As markets throughout the world plunge, on fears of another financial crisis, the blame for this can be laid full square at the feet of the politicians.
Those in the US who used the stage of Capitol Hill for their self serving antics over the debt ceiling and the "leaders" of Europe, who have behaved and bickered with crass stupidity, are equally to blame.
José Manuel Barroso, the inept President of the European Commission, publicly warned that Eurozone countries are failing to stop the “contagion” of the debt crisis. All very well, maybe. However, by publicly stating that, he needless to say spooked the markets.
To add to the feeling of panic, Italy publicly stated that China has told it that if the European Central Bank will not buy Italian debt, why should China?
I have to ask, by making this public, what exactly were the Italians thinking?
1 It spooks the market even more
2 It shows that they themselves are desperate, as clearly they are trying to offload their debt to all and sundry.
Add into the melting pot the fact the the "leaders" of Europe recently claimed, with self inflated pride, that they had "solved" the Eurozone crisis and that they had earned their holidays and you have a recipe for disaster.
Take all of the above together, and it is self evident that the blame for the current crisis can be attributed to the politicians. Politicians who clearly do not understand that markets are driven by primal instincts (fear, greed, euphoria and a pack mentality).
Until the politicians actually "get it", the crisis will continue and worsen.
Friday, August 05, 2011
Thursday, August 04, 2011
ECB Plays Canute
In an attempt to hold back the tides of the market, which will swamp a "nation too big to fail" (ie Italy), the ECB will reopen its purchases of government debt.
No matter what the ECB does, it will have little effect other than to postpone the day of reckoning. The Centre for Economics and Business Research has stated that Italy, with a debt equivalent to 120% of GDP, is on an unsustainable path and "bound to default".
Playing Canute by throwing money at the problem will simply not work, the markets know that there are fundamental problems with Euroland that can only be resolved once certain countries exit the Euro.
The fact the the leaders of Euroland thought that their recent "Hail Mary" was enough to resolve the issue, so that they could all go on holiday, shows how completely out of touch with reality they are.
No matter what the ECB does, it will have little effect other than to postpone the day of reckoning. The Centre for Economics and Business Research has stated that Italy, with a debt equivalent to 120% of GDP, is on an unsustainable path and "bound to default".
Playing Canute by throwing money at the problem will simply not work, the markets know that there are fundamental problems with Euroland that can only be resolved once certain countries exit the Euro.
The fact the the leaders of Euroland thought that their recent "Hail Mary" was enough to resolve the issue, so that they could all go on holiday, shows how completely out of touch with reality they are.
Wednesday, August 03, 2011
Playing Politics With People's Lives - Epilogue
The bill allowing the President to raise the US debt ceiling has finally been passed by both houses.
Crisis over?
No, the markets have reacted badly to the fall in US manufacturing and have been less than impressed with the political antics on Capitol Hill.
Whilst the politicians who brought about this crisis may feel smug and self satisfied, they should bear in mind that US creditor nations such as Russia and China will never trust them again to deal with economic issues such as this in a sensible and rational manner.
As such the long term prospects for the US economy, and Dollar as a reserve currency, are bleak; thanks to the selfish indulgences of the politicians on Capitol Hill.
Breaking News
China rating agency Dagong downgrades U.S. to A+ from A
And so it begins!
The politicians were warned!
Crisis over?
No, the markets have reacted badly to the fall in US manufacturing and have been less than impressed with the political antics on Capitol Hill.
Whilst the politicians who brought about this crisis may feel smug and self satisfied, they should bear in mind that US creditor nations such as Russia and China will never trust them again to deal with economic issues such as this in a sensible and rational manner.
As such the long term prospects for the US economy, and Dollar as a reserve currency, are bleak; thanks to the selfish indulgences of the politicians on Capitol Hill.
Breaking News
China rating agency Dagong downgrades U.S. to A+ from A
And so it begins!
The politicians were warned!
Tuesday, August 02, 2011
Playing Politics With People's Lives - Satan's Sandwich
I see that the politicians on Capitol Hill have just about managed to act with some commonsense at the eleventh hour, and have passed a bill in Congress that allows the debt ceiling to be raised. The Senate is due to vote today.
Neither "left wing" democrats, nor the swivel eyed of the Tea Party are happy with the compromise.
Representative Emanuel Cleaver (Democrat), said:
"This deal is a sugar-coated Satan sandwich. If you lift the bun, you will not like what you see."
The bill raises the debt ceiling by $2.4 trillion, which theoretically will allow the government to meet its debt obligations until 2013.
However, $1 trillion will be cut immediately from government spending, with a further $1.4 trillion to be agreed by the end of the year.
The markets, having briefly rallied, fell as they digested the news that US manufacturing has grown at its slowest pace in two years.
Whilst all this self indulgent nonsense has been going on, those with an eye for playing the markets will have done very well out of the rise in value of gold then, if they anticipated the vote in favour of a deal, the fall back in value of gold.
Let us trust that those politicians who played games over this issue were not some of those who played the gold markets!
Neither "left wing" democrats, nor the swivel eyed of the Tea Party are happy with the compromise.
Representative Emanuel Cleaver (Democrat), said:
"This deal is a sugar-coated Satan sandwich. If you lift the bun, you will not like what you see."
The bill raises the debt ceiling by $2.4 trillion, which theoretically will allow the government to meet its debt obligations until 2013.
However, $1 trillion will be cut immediately from government spending, with a further $1.4 trillion to be agreed by the end of the year.
The markets, having briefly rallied, fell as they digested the news that US manufacturing has grown at its slowest pace in two years.
Whilst all this self indulgent nonsense has been going on, those with an eye for playing the markets will have done very well out of the rise in value of gold then, if they anticipated the vote in favour of a deal, the fall back in value of gold.
Let us trust that those politicians who played games over this issue were not some of those who played the gold markets!
Monday, August 01, 2011
Playing Politics With People's Lives - Deadlock Resolved?
President Barack Obama claims that he has reached an agreement with Republican and Democratic congressional leaders, aimed at ending the US debt deadlock.
He has been on television and claimed victory.
However, there is an enormous caveat.
Reaching agreement with the leaders of both the Democrat and Republican parties does not in itself mean that the "swivel eyed" right or "loony" left factions within Congress will follow their leaders blindly down the path of compromise.
Given that the factions have taken the US, and the world, to the edge of financial chaos it is too early to claim victory for commonsense and compromise.
Ideologues do not give one jot for commonsense, or the needs of those whose who live in the real world.
As Obama warned:
"We are not done yet."
He has been on television and claimed victory.
However, there is an enormous caveat.
Reaching agreement with the leaders of both the Democrat and Republican parties does not in itself mean that the "swivel eyed" right or "loony" left factions within Congress will follow their leaders blindly down the path of compromise.
Given that the factions have taken the US, and the world, to the edge of financial chaos it is too early to claim victory for commonsense and compromise.
Ideologues do not give one jot for commonsense, or the needs of those whose who live in the real world.
As Obama warned:
"We are not done yet."
Friday, July 29, 2011
Playing Politics With People's Lives - Republicans Fail
With 96 hours left to raise the debt ceiling, and in a sense save the world economy, the Republican Party has failed to gain sufficient internal consensus to support its plan that was scheduled to be put before Congress yesterday.
The leader of the Republicans in the House of Representatives, John Boehner, has lost his political credibility as he failed to persuade the Tea Party faction to support him.
As such, the vote and plan have been abandoned and the markets have continued to fall.
Proof, if ever it were needed, that the politicians care more about partisan politics than people's lives.
The leader of the Republicans in the House of Representatives, John Boehner, has lost his political credibility as he failed to persuade the Tea Party faction to support him.
As such, the vote and plan have been abandoned and the markets have continued to fall.
Proof, if ever it were needed, that the politicians care more about partisan politics than people's lives.
The Greek Tragdey - The Irony!
Spanish government debt has been put on review for downgrade by Moody's.
For why?
It seems that the Greek bailout has increased risks for lenders to Spain.
Oh the irony!
For why?
It seems that the Greek bailout has increased risks for lenders to Spain.
Oh the irony!
Thursday, July 28, 2011
Playing Poltics With People's Lives
US politicians on Capitol Hill continue to play politics with people's lives, and as yet refuse to agree to raise the debt ceiling.
Ideology may give comfort to those who live and breath politics. However, the rest of the world needs a real job in order to feed and cloth itself. The damage being done to the world economy by the intransigence of the Prima Donna's on Capitol Hill is putting the livelihoods of millions at risk.
Irrespective of whether or not the debt ceiling is raised in time to avoid default, none of those involved in this disgrace deserve to be re-elected.
Ideology may give comfort to those who live and breath politics. However, the rest of the world needs a real job in order to feed and cloth itself. The damage being done to the world economy by the intransigence of the Prima Donna's on Capitol Hill is putting the livelihoods of millions at risk.
Irrespective of whether or not the debt ceiling is raised in time to avoid default, none of those involved in this disgrace deserve to be re-elected.
Wednesday, July 27, 2011
The British Gas Price Fix Offer
In the wake of the rather paltry £2.5M fine levied by Ofgem against British Gas failing consumers who complain (British Gas made operating profits of £585M for the first half of 2010).
Watch out for the nice little rip off they tried on my dear old mum recently.
British Gas offer to fix your prices until 2013.
Good offer?
No....you have to pay an extra 5% on top of their new standard tariffs if you wish to fix.
Also, "oddly enough", there is no mention of what happens if prices fall (even if that is unlikely). It seems the hapless customers lock themselves into a fixed price which won't fall if British Gas drop their prices.
Rip off Britain!
Watch out for the nice little rip off they tried on my dear old mum recently.
British Gas offer to fix your prices until 2013.
Good offer?
No....you have to pay an extra 5% on top of their new standard tariffs if you wish to fix.
Also, "oddly enough", there is no mention of what happens if prices fall (even if that is unlikely). It seems the hapless customers lock themselves into a fixed price which won't fall if British Gas drop their prices.
Rip off Britain!
Playing Politics With People's Lives - The People Fight Back
I am pleased to see that the American people have woken up to the fact that the politicians on Capitol Hill have let them down.
The switchboard at Congress almost crashed as Americans voiced their anger at the stalemate in Washington over raising the country's $14.3 trillion debt ceiling.
The vote on raising the debt ceiling has been postponed until Thursday.
The message to the politicians is simple, don't play politics with people's lives!
The switchboard at Congress almost crashed as Americans voiced their anger at the stalemate in Washington over raising the country's $14.3 trillion debt ceiling.
The vote on raising the debt ceiling has been postponed until Thursday.
The message to the politicians is simple, don't play politics with people's lives!
Tuesday, July 26, 2011
Playing Politics With People's Lives -The Columbian Stand-off
Sadly, for those of us who live in the real world, the politicians in the US have so far failed to reach any form of agreement wrt raising the debt ceiling.
Partisan hatreds and ideology are driving this protracted Columbian stand-off, whilst the economic well being of real people who have to earn a living in the real world is being held hostage by the antics of those on Capitol Hill.
he risk of a US default is increasing, as talks between President Obama and Boehner (the leading Republican in Congress) collapsed acrimoniously.
Needless to say, the politicians are blaming each other for this mess.
President Obama made a television address in which he stated:
"We risk a deep economic crisis - this one almost entirely caused by Washington."
Boehner claims that he "had made a sincere effort to work" with the White House but that divisions could not be narrowed.
Playing politics with people's lives will lead to economic disaster, and will cost both the Democrats and Republicans dear in the next elections.
Partisan hatreds and ideology are driving this protracted Columbian stand-off, whilst the economic well being of real people who have to earn a living in the real world is being held hostage by the antics of those on Capitol Hill.
he risk of a US default is increasing, as talks between President Obama and Boehner (the leading Republican in Congress) collapsed acrimoniously.
Needless to say, the politicians are blaming each other for this mess.
President Obama made a television address in which he stated:
"We risk a deep economic crisis - this one almost entirely caused by Washington."
Boehner claims that he "had made a sincere effort to work" with the White House but that divisions could not be narrowed.
Playing politics with people's lives will lead to economic disaster, and will cost both the Democrats and Republicans dear in the next elections.
Monday, July 25, 2011
Playing Politics With People's Lives
The markets are beginning to realise that, thanks to the intransigence of the politicians, the US may well default on its debts. The opening sessions in all major countries this week saw falls in their key indexes.
Sadly, the politicians are more concerned with playing politics with people's lives rather than raising the country's $14.3 trillion debt ceiling.
Some cynics are of the view that the chaos caused (and flight to gold - today it touched an all time high of $1,622.49 per ounce) by the ongoing impasse in raising the debt ceiling is benefiting those with an interest in gold.
Let us trust that those politicians who are blocking a deal are not found to have significant holdings of gold.
Sadly, the politicians are more concerned with playing politics with people's lives rather than raising the country's $14.3 trillion debt ceiling.
Some cynics are of the view that the chaos caused (and flight to gold - today it touched an all time high of $1,622.49 per ounce) by the ongoing impasse in raising the debt ceiling is benefiting those with an interest in gold.
Let us trust that those politicians who are blocking a deal are not found to have significant holdings of gold.
Friday, July 22, 2011
Greece To Default
The markets have been, for the moment, calmed by the EU bailout "plan" that kicks the can of systemic failures of Europe further down the road.
However, the fact that Greece will default and the fact that the wealthier nations in Europe (ie Germany) will have to pay more to prop up Greece has not gone down well with the taxpayers.
Germany's largest taxpayers lobby (Germany’s League of Taxpayers) is not happy, and says that the decision reveals "negligence" toward taxpayers' interests and an unacceptable lack of accountability for indebted states
Reiner Holznagel, vice president of Germany’s League of Taxpayers, told Handelblatt newspaper:
"There has to be improvement in this respect so that taxpayers aren’t constantly faced with new liability risks. The EU decision that the bailout fund in the future can buy debt of states in crisis by itself seals the transformation into a liability union. "
Whatever the political "elite" of Europe claim, there is not the political will on the ground to support unification or unlimited bailouts; especially when those bailouts are applied to a country that knowingly committed fraud in order to join the Euro.
The markets, for the moment, may be appeased. However, be under no illusions, this deal will unravel and along with it the Euro.
However, the fact that Greece will default and the fact that the wealthier nations in Europe (ie Germany) will have to pay more to prop up Greece has not gone down well with the taxpayers.
Germany's largest taxpayers lobby (Germany’s League of Taxpayers) is not happy, and says that the decision reveals "negligence" toward taxpayers' interests and an unacceptable lack of accountability for indebted states
Reiner Holznagel, vice president of Germany’s League of Taxpayers, told Handelblatt newspaper:
"There has to be improvement in this respect so that taxpayers aren’t constantly faced with new liability risks. The EU decision that the bailout fund in the future can buy debt of states in crisis by itself seals the transformation into a liability union. "
Whatever the political "elite" of Europe claim, there is not the political will on the ground to support unification or unlimited bailouts; especially when those bailouts are applied to a country that knowingly committed fraud in order to join the Euro.
The markets, for the moment, may be appeased. However, be under no illusions, this deal will unravel and along with it the Euro.
Thursday, July 21, 2011
The EU Hail Mary
The EU's Hail Mary (wrt "solving" the Euro crisis) has been leaked by the Telegraph.
Key elements:
1 More money will be thrown at Greece.
2 "We call on the IMF to contribute to the financing of the new Greek programme in line with current practices." The IMF are far from guaranteed to support this.
3 Lower interest rates and extended maturities means default.
4 "We call for a comprehensive strategy for growth and investment in Greece." Fat chance of this happening!
5 "All euro area Member States will adhere strictly to the agreed fiscal targets, improve competitiveness and address macro-economic imbalances. Deficits in all countries except those under a programme will be brought below 3% by 2013 at the latest." Fat chance of this happening!
This Hail Mary response will not impress the markets.
Friday will be an "interesting" day!
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