Boris and his toys

The Times revels in the humiliation of the London Mayor:

Theresa May, as dry as burnt toast, had come to the Commons to tell us her decision on water cannon. She explained that it was classified as a “less lethal system”, the same as Tasers and baton rounds. Behind her, slumped in a corner, sat the dishevelled garden gnome that is Boris Johnson.

Theresa explained in a voice as dessicated as coconut that in June 2014 the mayor of London had approved the purchase of “three Ziegler Wasserwerfer 9000 water cannon” from Germany.

Did I see Boris flinch? Theresa spoke the words “Ziegler Wasserwerfer 9000” as if each was an illegal alien who had arrived in her mouth without papers. The Wasserwerfer had cost £218,000. The Wasserwerfer had 67 “outstanding issues”. The Wasser was werfer a wobbly. She’d consulted every expert in die Welt and had decided Boris was ein Dummkopf. (I paraphrase, but I think you will find my translation is sound.)

Those who play with water get wet.

Speech of the week

Mhairi Black's maiden speech - well done and worth listening to:

Opportunists?

So the SNP are to vote against the relaxation of the hunting ban in England.  Their Westminster leader has sought to justify this intervention in English affairs:

Angus Robertson, the SNP leader in Westminster, said it was “right and proper” to assert the Scottish interest on foxhunting given that there are moves in Holyrood to toughen up Scotland’s law on the issue.

“We totally oppose foxhunting and, when there are moves in the Scottish parliament to review whether the existing Scottish ban is strong enough, it is in the Scottish interest to maintain the existing ban in England and Wales for Holyrood to consider,” he said.

Not terribly convincing, given the SNP's previous adherence to a policy of non-intervention in matters English.  They have complained often enough about the imposition of English MPs in Scottish affairs.

Not that I think hunting foxes with dogs is anything other than disgusting.

 

There you go

At last (maybe):

Eurozone leaders have reached a "unanimous" agreement after marathon talks over a third bailout for Greece, EU President Donald Tusk has said.

He tweeted that a bailout programme was "all ready to go" for Greece, "with serious reforms and financial support".

Details of the agreement were not immediately clear. Eurozone leaders have been meeting in Brussels for more than 16 hours.

After 16 hours of negotiation, I would be surprised if they knew what they had signed up to ...

How long before it unravels?  Or am I being excessively cynical?

 

This is a coup

Looks like it.  The Guardian reports:

Under the terms set before Tsipras on Sunday night, the Greek parliament has to endorse the entire package on Monday and then pass several pieces of legislation by Wednesday, including on pensions reform and a new VAT regime, before the eurozone will agree to negotiate a new three-year rescue package.

The terms are much stiffer than those imposed by the creditors over the past five years. This, said the senior official, was payback for the emphatic no to the creditors’ terms delivered by the snap referendum that Tsipras staged a week ago.

“He was warned a yes vote would get better terms, that a no vote would be much harder,” said the senior official.

The Eurogroup document said experts from the troika of creditors – the International Monetary Fund, European Commission and European Central Bank– would be on the ground in Athens to monitor the proposed bailout programme. The trio would also have a say in all relevant Greek draft legislation before it is presented to parliament. Furthermore, the Greeks will have to amend all legislation already passed by the Syriza government this year that had not been agreed with the creditors.

Difficult to see how an independent democracy could tolerate such humiliating arrangements.

    

Suiting up

This story gives rise to additional questions:

A member of a Scottish boy band is "lucky to be alive" after collapsing with heat exhaustion on board a flight.

...

The 19-year-old, from Cumbernauld, had intended to take a suitcase and a small rucksack on board, but the airline only permits passengers to have one piece of hand luggage.

After being told he would be charged an additional fee to take the extra bag on board, he emptied the rucksack and wore the contents.

[He] was wearing four jumpers, six T-shirts, three pairs of jeans, two pairs of jogging bottoms, two jackets and two hats when he collapsed.

How did he manage to get all those clothes into what is described as "a small rucksack"?  And if all that stuff was in his rucksack, what did he have in his suitcase?  Just wondering ...

Music of the week

Extract from the Chancellor's diary

From here:

Tuesday

Iain Duncan Smith catches up with me and Dave after Cabinet, and says he really needs to talk about low pay.

“No,” says Dave. “If you can’t cope on your parliamentary creditcard, you’ll just have to get your own. These are the rules.”

IDS says he doesn’t mean that. He means the budget, and the minimum wage. He’s hoping it’ll go up.

“No spoilers,” I say. “But look. I’ll just say this. You won’t be disappointed.”

“Yeah!” says IDS. “RAAAAAGH!”

Then he clenches his fists, punches the sky a few times, and headbutts a wall. Then he leaves.

“He’s f***ing terrifying,” says Dave.

You better believe it ...

Dividends and taxes

Here is the best explanation I have seen so far on the Chancellor's changes to the dividends tax regime:

Currently, those receiving dividends benefit from a 10% tax credit. So for basic rate taxpayers, for example, the 10% tax credit means the 10% tax levied on dividend payments is reduced to zero. It is a notional credit: basic rate taxpayers don't pay the 10% tax and then receive a refund, they just don't pay tax.

This notional credit mean the current tax rates on dividends are effectively:

• zero for those paying the 20% basic rate of income tax;

• 25% for those paying the 40% higher rate of income tax and

• 30.6% for those paying the additional 45% rate.

Under the new system, all those who receive dividends won't pay tax on the first £5,000. After that, they will be taxed at the following rates:

• 7.5% for basic rate taxpayers;

• 32.5% for higher rate taxpayers;

• 38.1% for additional rate taxpayers.

It's worth noting that all these tax rates – both before and after the changes – relate to dividends received outside of ISAs and pensions. Dividends in ISAs and pensions are tax-free.

     
 

As Lola said, it's a mixed-up, muddled-up, shook-up world

The wheel turns:

After a frantic scramble involving complex political negotiations that could bring down Alexis Tsipras, the prime minister, Greece last night submitted proposals for a third, three-year bailout programme to prevent “Grexit”.

There was hope as the Greek government appeared to accept that austerity measures were inevitable in return for loans to save the country from bankruptcy and expulsion from the euro.

Greek opposition politicians, the conservative New Democracy and liberal The River parties, held secret talks yesterday in Brussels as the Greek government prepared to pass controversial legislation on pension cuts and tax increases. Diplomatic sources told The Times that Mr Tsipras appeared ready to pass measures without the support of his government coalition partners, the nationalist Independent Greeks, or left-wingers in his own Syriza party.

Let me see if I have this right.  After months of prevarication, during which the Greek government steadfastly refused to bow to demands of austerity, it held a referendum urging the Greek people to reject the creditors' demands and won by a comfortable majority.  A week later, and contrary to the referendum result, the same Greek government offers to accept austerity.

All this to secure additional loans which it will use to repay previous loans from its creditors, with a possible promise of debt re-structuring sometime in the future.

It makes my head spin ...

 

Quote of the day (2)

From here:

This is what you are not allowed to say in China: the stock market is an equity disaster and the authorities have failed to rescue the market. The phrases “equity disaster” and “rescue the market”, you see, have been banned from market reports.

For official consumption, the Chinese Communist party is merely adopting sensible measures to address a temporary outbreak of irrationality among investors; calm will return any day now.

Yeah, right. Big shareholders have been banned from selling for six months, and trading in almost half the stocks on the Shanghai and Shenzhen stock exchangeshas been suspended, an attempt to air-brush the fact that the real prices would be substantially lower.

"Temporary irrationality"?  Inscrutable ...

Quote of the day

From here:

“The chancellor said today that ‘Britain deserves a pay rise and Britain is getting a pay rise’. Unless, of course, you’re a public servant.”

Or unless you are under 25.

   

On and on and on

This is becoming tedious: deadline after deadline after deadline.  But nothing is ever decided; The Guardian reports the latest final ultimatum:

Greece has 48 hours to strike a new bailout deal with its eurozone creditors or face a banking collapse, a humanitarian emergency, and the start of an exit from the single currency, European leaders decided on Tuesday evening.

Unless Athens presents convincing details entailing more austerity as the basis for its third bailout in five years, all 28 national EU leaders, not just those of the eurozone, are to gather in Brussels on Sunday in emergency session to discuss how to contain the fallout from Greece’s financial collapse.

“We have a Grexit scenario prepared in detail,” said Jean-Claude Juncker, president of the European commission.

Nor does this sort of thing help:

In the run-up to Tuesday evening’s summit called as a result of the Sunday referendum, eurozone leaders demanded that Tsipras present specific proposals. Tsakalotos instead turned up at a meeting of finance ministers with speaking points jotted in pencil from a Brussels hotel notepad. The Greeks then promised a more formal submission by Wednesday.

“[With] the Greek government it is every time ‘mañana’,” said Lithuania’s president, Dalia Grybauskaitė, one of the Greek government’s harshest critics. “It can always be ‘mañana’ every day.”

   

Oh dear ...

Within 5 minutes of opening, the FTSE 100 is down by more than 1%.

There is some consolation: De La Rue (which makes banknotes) is up a couple of points.

 

So farewell Yanis

Did you really resign? Or were you pushed?  No matter, really.

But you brought a little colour to international finance.

And I liked your parting shot - that you will "wear the creditors' loathing with pride".

 

Quote of the day

From The Guardian (here):

... any nation that can arrange a referendum at a week’s notice, conduct it competently, and produce a result before midnight, possesses a degree of civic organisation that many would envy. In the manner of the vote, as much as the result, there has to be hope for Greece.

   

Extract from the Greek finance minister's diary

From here:

Δευτέρα

“Yanis, my friend,” says our Prime Minister, Alexis Tsipras. “How do you think we are handling this crisis?”

“Heroically!” I say.

Alexis agrees. Definitely. Only it doesn’t feel ideal, he adds, that our offices are now dark, and have no air conditioning, and we’re sitting on the floor sharing a packed lunch of stale olives out of Tupperware.

“But the crowds!” I say, gesturing out the window. “See how they cheer us!”

Alexis says they seem a bit angry.

“With the Germans,” I agree.

Alexis says it might actually just be a queue for an ATM.

“Comrade,” I say. “Don’t panic now! Was this not your plan?”

“My plan?” says Alexis. “Hang on. Aren’t you the plan guy?”

“God, no,” I say. “I’ve just been winging it.”

“Well this is embarrassing,” says Alexis.

   

Music of the week

Is nothing sacred?

The Times reports:

It is a notoriously potent brew which has become synonymous with neds and drunken disorder rather than discernment, but Buckfast is getting an upmarket makeover.

Buckie, as the caffeinated tonic wine — which is hugely popular in west central Scotland — is known, has been denounced by senior police officers and politicians.

It is known to its most ardent devotees as “commotion lotion” and “wreck the hoose juice”, and police say it is mentioned in serious crime reports more than any other drink or drug. Now it is to be relaunched as a sophisticated and aspirational tipple.

As part of an ambitious advertising campaign, the fortified wine, which is made by Benedictine monks, will be marketed as a base for cocktails.

The drink’s distributors have also hired a Michelin-starred chef to promote it as the perfect addition to a range of gourmet dishes.

It will never catch on ...

 

Spoilsports

The Times reports:

It has a curiously therapeutic effect on millions, but the satisfaction of popping Bubble Wrap is under threat after the makers of the packaging launched a type with bubbles that do not burst.

The new version is laid out in columns of connected air pockets, so that when it is squeezed the air gets pushed into neighbouring bubbles.

Miserable sods.

Isis, Isil or Daesh?

What's in a name?  The politicians seem vexed about it.  The Spectator sets out the position, for the record:

‘Isis’ is an acronym of Islamic State in Syria. ‘Isil’ – an acronym of Islamic State in the Levant. Isil is the better translation of the group’s Arabic name al-Dawla al-Islamiya fil-Iraq wa al-Sham – where ‘Sham’ represents greater Syria or ‘the Levant’ as we would say in English.

As for ‘Daesh’, it has the small propaganda advantage of reminding Arabic speakers of Daes (‘one who crushes something underfoot’) and Dahes (‘one who sows discord’). But beyond that childish word association it is no help at all, for ‘Daesh’ is just the Arabic abbreviation of al-Dawla al-Islamiya fil-Iraq wa al-Sham – or the Islamic State in Iraq and the Levant.

 

Not so bad

Hey, it could have been a lot worse:

The FTSE 100 fell more than 2% in early trade, and by the close was still down 133.22 points, or 1.97%, at 6,620.48.

As it is, we are merely back to where we were at the beginning of the year, as this graph demonstrates:

Furthermore, the recovery has already begun in Asian markets:

In Japan, the Nikkei 225 share index was up 0.36% at 20,181.55 points.

...

In Australia, the benchmark S&P/ASX 200 was up 0.25% at 5,436.10 after closing down more than 2% on Monday.

In South Korea, the benchmark Kospi was up 0.25% at 2,065.69 after suffering its biggest daily percentage fall since late May on Tuesday.

...

In Hong Kong, the benchmark Hang Seng index was in positive territory however, up 0.54% at 26,100.74.

So, reasons to be cheerful.

   

Quote of the day

From CityAM  (here):

Yes, the Greeks lied about their numbers to get into the Eurozone in the first place; but the creditor states didn’t much care. Yes, Athens should not have borrowed money like a drunken sailor, but German and French banks were more than happy to lend it to them. Yes, Greeks should not get to retire in their 50s with German-sized pensions (and without German productivity), but Greek economic fecklessness is hardly a new phenomenon Brussels was unaware of.

Finally, yes, Tsipras and his even more overrated finance minister Yanis Varoufakis are pathetically hiding behind their people in proposing a plebiscite on the creditor’s terms, rather than leading as statesmen ought to do. But the long commented-upon democratic deficit in EU institutions means such a cowardly strategy actually has some merit.

The bell is tolling for Tspiras and his Syriza party, who will surely squander the benefits of the upcoming devaluation of the new drachma relative to the euro in a series of Marxist fantasy policies, when what they ought to be doing is collecting taxes and launching structural reforms (which they will never do). Greece will become just another poor Balkan country; and that is a tragedy.

But the bell is not just tolling for the Marxist schoolboys in Athens. By failing to master a crisis that ought to have been dealt with ages ago (debt relief for structural reforms, anyone?), Europe has destroyed any claim it might have had to be the future; frankly, it now becomes an open question as to whether Europe has a future, as it surely has proven it simply cannot take effective decisions in a crisis.

Bad to worse

No fun being Greek.  The Guardian reports:

In a brief, televised address to the nation, Tsipras threw the blame onto the leaders of the eurozone. But he did not say how long the banks would remain shut, nor did he give details of how much individuals and companies would be allowed to withdraw once they reopened.

Greek banks will not open until July 7 in an attempt to avoid financial panic, after ECB capped the emergency funds keeping them running.  

It later emerged that the banks would be kept shut until after the referendum on 5 July and withdrawals from cash machines would be limited to €60 – about £40. Cash machines are not expected to reopen until Tuesday.

Greece’s finance ministry later announced that the strict withdrawal limits would not apply to holders of credit or debit cards issued in foreign countries.

How long, do you suppose, before the machines run out of notes?

Meanwhile, we can expect a bloody day on the markets:

Share prices began to plummet across Asia on Monday as hopes dwindled for a resolution to the Greek debt crisis.

Japan’s Nikkei stock average briefly fell by more than 500 points in early trading, while the euro dropped more than 3% to 133.80 yen, its lowest level for five weeks. The common currency fell as much as 1.9% to $1.0955, its lowest level in almost a month.

The Nikkei fell 2.1%, while MSCI’s broader index of Asia-Pacific shares outside Japan dropped 0.8%. US stock futures dived 1.8%, hitting a three-month low, while US Treasuries futures price gained almost two points.

More than $35bn was wiped off the Australian stock market in the first hour of trading on Monday as investors brace for an increasingly likely Greek exit from the eurozone.

The BBC has the latest exchange rate for the euro against the £ at 1.4267 (which means that my lunchtime pint in my Spanish local now costs me the equivalent of less than a £ - it's an ill wind that blaws naebody any guid),

EU solidarity?

Extraordinary report in The Observer of last week's European Summit:

Matteo Renzi, the Italian prime minister, was incensed by the refusal of several countries, including Hungary, which has taken in 60,000 refugees since the beginning of the year, and the Czech Republic, to agree to take part in a compulsory refugee-sharing scheme to help ease Italy’s burden. Cameron kept fairly quiet. The UK has opted out of EU asylum policy and Renzi, who was in an emotional state, did not need to be reminded of its non-participation. But others took up the cudgels as the row intensified across the table. Dalia Grybauskaite, the Lithuanian president, told Renzi in no uncertain terms that her country would not take part either. Bulgaria, one of the EU’s poorest countries, took a similar line. Disputes flared. European commission president Jean-Claude Juncker, prime mover behind the idea of compulsory burden sharing, and council president Donald Tusk tore strips off each other over what should be done, as inter-institutional solidarity broke down.

Angela Merkel said that the migration challenge was the most serious and difficult she had encountered in the EU during her time as German chancellor (Greece is also somewhat on her mind) as Renzi railed against fellow leaders for betraying the EU’s values. A voluntary scheme was all that was agreed. “Do as you like,” Renzi protested. “If this is your idea of Europe, keep it for yourself … you do not deserve to call yourself Europe. Either we have solidarity or we waste our time!”

These guys are not getting enough sleep.

 

Crunch time?

Is the Greek crisis nearing resolution?  I am beginning to doubt if there is a means by which the Greeks can avoid default.  And Tsipras' decision to hold a referendum next Sunday seems more like an act of defiance to throw in the teeth of EU finance ministers.

Meanwhile, Draghi and the ECB are between a rock and a hard place:

The ECB has been providing life support to Greece for months by supplying billions in liquidity to the Greek banks. If Draghi pulls the plug, he could be held responsible for potential riots on the streets of Athens and national unrest. If he keeps the funding channels open, he will be accused of acting illegally and overstepping his mandate by financing a eurozone government.

In all the circumstances, it is increasingly difficult to see how some kind of agreement could be patched together.

An apology to my Italian friends

Yes, I regret to say that it is part of Scottish culinary practice to bake macaroni in a pie.

And, yes, I am sorry to say that the decision by a fast food emporium to desist from selling this less than savoury amuse-bouche was greeted by a howl whimper of protest, to the extent that the matter was raised in parliament.

The only consolation in this sorry affair is that Greggs (for they are the business concerned) remain steadfast in their intention to banish the macaroni pie from their shelves.

You can read about it here.

   

Donald duck

Puerile schoolboy humour

Prime Minister's Questions, yesterday:

Dave just can’t help letting himself down, either with the failure of his internal logic – employers have been gagging to get rid of tax credits so they can increase salaries – or by being a sucker for a bad gag.

“You don’t want FFA, full fiscal autonomy,” he sniggered at the SNP’s Angus Robertson, “You want FFS, full fiscal shambles.” FFS! Dave had got FFS into Hansard. High fives and lols all round in Downing Street. Coming next week, WTF. Working Tax Fraud.

Pretty pathetic.

 

Dirty work at the crossroads?

Was Buck House being naughty?  Was it the old bait and switch routine?  The Guardian reports:

On Tuesday the official in charge of the Queen’s accounts, Sir Alan Reid, expressed his worries about the implications for the royal household of a decision to allow Holyrood to control nearly all crown estate assets in Scotland.

On Wednesday Reid, the keeper of the privy purse, issued an unreserved apology, saying that a briefing on royal accounts that he hosted was “never intended to be a criticism of Scotland or of the first minister or to suggest that the first minister had cast doubt on the continued funding of the monarchy”.

He said: “As we made clear at the briefing, Scotland contributes in many ways to the Treasury’s consolidated fund – out of which the sovereign grant is paid.

“We said explicitly that to imply Scotland would not pay for the monarchy was simply wrong and we accept unreservedly the assurances of the Scottish government that the sovereign grant will not be cut as a result of devolution of the crown estate.”

If the palace hoped to divert attention from the meagre sums given by Treasury to support the royal establishment or the disgraceful state of Buckingham Palace, they probably succeeded.  But someone twigged that they had gone too far  Hence the retraction?

   

Game theory

The London press remains obsessed with Nicola.  CityAM believes in a conspiracy theory:

,,, there are differences between Scotland and Greece. The Scots, for example, have shown themselves to be much more adept practitioners of the esoteric discipline of game theory. Yanis Varoufakis, former academic turned Greek finance minister, specialised in the subject. A sound knowledge of game theory can often be very useful. Chris Ferguson, for example, winner of no fewer than five World Series of Poker championships, teaches game theory at UCLA. The deluded Greek Trotskyist, however, seems to have convinced himself that his theoretical knowledge would give him a decisive advantage in the negotiations with the Troika of the IMF, the ECB and the European Commission. But he seems to have forgotten that the purpose of playing a game is to win.

...

Nicola Sturgeon and David Cameron have manoeuvred themselves into a lucrative strategy of co-operation. The game began during the election campaign. The SNP needed to destroy Labour in Scotland. They trumpeted their intention to help Ed Miliband get into Downing Street. The Conservatives seized on this and used the SNP bogeyman to frighten the voters in marginal seats in England.

The game goes on. Cameron needs to make some concessions to Sturgeon so she can boast about them to the Scottish electorate. But the SNP also needs to maintain a set of grievances, which is the party’s raison d’etre. Neither side actually wants to redress them, so that both continue to gain and keep Labour out. Practical politicians are often much better game players than so-called expert theorists.

Rather fanciful, I would suggest ...

 

Music of the week

Pedantry up with which we are prepared to put

At last. somebody has made a stand for proper grammar:

Michael Gove, the justice secretary, has issued his civil servants with detailed orders on using good grammar, two years after he circulated similar “golden rules” to officials in the Department for Education.

The senior cabinet minister has wasted little time since his appointment after the general election in telling his staff how he wants them to draft letters and briefing papers.

The instructions tell officials to write “make sure” instead of “ensure” and to avoid using the word “impact” as a verb. He is also unhappy with the use of contractions, such as “doesn’t”, and the deployment of “yet” and “however” at the beginning of sentences.

About time, too.  There's far too much slipshod writing around.  And things have been getting worse in recent years.  However, I don't suppose it'll make much of a difference ...

 

Quote of the day

Are we reaching the end of the line?  Or is a twelfth hour deal on the cards?  The Guardian speculates:

So what might the deal look like? The usual can-kicking exercise, in all likelihood. In Brussels, the talk is of Greece being prepared to offer some compromises on pensions and tax in exchange for enough money to meet its immediate needs, along with the promise of debt relief later provided it sticks to its reform programme. This would resolve little. Greece’s economy will continue to struggle, the government will go slow on reform, and its bailout money will be depleted. Tickets for the new autumn production of the drama will shortly be going on sale.

 

The Pilton-Moldova Connection

The biggest bank robbery in European history?  $1 billion nicked from three Moldovan banks?  With the involvement of limited partnerships based in an Edinburgh housing scheme (not usually noted as a centre of financial expertise)?

The BBC has part of the story:

According to the Kroll report, based on Moldovan National Bank records, the equivalent of $498m in loans was transferred to three Scottish limited partnerships.

All have partners registered in offshore tax-havens, and all allegedly deposited the money in a single bank in Latvia.

Meanwhile the collection rights to those loans - and to others made to companies registered in Northern Ireland and Hong Kong - are said by Kroll to have been acquired by another Scottish limited partnership - Fortuna United LP.

The total sum owed to Fortuna United is $1bn - equivalent to the complete proceeds of the alleged Moldovan bank fraud.

But, surprisingly, the partnership shares an address with 420 other companies - including 258 other limited partnerships - at a flat in Pilton, the district of north Edinburgh famous as the setting for "Trainspotting", the novel about heroin addicts.

Extraordinary stuff.  Where can I get hold of the movie rights?

 

Timeo Danaos et dona ferentes

Down to the wire; The Guardian reports:

... the chances of a Greek default are now higher than they have ever been. The IMF called its negotiating team home from Brussels last week because the talks were going nowhere. Attempts to get them going again were abandoned on Sunday after less than an hour. The rhetoric has become angrier and angrier as positions have hardened.

Normally, the choreography that precedes a euro fudge would see the two sides edging closer together. The officials that prepare the ground for a deal would be piecing together 90% of the final agreement, leaving ministers the other 10% to haggle over on Thursday. That does not appear to be happening, which is why both sides are preparing for a default.

Can it be prevented? Yes, but it would either require the troika to moderate their key demands on pensions, tax and labour market reform, or for Tsipras to cross his red lines on the same issues. Neither looks likely.

Even so, it is difficult to believe that they will not cobble together some kind of agreement that will allow the can to be kicked a little further down the road.

   

Music of the week

La nostalgie de la boue:

Quote of the day

From The Spectator (here):

David Mundell, the somewhat improbable Secretary of State for Scotland, had at least one good line yesterday: “The SNP are asking for something they don’t really want, but of course they will complain if they don’t get it.”

     

Blackmail?

CityAM reports:

HSBC moved a step closer to leaving the UK yesterday, piling pressure on chancellor George Osborne to take action to persuade the bank to stay.

Chief executive Stuart Gulliver set out details of HSBC’s review of the location of its headquarters, looking at 11 different criteria, including taxes, the government’s attitude to finance, and the stability of the economy and regulatory environment.

I trust that Chancellor Osborne will tell them to bugger off if that's what they want to do.  Does HSBC really wish to entrust itself to the tender mercies of the New York regulatory authorities?  And a move to Hong Kong would bring it under the aegis of Beijing, hardly an improvement on London.  Furthermore, given their sanctions-busting, money-laundering, tax-avoiding history, who would want HSBC on their patch?

Better than expected

The way it's going to be

The Guardian's report of yesterday's debate on the Scotland Bill:

We’re giving you everything you want and more, Mundell [Secretary of State for Scotland] reiterated time and again. “We will be implementing the Smith Commission in full.” Scotland would be God’s paradise on Earth, a land of milk and heather where anything Holyrood wanted, it could have – except the bits it couldn’t.

For some reason, the SNP members were disinclined to take him at his word and frequently interrupted him. “Isn’t it the case that the bill would allow the UK parliament to veto anything Scotland did that it didn’t like?” asked Peter Wishart.

“Heavens no,” sobbed an utterly distraught Mundell. “The word veto is such an ugly word.” And he only wanted to speak in happy, fluffy words. “There is no veto. Just a right to disagree so strongly you can’t do it.”

Up stepped Alex Salmond. “The Scottish Daily Record argues that the proposals go nowhere near to implementing the Smith Commission,” he said. “They do, they do,” Mundell replied, “But even if they don’t, then that’s why we’re having the debate so you can make some amendments."

Difficult to imagine Mr Mundell sitting in cabinet.  He is the living proof of the Peter Principle.

 

Music of the week

Why the World Cup went anywhere other than England

The Sunday Times reports:

One thing has become very clear from the scandal engulfing Fifa. England is simply not punching its weight when it comes to handing out bribes. When we were bidding for the World Cup, the most our lot could manage was to bung the wives of the crooked and thick-as-mince delegates a few Mulberry handbags.

...

Our bribes were so half-hearted it makes you ashamed to be British.

I think he means English ...

   

Round and round the mulberry bush

The BBC's Peston casts an interesting light on the Greek demands for a bailout (my emphasis):

Greece desperately needs those few billions of euros to pay its maturing debts to... the IMF and the European Central Bank.

With 300m due to the IMF on Friday, and a further 1.3bn euros later this month, this has always been a row about book-keeping entries and the accounting treatment of debts.

It is a dispute about whether the eurozone's creditors will release funds so that they can pay themselves and avoid having to call Greece in default.

Or to put it another way, it is all about whether the IMF and eurozone can keep up the pretence that Greece is a sound and solvent debtor.

But doesn't it normally tell you something pretty important about those who owe you money when you have to lend to them so that they can keep up the payments to you?

History suggests that at some point the IMF, ECB and eurozone will have to recognise that Greece's 320bn euros of sovereign debts is a lot of spilled milk that will have to be cleaned up.

I rather doubt if our teutonic friends would see the matter as essentially about book-keepiong and accountancy.  For them, it is a question of moral hazard - the Greeks have been naughty and must be punished.  But, as Mr Peston points out, it is difficult to see a way out of the impasse without some element of debt forgiveness.