Pussy Riot

It's not really my kind of music.  But if Vladimir Putin wants to throw them in jail for seven years on trumped-up charges, then I'm inclined to lend a favourable ear.  Go girls!

Clash of cultures

The scribblers meet the bank.  Here is The Independent's report of yesterday's HSBC presser:

The participants on the call were a bunch of hacks straining to hide their incredulity at what was being said and a bunch of HSBC executives who genuinely seemed to imagine that they were giving frank replies to rather mean questions.

Why are we going on about that cocaine money-laundering thing when their continued capital strength is such a source of reassurance?

That Libor scandal is not to be discussed. We've said all we can. Now about the 12 per cent rise in commercial banking revenues... They did touch on the various scandals, but it seemed to think these things had happened at some other company, with them mere innocent bystanders.

"The banking industry is operating in a hostile climate," said the chairman Douglas Flint, as if HSBC had nothing to do with creating public and political anger at the sector. The bank's leadership – Flint and chief executive Stuart Gulliver – insist that HSBC's issues are a matter of structure rather than culture.

Would his own bonus be affected by the money-laundering fiasco, Gulliver was asked. He pushed back: "That's a matter for the remuneration committee," which sounds very like "no, why should it?"

"We get it," insisted Gulliver, sounding for all the world like a man who does not.

When will they ever learn?

What's on when?

Confused about the Olympics schedule?  I know I was.

This site is of some modest assistance - just click on the blue buttons.  Then all you have to do is find out which programme on the red button is showing it.

Quote of the day

From The Independent (here):

The commercialisation of the Olympic Games and the heavy-handed policing of the Olympic "brand" by the organisers and their lawyers may in later years become a case study in how not to do it. It is hard to believe the McDonald's image is improved by insisting that it be the only provider of chips in the park. It is even less likely Visa will benefit from its insistence only its cards can be used.

The idea of sponsorship is surely that the image of the brand is enhanced because it is associated with something as uplifting as sport at its best, not that it seeks to drag sporting events down to the grasping commercial reality of everyday life.

Only too true.

   

Quote of the day

From Mitt the twit (here):  

In his book,No Apology, he writes:

"England [sic] is just a small island. Its roads and houses are small. With few exceptions, it doesn't make things that people in the rest of the world want to buy. And if it hadn't been separated from the continent by water, it almost certainly would have been lost to Hitler's ambitions."

   

It's fate

Inanimate objects.  The Tories are condemned to ridicule:  they can't even ring a bell without it going wrong.

                   
                   
                   
             


                   

No but yes but maybe

It is a peculiar strategy but it seems to be working.  Every time Vince denies wanting the job of Chancellor, he moves a little closer to achieving it.  The Independent reports:

Vince Cable has denied he is angling for the job of Chancellor as George Osborne's credentials were questioned by two Conservative politicians.

A day after he angered Mr Osborne by saying he would "probably" be a good Chancellor, the Liberal Democrat Business Secretary was on his best behaviour yesterday.

"I am not pushing for the job. We are part of a team," Mr Cable said. "We have a collective agreed policy and I am delivering on my bit of it, which centres on the area of industrial strategy. I am not proposing a radically different approach." If he were to be made Chancellor, Mr Cable stressed, "I would be building on what George Osborne has already achieved". He dismissed Labour's criticism that Mr Osborne was a "part-time chancellor" because of his role as a strategist.

Who knows?  Given the doldrums of Slasher Osborne, perhaps Cinders will actually go to the ball.

Music of the week

I am not usually keen on cover versions but this is a tremendous elaboration on what was a good song to begin with.  I commend to you the keyboards solo in the middle, backed up by the pounding bass and eventually the lead guitar.  (Whit a poseur! - ed).

A learning experience?

What lesson will the airport authorities learn from this security lapse?

The 11-year-old boy sparked a security alert after managing to fly from Manchester to Rome on his own without a passport, ticket or boarding pass.The schoolboy passed through security without being checked, before boarding the Jet2.com flight yesterday

.Liam had travelled less than three miles from a nearby shopping centre, before evading five security checks to successfully board flight LS791 to the Italian capital.

The captain was only alerted to the extra passenger when holidaymakers raised concerns during the flight.

It would be a foolish dream to suggest that they should limit themselves to one security check and do it properly.  No, I suspect that it will involve additional tedious and futile checks, to the discomfort and inconvenience of travellers.

  

God shuffled his feet

It was Tom Nairn who said "Scotland will be free when the last minister is strangled by the last copy of the Sunday Post."


The Independent reports:

“The Scottish government is embarking on a dangerous social experiment on a massive scale,” said a spokesman for the Catholic Church in Scotland. “We strongly suspect that time will show the Church to have been completely correct in explaining that same-sex sexual relationships are detrimental to any love expressed within profound friendships."

The Church of Scotland was more measured in its response but accused legislators of needlessly rushing ahead with legislation that many of its members found difficult."We are acutely aware that opinions differ among our own members and that many people are anxious and hurt in the current situation,” said Rev Alan Hamilton. "We believe homophobia to be sinful and we reaffirm our strong pastoral commitment to all people in Scotland, regardless of sexual orientation or beliefs."

Sad to see the churches lining up once again with the forces of reaction, especially when the proposed legislation will force no-one and no church to do what it doesn't want to do.

The incredible shrinking economy

Time for plan B?

Something wrong here

Well, well. well, there's a surprise - the bankster bosses want to charge us for current accounts.  The Independent reports:

In a wide-ranging speech, Financial Services Authority chairman Lord Turner called on bank bosses to act as "custodians of institutions of great public interest, as well as custodians of shareholder value".

He warned the end of free current accounts might be needed to drive more competition into the sector and move away from a model where banks sought profit instead from higher-margin products, leading to the mis-selling of payment protection insurance.

So the banks mis-sell products (it used to be known as swindling) to their customers and, in order to stop them, customers are expected to pay more in regular fees?  When I lend money to a bank, I expect them to pay me for that privilege, just as they expect me to pay when they lend me money.  And heaven knows the banks are far from slow to impose extra charges on the slightest excuse.

And I thought that the FSA was supposed to be on the side of the customer ...

Mixing with the wrong sort

So posh Dave invited into his office a man who may turn out to have been a criminal.  Our Dave didna ken, I hear you say.  Aye, but did he ask sufficient questions?   The Leveson Inquiry indicated that there is room for doubt.  The Independent reports:

Issue: How many times did David Cameron seek assurances from Andy Coulson about his past?

What Cameron said: The Prime Minister said he asked the former News of the World editor for assurances about his past before he hired him at a meeting in his office in March 2007. Following reports in July 2009 of widespread phone hacking at the News of the World, "I asked Andy Coulson to repeat the assurances."

What Andy Coulson said: Asked whether Mr Cameron sought further assurances from him in 2009, Mr Coulson replied: "Not that I recall."

Other evidence: In July 2011, Mr Cameron said he had appointed Mr Coulson as his communications director "on the basis of assurances he gave me that he did not know about the phone-hacking and he was not involved in criminality".

Furthermore, posh Dave became involved with a wumman who might also turn out to have been a criminal.  All those country suppers, and then there was Raisa (the horse);  all very messy and more than a bit grubby.  And now that she has been charged with criminal offences, who knows what else may emerge?

Bandits

There are times when I wonder about the sanity of our legislators.  Take this:

In a report, the House of Commons' Culture, Media and Sport Select Committee called for local authorities to approve the creation of more casinos, which should be permitted to provide up to 20 high stakes gambling machines.

Betting shops would also be able to increase from four the number of “B2” fruit machines on which punters can place bets of as much as £100 a time, under the committee’s recommendation.

The proposals raise the prospect that high streets up and down the country could offer the machines, which invite gamblers to bet an amount representing a quarter of the average amount taken home each week by workers with a single press of a button.

One senior MP, John Whittingdale, the Conservative chairman of the committee, described the current system of gambling regulation as “reluctantly permissive,” and insisted that fruit machines were “legitimate entertainment”.

Are there not already more than sufficient opportunities for gambling?  And why bet on such machines, as they are fixed to deliver a return to the owners?  At least, the pools, the horses and the stock exchange offer the possibility of a decent return ...

  

Quote of the day

From Mr Tony in The Telegraph (here):

We must not start thinking that society will be better off “if we hang 20 bankers at the end of the street”, Mr Blair says.

All together now - "Oh yes it will!"

Crying wolf

How did we get into this shambles?  And where will it all end?  The Guardian reports on a crisis coming to a head:

Spain is heading inexorably towards a bailout, probably quite soon. It was always a case of smoke and mirrors to imagine that the promised €100bn (£78bn) package of support for Spanish banks would be enough and so it has proved.

This is a country with a collapsing economy, an imploding property market, banks nursing colossal losses, and 10-year bond yields at 7.5%. The question is not whether there will be a bailout, but how big it will be. At least €300bn in all probability.

The second conclusion is that the trapdoor is opening up under Greece. German patience with Athens has run out, and the IMF was forced to deny reports on Monday it was preparing to cut off financial support. The Greek government is now faced with the choice of agreeing to a new range of demand-reducing measures it knows will be both counter-productive and politically toxic in order to be able to pay its bills inside the euro zone, or to devalue and default outside monetary union. A voluntary Greek exit would be ideal for Angela Merkel.

If Greece exits, Spain and Italy will be next; and they are too big to bail out.  Meanwhile the European Commission, the European Central Bank and the German Government are fiddling while the euro collapses:

Germany insists the new system of rigorous European supervision of banks has to be operating before common eurozone funds can go to a country's banks. Critics suspect Berlin is playing for time, to delay the creeping mutualisation of liability in what one of the senior officials describes as the developing "mechanism to run a continental economy".

...

The aim, likely to prove over-ambitious, is to have the new regime up and running by the new year. British and European officials believe it will be an improvement on the way things are currently supervised. Yet they doubt if it would be fit to handle a full-blown banking crisis, and would instead be a fairweather regime that would struggle to cope with a storm.

But will it ever get the chance?  Will the euro survive until the new year?

 

It's a hard life

Don't you feel sorry for those cabinet ministers having to use public transport?  After all, they're not used to mixing with ordinary people and it will come as a shock to the system.  The Telegraph reports:

Ministers have been banned from taking cars and using the so-called Zil lanes, named after the routes formerly reserved for Soviet leaders, which have been established across London for VIPs.

A Government spokeswoman said: "All ministers will be expected to travel to the Games like everybody else. There will be some limited circumstances when this might be waved but as a general rule that is what they have been told."

...
However, some ministers have been irritated by the order to take the Tube.
One Cabinet minister told The Independent: "This has caused a lot of ill-feeling and frankly some of us would rather not be going to anything at all.
"The rules are unbelievably draconian. We've basically been told we're on our own and have to look after our guests with no official support and we'll have to go by Tube as well. 

Of course most of us don't have any opportunity to take advantage of a chauffeur-driven limo.  But ministers are different - at least, they think they are ...

Crackers

Some people are strange.  You could buy a lot of pan loaves instead.

Someone has paid £230 at auction for a 30-year-old piece of toast. Not just any old piece of toast, however – a piece of toast served to, but not eaten by, Prince Charles on the morning of his wedding to Diana Spencer in 1981. The provenance was impeccable.
What an extraordinary, moving bit of carbohydrate. The scene constructs itself: the young Prince, about to reach for his usual second piece of toast, but suddenly overcome with doubt; the toast, returned, untouched, puzzled over by the staff; and finally one says, "That toast, colleagues, is history. In that toast, we shall see this marriage unfold. I am keeping that, to sell it at a profit in decades to come." The age of the reliquary is not over. God knows what it would have fetched if the royal toast had been proffered to the sainted Diana herself, or if evidence of marital doubt were present in a single, uncommitted bite mark.

It will be mouldy by now.  Even with marmalade (which hides a lot of sins), it will be inedible ...

Where did it all go wrong?

The Guardian Diary has the answer:

So let's get this straight. Who at games organisers Locog was monitoring the contract with G4S? A fair and simple question for the home affairs committee chairman Keith Vaz to put. Here's the answer Locog's Paul Deighton provided in a letter to Vaz on Monday: "The contract was initially monitored weekly by the multi-agency Security Workforce Board. From January 2012, this body was subsumed into the Venue Security Delivery Board ('VDSB') [sic], a multi-agency body, meeting weekly, reporting directly to the Olympic Security Board, with members from the Home Office, GOE, Police, MOD, G4S and Locog. The VSDB monitored the G4S progress on the recruitment, training and accreditation of security guards for the Games and received weekly reports." There's more. "Locog established two bodies operating jointly with G4S. These bodies — the Contract Management Board and the Contract Performance Board, respectively — reported into the VSDB and initially met bi-weekly before moving to weekly meetings several months ago." In May, Locog also instituted weekly meetings with G4S "to review performance". Let's not forget the regular reviews by another Locog body, the Contract Review Board. And yet, with all those cooks stirring the broth, it all went wrong. Incredible, really.

 

It's a start, at least

As a long-suffering Lloyds shareholder, I suppose I should be irritated at the disposal of so many branches, sold off for a song.  The Guardian sets out the position:

Lloyds knew bad news was inevitable. A forced sale, in a depressed market, with only one and a half bidders, was never going to secure a decent price. Even against this undemanding yardstick, however, the proceeds from transferring 632 branches to the Co-op count as miserable.
Lloyds, under Project Verde – the name for Lloyds Banking's enforced sale of hundreds of its branches – is getting only £350m at first, against an original dream of £1.5bn, albeit the size of the asset book has been cut. It is also underwriting the debt the Co-op is raising to do the deal.
Long-suffering shareholders in the old Lloyds TSB, the pre bailout bank, have been stung twice – once when their former board paid an absurd sum in 2008 to tow away HBOS; and now to satisfy the European commission's state-aid rules.
To add salt to the wound, the TSB brand is being thrown into the job-lot.

Force majeure applies however and, in the longer term, the Co-op may prove to be a satisfactory home.  Lloyds is still too big and, sooner or later, unbundling Halifax/Bank of Scotland from the remaining Lloyds operation must be on the cards (hopefully at a better price).

More info on the Co-op transfer here.

The G4S theme song

No, really; this is not a spoof.  (It's not very good, but that's a different point.)

So it goes

Another day, another banking scandal.  This time it is HSBC which has admitted to laundering money for assorted Mexican drug lords, pariah states and terrorists and which will consequently face severe sanctions.  After a while, this sort of thing becomes boring.

Interestingly, HSBC's share price declined yesterday by a mere 1.69%.  Expect that price to decline rather more sharply today.

Embarrassingly for the coalition government, Lord Green - the man in charge of HSBC when the evil-doings occurred - is now a Government Minister.

Doing the numbers

The G4S Olympic contract amounted to £284 million, in return for which G4S would provide 10,400 security personnel.  Of this amount, £57 million was in the form of a "management fee".

Presumably therefore £227 million was earmarked for the supply of personnel (incidentally amounting to about £22,000 per employee).

G4S is now aiming at the provision of only 7,000 personnel, a 33% shortfall (although it cannot guarantee even this reduced provision).

Accordingly, and assuming that the contract is on a broadly pro rata basis, G4S remuneration faces a reduction of £75 million (33% of £227 million).  Its management fee of £57 million must also be in doubt, and then it also has to pay for the extra soldiers and police now to be committed to the Games.

It is therefore facing a loss on the contract of well over £100 million.  So why is the company talking of a loss of only £30 million to 50 million?

(Basic figures taken from this article.)

Old bloggers never die ...

... they just turn up in unfamiliar guises.  Much though I disagree with his political viewpoint, it is comforting to see that Mr Eugenides has found a niche on a rightwing website ThinkScotland.  Here is the most recent example of his incomparable invective:

Recent missteps have shown that Alex Salmond is vulnerable. Conducting an independence referendum that is almost Pythonesque in its level of debate (“but apart from the BBC, pound sterling, Royal Family, Army, Navy, Air Force, UN Security Council seat, two world wars, three hundred years of prosperity, Bob Wilson, and aqueducts, what has Britain done for us?”), contemptuous of critics who demand answers to the most basic of questions about an independent Scotland – who will defend us? what will be the coin of the realm? – the First Minister should by rights be on the ropes at this stage of the political cycle.

The announcement last week of the “Yes” Campaign Board, for instance, was a toe-curlingly eloquent demonstration of the truth that we are stronger together than apart; if the best we as a nation can muster to make the case for “freedom” is Dave Spart-a-like former Trot MSP Colin Fox, Ex Glasgow University rector and occasional bad musician Pat Kane, and Elaine C Smith, the comedienne who is to acting what Sir Arthur “Bomber” Harris was to acting, then the Nats should surely be better off applying to be a canton of Switzerland and then signing up en masse for the Dignitas clinic.

Parliamentary Question Time, huh?

Most illuminating:

A Labour member asked this urgent question. What is the precise number of security personnel G4S will be providing?
Everyone was delighted with the Home Secretary's answer. "The precise number will become clear."

  

Music of the week

Probably not suitable for those under 40:

Hunt the morality

That's where I've been going wrong.  I foolishly thought that, if you paid someone to do something, you could have a reasonable expectation that that something would be done.  But that paragon of administrative competence, Heremy Junt, takes a different view.  The Guardian reports:

On the BBC's Andrew Marr programme, the culture secretary, Jeremy Hunt, said it was "completely normal" for a contractor to fail to deliver on a major project.
He refused to criticise G4S, saying it had acted "honourably" by raising with the government the problems it was experiencing.
He said the government had "of course been monitoring the situation with G4S, and their management told us right up until last week that everything was on track. But we've had that contingency plan for many months and we are just very lucky to have fantastic armed services who can come when we need them and they will do a brilliant job."

So, if a company takes on a commitment, and then fails to deliver, it can still act "honourably" by admitting the fact, even if that means that at the last minute someone else has to pull the irons out of the fire.

It's a funny old world ...

Hard to believe

Yet more incompetence at the highest levels.  The Independent reports:

Private security company G4S will not be financially penalised for failing to recruit sufficient security guards for the Olympic Games, it emerged last night.
The firm has been accused of letting the country down just two weeks before the Games, with soldiers forced to cancel family holidays to ensure venues are protected. But a senior Government source told The Independent that the contract with G4S did not include a penalty clause.
The revelation appears to contradict a statement by the Home Secretary Theresa May in the House of Commons. She told MPs that while the contract was between G4S and the Games organisers Locog, she understood that there were "penalties within that contract".
A source said that in fact it was a pro-rata agreement where G4S were paid for each extra security guard they supplied – and not penalised if they did not make the overall target. "The person who negotiated the contract should be shot," the source said.

The Games may have been taken over by professional athletes, but the organisers appear to be rank amateurs.

The best things in life are free

You might want to buy euros for the holidays now (unless you expect a further decline in the value of the euro).

In any event, you will get a lot more euros to the pound than you did last year.

Quote of the day

From The Guardian website (here):

Nothing cheers the financial markets like the smell of job cuts in the morning.

Peugeot's shares have risen by 3% in early trading, following the news of the 8,000 job cuts.

That comes despite an early drop on the wider Paris stock market, which is down around 0.2% in lacklustre trading.

   

Masters of the universe

Why are so many of the high heid-yins incompetent?  City AM lists some of the latest boo-boos in the private sector:

CORPORATE blunders are like buses: they arrive all at once. The latest involve G4S, which doesn’t know whether it will be able to hire enough guards for the Olympics, forcing the army to step in. The O2 mobile network suffered some outages yesterday. Britvic recalled some of its drinks. All of this follows the Libor price fixing scandal, which has engulfed Barclays and many others; the news that HSBC is about to be hit by a massive fine in the US for not doing enough to comply with money laundering rules; JP Morgan’s major trading loss; and GlaxoSmithkline’s $3bn fine.

Then there are our politicians who are apparently incapable of knitting together a budget that will stand for more than two weeks; a chancellor who makes unfounded accusations instead of doing his job; an administration which deliberately and carefully avoids dealing with the problems of care for the elderly; and a prime minister drifting along the surface without ever bothering to think beyond tomorrow's headlines.  Does he want an EU referendum?  Yes, no, maybe - and don't ask him to formulate a question.

I guess I always knew that The System promoted the incompetents, but it has never been so comprehensively demonstrated as in the last few weeks.

   

How did she ever get elected?

Getting a bit heavy

What?  You expected chips with your Olympics?  Not a chance.  Sebastian Coe has sold his soul to McDonalds ...

Update:  more here.

 

What planet is he on?

Don't you feel sorry for the poor guy?  After all, he only has his millions to comfort him.  City AM reports:

BOB Diamond yesterday accused the Treasury select committee of tarnishing his reputation as the Libor scandal surrounding the bank he once ran continues to unfold.
In a letter to chairman Andrew Tyrie, the former Barclays boss expressed “dismay” at the suggestion that he was “less than candid with the committee last week,” calling the implication “totally unfair and unfounded”.
MPs’ comments that evidence from Diamond and Barclays chairman Marcus Agius did not match up “have had a terribly unfair impact upon my reputation, which is of paramount concern to me,” added Diamond.

I would only ask: what reputation?

Court language

It is far from edifying.  The Independent reports:

The allegation made by the Crown that during the course of the game, Terry, following a row with Ferdinand and a physical clash, turned back towards the brother of Rio Ferdinand and said: "F*** off, f*** off... f****** black c***, f****** nobhead [sic]". Terry strenuously denies using the words as a racial slur but says he did use them in the context of challenging what he says was Ferdinand's original allegation, on the pitch, that he, Terry, had been abusive.
...In giving evidence to the court under questioning from Penny, Ferdinand admitted that he had used the allegations about Terry and Perroncel to wind up his opponent. "I said, 'How can you call me a 'c***'? You shagged your team-mate's missus. That's a c***."
...Ferdinand said that there would have been no question of him going to see Terry if he thought that he had been racially abused. Being sworn at was part of the game he said, but racial abuse was completely unacceptable.

And these guys are considered heroes in some quarters?  Despite the desperate poverty of their means of expression?

  

Fantasy economics

So our Prime Minister thinks that the Olympics will boost Britain's economy by £13 billion over the next four years.  Utter tosh!  The Independent explains:

We will never be able to look back at our economy and determine its size if beach volleyball had not been held on Horse Guards Parade. But a series of academic studies have found that big sporting events do not boost economic growth, help employment or even increase tourism. They can do precisely the opposite – and not just because so many workers are being told to stay at home, and many of those working are demanding bonuses to do their job.
For a start, the infrastructure is highly specialised, built fast and to the requirements of organisers rather than the needs of the host city. So we have the obscene spectacle of spending £40m on a basketball arena and £19m on a water polo venue, only to be pulling them down once the crowds disappear. Even Sydney, among the best organised recent Games, tore down several venues – hardly surprising, since it must hold one event a week to cover running costs of its surviving Superdome.
As job creation schemes, these mega-events are flawed. Much of the work making expensive venues is highly specialised, so of limited help for unemployed locals. In the longer term, jobs in sporting centres are often part-time, low skilled and low paid. Any help to the job market is highly inefficient: one American study found the cost of each job generated was four times the cost of the next best alternative. Other studies speculate that the Olympics actually cost a country jobs when so much taxpayers' money is frittered away.

But what about all those extra tourists?

Amid all the hype, there is much talk of tourism. So Londoners hoping to rent out homes at inflated prices were surprised when the promised goldrush never materialised. Meanwhile, music festivals have been cancelled and West End theatre bookings are down by 20 per cent.
The truth is that some visitors would have been coming to London anyway, while many more avoid the circus and business travel is deferred. When we last held a global sports event – the Euro 96 football finals – only 100,000 of the expected 250,000 foreign visitors turned up, and they spent peanuts by comparison with overall tourist spending. When Greece held the centenary Olympics in 2004, it took tourism two years to recover to pre-Games levels.

Back to basics

Easy for politicians to demand.  The Telegraph reports:

Up to 600,000 pupils a year will sit a rigorous new writing exam as part of a Coalition drive to ensure children master the basics before starting secondary education.

...

Under the new exams, which will form part of Sats tests, pupils will be expected to recognise the difference between formal and non-standard English, in response to concerns that too many youngsters rely on so-called “text speak” in their written work.

The exam will also focus on the grammatical functions of words, including nouns, verbs, adjectives, adverbs, pronouns, prepositions and conjunctions.
Officials say that children should be “taught to proofread” their work for spelling and punctuation errors, omissions and repetition.
Pupils will also be expected to use “fluent, joined and legible” handwriting and will be taught to use punctuation marks correctly, with a focus on full stops, question marks, commas, inverted commas and apostrophes. 

Not sure how many modern primary school teachers would be competent to teach this.  Grammar and punctuation became a lost art sometime in the 1980s.

Throwing good money after bad

It's a bit of a mystery.  Why is the Bank of England buying £50 billon worth of government bonds from the banks?  The Guardian reports:

Bond purchases increase the demand for bonds, which raises their price. Since private banks hold billions of pounds of government bonds, they can sell them and use the money they raise to make loans to businesses.

It has not worked quite as planned – banks have hoarded the money to boost their reserves. But critics of QE who say it is useless must answer the point that without it banks would have withdrawn even more loans, triggering more bankruptcies and repossessions.

Another pitfall is that higher bond prices also translate into lower long term interest rates (because the rate a bond pays is fixed, if investors pay more to get the bond, the rate it yields starts to look correspondingly lower).

So chief among the critics of QE have been pension funds, which argue that lower long term interest rates depress returns on savings while doing nothing for the economy.

It's all a bit thin, you say?  I would tend to agree.  But I'm not an economist; so I must bow to the judgement of those idiots who have dumped us into this mess in the first place ...

Argument of the week

Music of the week

Higgs boson?

Everyone says its discovery is tremendously important.  But what is it?  The Guardian supplies some answers:

"The Higgs boson is an elementary scalar particle first posited in 1962, as a potential byproduct of the mechanism by which a hypothetical, ubiquitous quantum field – the so-called Higgs field – gives mass to elementary particles. More specifically, in the standard model of particle physics, the existence of the Higgs boson explains how spontaneous breaking of electroweak symmetry takes place in nature."

Nope; doesn't do much for me, either.  What about this one (for a child in the back of a car)?

"It's a particle that some scientists have been looking for. Because they knew that without it the universe would be impossible. Because without it, the other particles in the universe wouldn't have mass. Because they would all continue to travel at the speed of light, just like photons do. Because I just said they would, and if you ask 'Why?' one more time we're not stopping at Burger King."

I fear that there are things in my philosophy that are forever doomed to remain a mystery (a bit like women really) ...

  

Messier and missier

The plot thickens.  City AM reports:

... there was a decision from the top of Barclays – apparently, by COO Jerry del Missier, who also quit yesterday – to push down their Libor submissions to suggest that they were in a better position as a bank than they actually were. This policy was also pursued by other banks. What makes all of this explosive is that Barclays believes that it had informed the Bank of England that others were distorting Libor in 2008 – and that it only joined in after that conversation.

According to Bob Diamond’s version of events, Paul Tucker, the Bank’s deputy governor (and until now the frontrunner to become governor next year) sounded almost sympathetic to Barclays’ plight in a crucial telephone call, arguing that perhaps its rate needn’t be as high as it was and implying that senior Whitehall figures agreed. However, and somewhat confusingly, Barclays and the Bank both deny that Diamond was told or given the green light to cut his Libor submissions. Instead, del Missier is being blamed for having “misinterpreted” the memo.
Who knew what, and when? Did the Treasury under Labour know what was going on with Libor? How could it not have? What about the Bank of England? Why didn’t it act?

We also need to find out why Diamond suddenly performed a U-turn and resigned. Did Sir Mervyn King and Adair Turner tell the board to fire him, as seems to be the case? Did George Osborne endorse this? And did Diamond’s resignation have anything to do with the fact that Barclays had started to fight back and seemingly implicated the central bank in the whole affair?

We can expect further confusion when Diamond Bob testifies today to the Treasury Select Committee.

The burning question

What does Andy Murray carry in those two enormous bags that he brings onto court?  I appreciate that he needs to have half a dozen rackets (although he only ever manages to use two or three), a bottle of juice, a sun hat (optimistically) and a spare shirt, but that fails to account for the sheer volume of those bags.

And he's not the only one ...

 

Passing the buck back and forth

So there you go.  Contrary to what we learned yesterday, Diamond Bob has now fallen on his wallet and Marcus Agius (where do they find these names?) has unresigned and is back as full-time chairman.

Perhaps tomorrow, Bob will be back and it will be the turn of Marcus to sample the pleasures of a loaded revolver and a bottle of whisky.

Oh, look, there goes consigliere Jerry del Missier as well.

Quote of the day

From The Independent (here):

The events of the past few days are proof that not all organised criminals go around carrying violin cases. Some sit jacketless in City offices, bent over computer screens, rigging interest rates. Others give their salesmen's smiles to small-scale entrepreneurs desperate for a loan, and make them buy products that are as much a swindle as a three-card trick. And, if there's the slightest whiff of official action that might cramp their style, there's always some big-shot to whisper to the Government: "That's a lovely economy you've got there. You wouldn't want it to have an accident, would you?" The voice of the protection racket down the ages.

Too damn right.

(And, yes, I'm enjoying it; aren't you?  My only fear is that, once again, they'll get away with it.)

  

They're all in it together

Nice work if you can get it.  The Independent reports:

Michael Fallon
Mr Fallon is deputy chairman of the Conservative Party. A close ally of David Cameron and a reliable defender of the Government on the airwaves, the 60-year-old is a board member of Tullett Prebon Plc, a leading brokerage firm that dominates the rates market and which is being asked to co-operate with FSA inquiries. He resigned his directorship in the days after the coalition was formed, but was reappointed in September 2010. He receives a quarterly fee of almost £7,000 for 20 hours' work.
...

Francis Maude
The Cabinet Office minister is a key Tory moderniser. He was a member of Barclays' Asia-Pacific Advisory Committee for much of the boom from 2005. In an entry in the Register of Members' Interests, he said: "My duties were to attend committee and other meetings by phone or in person; other advice and consultation by e-mail." He received payment of £9,230.23 after tax for 15 hours' work in 2009, and resigned at the end of that year. He joined the coalition government in May 2010.

There will be more to come.