northern Rock fiasco.
Wednesday, September 24, 2008
FBI Investigation
The Times reports that the FBI is investigating a number of executives from Fannie Mae, Freddie Mac, Lehman Brothers and AIG.
The Times states that are investigating as to whether the executives lied to shareholders, and whether fraud helped caused some of the troubles at these organisation.
The investigation includes whether executives deliberately misled the stock market about the state of their businesses.
Needless to say the politicians who oppose the $700BN Paulson bailout have latched onto this as another reason not to give money to greedy Wall Street bankers.
All well and good.
However, moral hazard and regulation can be addressed after the crisis has been dealt with.
When your neighbour's house catches fire (even if he started it deliberately) you do not stand idly by watching it burn (remonstrating with him about his stupidity), you help him put it out.
Another point that those who hate greedy bankers should remember is this, people were happy enough to borrow the money when it was cheap and to saddle themselves with debt; no one put a gun to their heads.
The Times states that are investigating as to whether the executives lied to shareholders, and whether fraud helped caused some of the troubles at these organisation.
The investigation includes whether executives deliberately misled the stock market about the state of their businesses.
Needless to say the politicians who oppose the $700BN Paulson bailout have latched onto this as another reason not to give money to greedy Wall Street bankers.
All well and good.
However, moral hazard and regulation can be addressed after the crisis has been dealt with.
When your neighbour's house catches fire (even if he started it deliberately) you do not stand idly by watching it burn (remonstrating with him about his stupidity), you help him put it out.
Another point that those who hate greedy bankers should remember is this, people were happy enough to borrow the money when it was cheap and to saddle themselves with debt; no one put a gun to their heads.
Tuesday, September 23, 2008
The Dead Cat Bounce II
Lats week I wrote about the rebound in shares, in response to the US bailout of the financial system, being a "dead cat bounce".
It would seem that I was right.
Shares in London and Asia have fallen sharply, as doubts grow about whether the $700BN bailout will work. At the time of writing:
-The FTSE is down 2%
-The CAC down over 1%
-The MSCI index of Asia-Pacific shares (excluding Japan) down 2%
-The Dow down over 3%
The package proposed by Henry Paulson, US Treasury Secretary, is expected to face opposition from members of Congress about how to pay for the plan.
Additionally, other American industries outside Wall Street have begun to ask for similar assistance; eg bans on short-selling have been requested by car and real estate companies.
Senator Richard Shelby, the leading Republican on the Senate Committee on Banking, Housing and Urban Affairs, said in a statement yesterday that the proposal was "neither workable nor comprehensive".
"I am concerned that the Treasury's proposal is neither workable nor comprehensive, despite its enormous price tag. In my judgment, it would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted, and may actually cause the Government to revert to an inadequate strategy of ad hoc bailouts.
Given that markets have recently taken confidence in the prospect of government involvement, I believe Congress must immediately undertake a comprehensive, public examination of the problem and alternative solutions rather than swiftly pass the current plan with minimal changes or discussion. We owe the American taxpayer no less."
That is all very well, but the issue is one of confidence. A lengthy review will sap the confidence and destroy the financial system before any "cure" is discovered.
I noted last week:
"The actions taken may well soften the blow from the fallout of the sub prime crisis. However, the market cannot be bucked. There is a massive repricing of risk being undertaken which will negatively impact the share prices of financial institutions and, by definition, their willingness and ability to take on risk.
No matter what governments do this repricing will happen and the effects will be felt by everyone, from the CEOs of the leading banks to the ordinary man in the street seeking credit to buy a car or home.
The market will not be bucked. The surge in share prices is in effect a dead cat bounce, not a long term rally."
The bailout will not stop shares falling, but it will stop the world wide financial system from collapsing by giving it a much needed boost of confidence.
Testing times require bold measures.
Now is not the time for dithering and navel gazing.
It would seem that I was right.
Shares in London and Asia have fallen sharply, as doubts grow about whether the $700BN bailout will work. At the time of writing:
-The FTSE is down 2%
-The CAC down over 1%
-The MSCI index of Asia-Pacific shares (excluding Japan) down 2%
-The Dow down over 3%
The package proposed by Henry Paulson, US Treasury Secretary, is expected to face opposition from members of Congress about how to pay for the plan.
Additionally, other American industries outside Wall Street have begun to ask for similar assistance; eg bans on short-selling have been requested by car and real estate companies.
Senator Richard Shelby, the leading Republican on the Senate Committee on Banking, Housing and Urban Affairs, said in a statement yesterday that the proposal was "neither workable nor comprehensive".
"I am concerned that the Treasury's proposal is neither workable nor comprehensive, despite its enormous price tag. In my judgment, it would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted, and may actually cause the Government to revert to an inadequate strategy of ad hoc bailouts.
Given that markets have recently taken confidence in the prospect of government involvement, I believe Congress must immediately undertake a comprehensive, public examination of the problem and alternative solutions rather than swiftly pass the current plan with minimal changes or discussion. We owe the American taxpayer no less."
That is all very well, but the issue is one of confidence. A lengthy review will sap the confidence and destroy the financial system before any "cure" is discovered.
I noted last week:
"The actions taken may well soften the blow from the fallout of the sub prime crisis. However, the market cannot be bucked. There is a massive repricing of risk being undertaken which will negatively impact the share prices of financial institutions and, by definition, their willingness and ability to take on risk.
No matter what governments do this repricing will happen and the effects will be felt by everyone, from the CEOs of the leading banks to the ordinary man in the street seeking credit to buy a car or home.
The market will not be bucked. The surge in share prices is in effect a dead cat bounce, not a long term rally."
The bailout will not stop shares falling, but it will stop the world wide financial system from collapsing by giving it a much needed boost of confidence.
Testing times require bold measures.
Now is not the time for dithering and navel gazing.
Monday, September 22, 2008
No New Taxes
The Times reports that Alistair Darling has pledged that there will be no tax increases, despite the fact that Britain may have to borrow £90BN next year.
The Chancellor said people were "hard pressed" and it was not time to be "taking money out of the economy".
Where will the money come from then?
The Chancellor said people were "hard pressed" and it was not time to be "taking money out of the economy".
Where will the money come from then?
Friday, September 19, 2008
The Dead Cat Bounce
Share prices are surging today on reports of a massive bailout of toxic debt by the US government, coupled with the ban by the FSA on short selling of financial stocks.
At the time of writing, the FTSE is up over 7%, the DAX up by almost 4% and the CAC up by 6%.
Talks are being held between the US Treasury Department and the Federal Reserve to examine proposals to move illiquid toxic assets, backed by mortgage debt into a government backed vehicle; ie they will be taken out of the balance sheets of the banks and financial institutions that created them.
In the event that this this scheme is put into action, this will be the largest bailout in American history.
The actions taken may well soften the blow from the fallout of the sub prime crisis. However, the market cannot be bucked. There is a massive repricing of risk being undertaken which will negatively impact the share prices of financial institutions and, by definition, their willingness and ability to take on risk.
No matter what governments do this repricing will happen and the effects will be felt by everyone, from the CEOs of the leading banks to the ordinary man in the street seeking credit to buy a car or home.
The market will not be bucked. The surge in share prices is in effect a dead cat bounce, not a long term rally.
At the time of writing, the FTSE is up over 7%, the DAX up by almost 4% and the CAC up by 6%.
Talks are being held between the US Treasury Department and the Federal Reserve to examine proposals to move illiquid toxic assets, backed by mortgage debt into a government backed vehicle; ie they will be taken out of the balance sheets of the banks and financial institutions that created them.
In the event that this this scheme is put into action, this will be the largest bailout in American history.
The actions taken may well soften the blow from the fallout of the sub prime crisis. However, the market cannot be bucked. There is a massive repricing of risk being undertaken which will negatively impact the share prices of financial institutions and, by definition, their willingness and ability to take on risk.
No matter what governments do this repricing will happen and the effects will be felt by everyone, from the CEOs of the leading banks to the ordinary man in the street seeking credit to buy a car or home.
The market will not be bucked. The surge in share prices is in effect a dead cat bounce, not a long term rally.
Thursday, September 18, 2008
Emergency Aid
The world's leading central banks, including the Bank of England, have joined forces and injected approximately £100BN into the world's financial system.
The action is US funded, whereby the US Federal Reserve is lending the Bank of England, the European Central Bank (ECB), the Swiss National Bank and the central banks of Canada and Japan the money to pump into their financial systems.
The question is, given that the US government allowed Lehman Brothers to go to the wall on Monday, will this restore confidence into the system?
The action is US funded, whereby the US Federal Reserve is lending the Bank of England, the European Central Bank (ECB), the Swiss National Bank and the central banks of Canada and Japan the money to pump into their financial systems.
The question is, given that the US government allowed Lehman Brothers to go to the wall on Monday, will this restore confidence into the system?
Wednesday, September 17, 2008
The Law of The Jungle
The death of Lehman Brothers has not sated the market's appetite for fresh corpses.
AIG teetered on the brink and has been bailed out, at the eleventh hour, after the US Federal Reserve agreed an $85BN bailout of the company. The deal gives the US Government a 79.9% stake, ie they nationalised it.
Somewhat ironic that the world's leading advocate of free market economics resorts to old fashioned socialist policies of nationalisation, in order to save a capitalist institution.
Now comes the turn of HBOS.
The Times reports that Lloyds TSB is in advanced talks to buy HBOS.
The disclosure followed a statement issued by the Financial Services Authority (FSA) about the strength of HBOS' business, in order to stop the 50% freefall in its share price.
Quote:
"Since the beginning of the current extreme difficulties in the financial markets, the Financial Services Authority has worked intensively with all major UK banks to ensure they have credible capital and liquidity plans.
We are satisfied that HBOS is a well-capitalised bank that continues to fund its business in a satisfactory way".
How can seemingly impregnable institutions find themselves so quickly consigned to the dustbin of history?
Confidence.
The capitalist system and banks rely on confidence in the future; when that dissipates, the bedrock on which the system and its constituent parts is based collapses.
Fear, rather than fundamental weaknesses, are eating away at the bedrock of our financial institutions.
AIG teetered on the brink and has been bailed out, at the eleventh hour, after the US Federal Reserve agreed an $85BN bailout of the company. The deal gives the US Government a 79.9% stake, ie they nationalised it.
Somewhat ironic that the world's leading advocate of free market economics resorts to old fashioned socialist policies of nationalisation, in order to save a capitalist institution.
Now comes the turn of HBOS.
The Times reports that Lloyds TSB is in advanced talks to buy HBOS.
The disclosure followed a statement issued by the Financial Services Authority (FSA) about the strength of HBOS' business, in order to stop the 50% freefall in its share price.
Quote:
"Since the beginning of the current extreme difficulties in the financial markets, the Financial Services Authority has worked intensively with all major UK banks to ensure they have credible capital and liquidity plans.
We are satisfied that HBOS is a well-capitalised bank that continues to fund its business in a satisfactory way".
How can seemingly impregnable institutions find themselves so quickly consigned to the dustbin of history?
Confidence.
The capitalist system and banks rely on confidence in the future; when that dissipates, the bedrock on which the system and its constituent parts is based collapses.
Fear, rather than fundamental weaknesses, are eating away at the bedrock of our financial institutions.
Monday, September 15, 2008
Lehman Collapses
In case anyone has not heard, the Wall Street bank Lehman Brothers has filed for chapter 11 bankruptcy protection, after emergency talks to find a buyer failed.
Lehman Brothers was one of Wall Street's biggest dealers in fixed interest trading, and was heavily invested in securities linked to the US sub prime mortgage market.
The FTSE has fallen 3% on the news. The effect that it will have on UK banks remains to be seen, and will depend very much on their exposure to it.
Lehman Brothers was one of Wall Street's biggest dealers in fixed interest trading, and was heavily invested in securities linked to the US sub prime mortgage market.
The FTSE has fallen 3% on the news. The effect that it will have on UK banks remains to be seen, and will depend very much on their exposure to it.
Tuesday, September 09, 2008
London's Reputation Tarnished
London's reputation as the world's leading financial centre was further tarnished yesterday when the London Stock Exchange suffered its worst systems failure in eight years, forcing it to suspend trading for seven hours.
To add to the woes of those trying to trade yesterday the crash happened on what would have been one of the busiest days of the year, hot on the heels of the news over the weekend that Fannie Mae and Freddie Mac had been bailed out.
A cynic might argue that the system was deliberately shut down, so as to avoid a massive spike in bank shares occurring.
Reuters quoted one trader as saying:
"We have the biggest takeover in the history of the known world ... and then we can't trade. It's terrible."
Another said:
"This halt today clearly has once again damaged (the LSE's) reputation as a leading exchange, especially on a day like today, highlighting that it may have been unable to handle the volumes this morning."
The LSE have not given an explanation for the crash, traders though are demanding an explanation.
LSE Chief Executive Clara Furse wrote to the FT on Monday, somewhat ironically, and said that the system used by the LSE was "the cutting edge".
This is just one of a string of issues that has tarnished the City's reputation. Other include; the endowment scandal, fat cat bonuses for failed executives, Northern Rock, excess bank and credit card charges, the mortgage drought, mis-selling of mortgages, PPI mis-selling etc.
The great and the good of the City should bear in mind that reputations are hard to earn, but easy to lose.
To add to the woes of those trying to trade yesterday the crash happened on what would have been one of the busiest days of the year, hot on the heels of the news over the weekend that Fannie Mae and Freddie Mac had been bailed out.
A cynic might argue that the system was deliberately shut down, so as to avoid a massive spike in bank shares occurring.
Reuters quoted one trader as saying:
"We have the biggest takeover in the history of the known world ... and then we can't trade. It's terrible."
Another said:
"This halt today clearly has once again damaged (the LSE's) reputation as a leading exchange, especially on a day like today, highlighting that it may have been unable to handle the volumes this morning."
The LSE have not given an explanation for the crash, traders though are demanding an explanation.
LSE Chief Executive Clara Furse wrote to the FT on Monday, somewhat ironically, and said that the system used by the LSE was "the cutting edge".
This is just one of a string of issues that has tarnished the City's reputation. Other include; the endowment scandal, fat cat bonuses for failed executives, Northern Rock, excess bank and credit card charges, the mortgage drought, mis-selling of mortgages, PPI mis-selling etc.
The great and the good of the City should bear in mind that reputations are hard to earn, but easy to lose.
Monday, September 08, 2008
Freddie and Fannie Balied Out
President Bush bailed out Freddie Mac and Fannie May yesterday, as he announced that the two mortgage lenders would be taken over by the US government.
Seemingly they were weeks away from collapse.
President George Bush is quoted in The Times as saying that the failure of Freddie or Fannie would have been "unacceptable".
"Allowing the companies to fail or further deteriorate would damage our home mortgage market, and could weaken other credit markets that are unrelated directly to housing.
Americans should be confident that the actions taken today will strengthen our ability to weather the housing correction and are critical to returning the economy to stronger sustained growth."
Henry Paulson, the US Treasury Secretary, said:
"A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit.
Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe."
This robust and decisive action contrasts with the dithering of the British government last year, when faced with the Northern Rock fiasco.
British banks have invested billions into bonds insured by Freddie and Fannie, had they collapsed the banks would have made significant losses.
We can breath a short sigh of relief, and be thankful that the US government did not shy away from a tough decision or dither over it.
Gordon Brown take note!
Seemingly they were weeks away from collapse.
President George Bush is quoted in The Times as saying that the failure of Freddie or Fannie would have been "unacceptable".
"Allowing the companies to fail or further deteriorate would damage our home mortgage market, and could weaken other credit markets that are unrelated directly to housing.
Americans should be confident that the actions taken today will strengthen our ability to weather the housing correction and are critical to returning the economy to stronger sustained growth."
Henry Paulson, the US Treasury Secretary, said:
"A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit.
Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe."
This robust and decisive action contrasts with the dithering of the British government last year, when faced with the Northern Rock fiasco.
British banks have invested billions into bonds insured by Freddie and Fannie, had they collapsed the banks would have made significant losses.
We can breath a short sigh of relief, and be thankful that the US government did not shy away from a tough decision or dither over it.
Gordon Brown take note!
Thursday, September 04, 2008
Decision Day
In less than an hour the Bank of England Monetary Policy Committee will announce their decision about interest rates.
Most pundits expect them to remain unchanged. However, the decision comes against the backdrop of Darling's suicidal warning about the state of the economy over the weekend, the announcement by the OECD that we are facing recession, Brown's ineffectual economic revival package and figures released by the Halifax that show that house prices fell by 12.7% in the year to August.
Given the above, one wonders quite how bad things must become before the MPC is prompted to cutting rates.
If and when they do, it might be the time to really panic!
Most pundits expect them to remain unchanged. However, the decision comes against the backdrop of Darling's suicidal warning about the state of the economy over the weekend, the announcement by the OECD that we are facing recession, Brown's ineffectual economic revival package and figures released by the Halifax that show that house prices fell by 12.7% in the year to August.
Given the above, one wonders quite how bad things must become before the MPC is prompted to cutting rates.
If and when they do, it might be the time to really panic!
Wednesday, September 03, 2008
Careless Talk Costs Cents
Alistair Darling is learning the lessons that previous Labour Chancellors have learned, namely that careless talk costs the pound dear.
Sterling continued on its downward path today, falling to a 12 year low (88.2) against the Bank of England trade weighted index of currencies and to its lowest against the dollar ($1.7669) since April 2006.
The fall has been attributed, not unsurprisingly, to Darling's outburst over the weekend over the state of the economy.
The fact that he is now barely on speaking terms with his old "friend" Gordon Brown have given the markets little comfort, as divisions over policy and presentation between number 10 and number 11 mean that the economy will suffer.
Until Brown and Darling decide what the real story is, and what to do about it, the economy will continue to decline.
Sterling continued on its downward path today, falling to a 12 year low (88.2) against the Bank of England trade weighted index of currencies and to its lowest against the dollar ($1.7669) since April 2006.
The fall has been attributed, not unsurprisingly, to Darling's outburst over the weekend over the state of the economy.
The fact that he is now barely on speaking terms with his old "friend" Gordon Brown have given the markets little comfort, as divisions over policy and presentation between number 10 and number 11 mean that the economy will suffer.
Until Brown and Darling decide what the real story is, and what to do about it, the economy will continue to decline.
Tuesday, September 02, 2008
Pissing In The Ocean
The government, in a rather piss pathetic attempt to reanimate the corpse of the housing market, has announced that it will exempt properties worth less than £175,000 from stamp duty (the current exemption is £125K).
Given that the average house price in the UK is around £200K, this will have next to little effect.
Additionally, statistics show that the number of property deals that are already exempt from stamp duty has fallen almost as much as those liable for the tax; in other words the exemption is irrelevant.
The fundamental issue facing prospective house buyers is the lack of mortgage funding, not so much shaving a few thousand pounds off the price. This measure does not address the liquidity issue in any shape or form, it is pissing in the ocean.
Given that the average house price in the UK is around £200K, this will have next to little effect.
Additionally, statistics show that the number of property deals that are already exempt from stamp duty has fallen almost as much as those liable for the tax; in other words the exemption is irrelevant.
The fundamental issue facing prospective house buyers is the lack of mortgage funding, not so much shaving a few thousand pounds off the price. This measure does not address the liquidity issue in any shape or form, it is pissing in the ocean.
Monday, September 01, 2008
Self Flagellation
The FT today asserts that Chancellor Darling's bizarre self flagellation over the weekend, when he stated that the UK economy is facing times as bad as any ever seen in the last 60 years, may in fact have been a tad overdone.
Quote:
"The chancellor also claimed this weekend that the economic times facing Britain were arguably the worst in 60 years. His precise meaning has been in dispute but it would certainly be nonsense to suggest the UK faces the worst downturn in six decades.
It is true that in specific areas – trust among financial institutions, in particular – the UK is in very bad shape by historical standards. But, more generally, the assertion is untrue."
I have to concur, quite why the Chancellor came out with this bizarre assertion remains to be clarified. There are a number of possibilities:
1 He knows he is about to be sacked, and wants to go out "with a bang".
2 He has given up and lost the plot.
3 He knows something about the economy that no one else, including other members of the Treasury or government, knows.
Whatever the real reason, it would be advisable for the government and Darling to get a grip; the economy, and the citizens of this country, are not best served by such public flagellation and rifts.
Quote:
"The chancellor also claimed this weekend that the economic times facing Britain were arguably the worst in 60 years. His precise meaning has been in dispute but it would certainly be nonsense to suggest the UK faces the worst downturn in six decades.
It is true that in specific areas – trust among financial institutions, in particular – the UK is in very bad shape by historical standards. But, more generally, the assertion is untrue."
I have to concur, quite why the Chancellor came out with this bizarre assertion remains to be clarified. There are a number of possibilities:
1 He knows he is about to be sacked, and wants to go out "with a bang".
2 He has given up and lost the plot.
3 He knows something about the economy that no one else, including other members of the Treasury or government, knows.
Whatever the real reason, it would be advisable for the government and Darling to get a grip; the economy, and the citizens of this country, are not best served by such public flagellation and rifts.
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