30 November, 2010

The World Cup

There is talk that an investigation by British television reporters into alleged corruption in F.I.F.A. (Fédération Internationale de Football Association - why does it have a French name?) may lose Britain the opportunity to stage the World Cup in 2018. You might have thought that they'd be grateful to our chaps for rooting out corruption in their ranks, however no: they don't like being investigated, you see.

Why on earth didn't we think about this at the time of being awarded the Olympics? There is massive corruption in the International Olympic Committee and our journalists, with a bit of pot-stirring, could have saved us billions of pounds and got the thing won by the French.

'You cannot hope to bribe or twist
Thank God! The British journalist
But seeing what the man will do unbribed,
There's no occasion to.

(Humbert Wolfe)

Picasso and the electrician

Call me old fashioned, but I had thought everyone paid their electrician with modern art. What else is there to do with the stuff?

'Rewire the garage, mate? Couldn't do it for less than a Chagall or a small Modigliani sculpture, much as I'd like to'.

29 November, 2010

The Euro

We had the Irish bailout on Sunday night, and it was no surprise, at least to me, that the euro fell against major currencies on Monday morning. The European Commission and the European Central Bank seem to be living in a world of their own.

First, announcing major events on a Sunday night. This is the clearest sign of desperation. Assuage the markets before Tokyo opens, in the hope of a bit of good press. Naive.

Second, they then all sit back and assume the problem has gone away, just as they did with Greece.

The nature of markets is this: if everyone knew, for example, that the dollar was going to fall, you wouldn’t make any money selling it. To make money you have to be the first, and this means constantly testing the accepted structure, just as the markets did against sterling and the lira in 1992 until the markets won and the status quo lost. It may not be tomorrow or next week, but it is clear, now the scare is out there, that the markets will have a tilt at Portugal, Spain, perhaps Italy.

The only way to prevent this is to have a long term plan. I wrote many months ago that the Eurozone either needed a procedure for a country to leave it, or it needed a procedure for allowing a country to default. At present there is neither


Some quarter of a million US diplomatic cables have been published on the Wikileaks website. I can’t be bothered to look: the news that the Saudis (Sunni Muslims) don’t want the Iranians (Shi’ite Muslims) to have a nuclear bomb is hardly earth shattering. Nor is the information that Mr Sarkozy is thought a bully and Mr Cameron is considered lightweight.

The cautious, correct, conservative press is outraged. Some B-list opinion former on the radio described Mr Assange as a traitor. Here is The Spectator: ‘Just ask yourself a few questions. Will the West be safer if the Saudi leader cannot trust that a conversation he has with a US envoy will remain secret?...’

Let’s deal with this. The diplomatic cables were sent and received, and then the US put them all on to a giant intranet. They were not labelled ‘Top Secret’ but merely ‘Secret’. The number of people who had access to them from this intranet was in excess of 2.5 million. Two and a half million people could look at this information. And yet the USA is shattered, outraged, that one of these 2.5 million leaked the stuff.

So in answer to the question, a Saudi leader is now at least aware that any conversation he has with a US envoy is not going to remain secret, and is going to be far more cautious, and the world is thereby going to be far safer, with this knowledge.

Far from being a traitor, Mr Assange has done the world a favour. Only a couple of years after the USA threatened to stop sharing secrets with Great Britain on the grounds that it couldn’t be trusted, we now find that it has been spraying its – and our – secrets around the ether without the least care. And it is horrified when they become public.

Grow up is what I say.

27 November, 2010

The Met Office

The British Meteorological Office, a largely discredited body ripe for cost savings, has predicted that this year will be the warmest on record. They may be right – a broken clock is right twice a day – but I would point out we are still in November and the snow has arrived earlier than for many years.

The Met Office predicted that 2003 would be the hottest ever (and of course it wasn’t) then that 2007 would be (nope). The hottest year on record is still 1998. Twelve years ago.

As Michael O’Leary of Ryan Air pointed out: " it is absolutely bizarre that the people who can't tell us what the ******* weather is next Tuesday can predict with absolute precision what the ******* global temperatures will be in 100 years' time."

Benefits for all?

Quite a sensible suggestion from lapdancing bar owner Peter Stringfellow about the British winter fuel allowance. He said from his home in Majorca (yes, they are quite happy to send it to pensioners living in Majorca) that he had been trying to give it back without success. He is, of course, a multi-millionaire and doesn’t need it, but they send it to multi-millionaires as well.

The answer, says Stringfellow, is to get you to tick a box saying if you want it. Simple.

Let’s now hear from Mr Duncan Smith.

26 November, 2010

German Conscription

For me it is something from the 1950s: the idea that young people should be forced to serve in the army.

Conscription ended in the USA in 1973 (they had Vietnam) and in Britain in 1960, but it has been kept on in Germany, alone amongst the major European countries.

Military commanders have always thought it was a waste of time training reluctant, unfit recruits and there were serious doubts about whether they would actually fight if the time came. And social liberals like me always believed it was merely a way of keeping the young under control. Now it is to be scrapped, the excellent Karl-Theodor zu Guttenberg calling a halt to it by 1st July, 2011.

An intresting statistic is that more than 40% of draftees were turned away on health grounds.

25 November, 2010

Your money in their hands (No.361)

It isn't a new phenomenon; however tough a politician might talk when he is out of office, give him power and he becomes the usual, statist, big government type. They can't resist it.

With Mr Cameron it seems the change has been swifter than with most. He enjoys power and whilst talking about cutting expenditure, can't resist lavishing a little moolah on a pet project.

Cameron's latest idea is to spend several million pounds of the taxpayers' money creating a happiness index. The way to judge this is to guess what will happen to the calculations if they come out wrong, if Mr Cameron's corporatist, eurobureaucracy-friendly, social democracy sucking mish-mash of a government in fact makes us more unhappy (that's certainly the effect it is having on me). The index will quietly disappear.

More likely the creators of the happiness index will decide what is likely to happen and design the index to give a positive result, just as Gordon Brown defined child poverty in terms of it being something he could cure with a simple, planned tax reduction.

They're all the same.

24 November, 2010

Royal Wedding

Politicians just can't resist trying to look generous towards us at our expense. When sometimes they give us back some of our own money they make it look as if it were their money being handed out to the people. Mr Cameron's latest fit of pseudo largesse is to grant everyone in Britain a bank holiday for the royal wedding.

People who carp at the £50m cost of this wedding might care to reflect that each day the UK earns around £3.5 bn. Of course you don't have to give up work for a day but most will do so, and of course we don't earn nothing on days when no one goes into work: my bank will still be earning from me even when it is closed by paying next to nothing on  my money; and since people have to eat on a bank holiday they'll buy more food the day before.

It should also be said that since this 'free' holiday comes between Easter Monday and the communist 1st May holiday, many people will decide to make what Italians call the bridge: you can go away for 11 days at a cost of three days' holiday. Indeed, getting away from the televised schlock this is likely to be seems like a good idea.

One paper estimates the total cost to the economy as £5 bn, which makes the £50m look fairly good value.

22 November, 2010

20 years on

It is twenty years today since Mrs Thatcher resigned. It was one of those 'where were you when President Kennedy was shot' moments. For myself I was driving down the M4 motorway and nearly crashed. I hadn't realised the Conservative Party could be so stupid as to ditch a winner, or so nasty. As Charles Moore said, if she was failing she should have been allowed to fail at the ballot box.

Within two years John Major's pro-European policies had brought Britain to its knees. We had to leave the Exchange Rate Mechanism, the pound collapsed and interest rates went through the ceiling. Since then we have had five lame duck years of John Major, the duplicitousness of Tony Blair, the insane spending spree of Gordon Brown and the cheating David Cameron accepting your vote and changing his policies afterwards.

What a crew!

Going off at half cock

Far too much in the media about what the Pope may or may not have said to a German journalist about the use of condoms. Publication date is tomorrow and it might have been better to wait and read the interview. But as usual the press grasped at any sensationalist straw it could. At first it was reported that Benedict was happy about the use of condoms. This was doubted by the BBC's veteran reporter David Willey, who said correctly that such a major change in dogma would hardly be revealed in one of the back pages of the Osservatore Romano (not Osservatero, as the BBC News channel pronounced it).

Then it was reported that he had said condoms were OK under certain circumstances. Now it appears that the circumstances are for sex between homosexuals because it was not interfering with the making of a new life.

Next the old boy will be criticised for discriminating in favour of gays, since they are allowed condoms and heterosexuals not.

A good rule of thumb is that if you don't know what the story is, don't report it.

20 November, 2010

To reign over us?

A lot of hoo-ha in the press today about Prince Charles saying Camilla might become Queen (as his consort).

Most of this is a throwback to the Princess Diana mania which gripped the nation in the couple of years after her death, but which has fortunately died down.

My advice to people who have a problem with this is to go into your nearest primary school and ask the assembled children what the wife of a King is called.

The wee frees

Startling news from Scotland. The Free Church of Scotland has decided to allow music (music!) and hymn singing in its churches.

It reminds me of the story of a ‘wee free’ minister being asked what the Church thought of sex. He replied that on balance they were against it, on the grounds that it might lead to dancing.

19 November, 2010

The House of Lords

Another clutch of semi-celebrities, time servers and political donors are appointed to the ermine. More Conservatives than Labour, of course, because last time there were more Labour than Conservatives. See?

Now there are 700 or so Lords and Ladies, more than there are elected MPs. They have little or no constitutional or moral standing, appointed as they are by politicians. They can't (and shouldn't be able to) override the elected house, so all they can do is make suggestions, a task which could be done by civil servants.

This system desperately needs dragging at least into the last century. I know the government has a lot on its plate but I should have thought it was now urgent.

The only appointment which pleased me was the elevation of former MP Michael Lord, who becomes Lord Lord.

18 November, 2010

Signs of the times (374)

Ian Dale reports that two convicted murderers in America, Edmund Zagorski and Ralph Baze, were seeking a judicial review of Business Secretary Vince Cable's granting of an export licence for sodium thiopental, a drug used in executions.

Expensive business, a judicial review. How are they paying the lawyers? Easy: we grant them legal aid. The taxpayer pays for the foreign murderers and for the defence of the politician.

How could we make a saving here?

Signs of the times

An American couple, Pete and Alisha Arnold, have set up a website www.birthornot.com to ask for readers’ votes as to whether they should abort their unborn child, which is, apparently, perfectly healthy.

They have uploaded scan images to the site. The unborn child has been nicknamed ‘Wiggles’.

In inviting your vote, the site says ‘By voting on whether to continue or abort an actual pregnancy, you are doing so much more then simply telling an elected representative your feelings. You are actually changing something in the real world.’

Currently the vote is in favour of abortion. Mrs Arnold writes: 'I'm not convinced that I want to change the status quo. I feel that as I age I've actually gotten more selfish and set in my ways.

'I'm afraid that I will eventually regret starting a family and "settling down", as they say.’

It might be that the site is some sort of self-publicity, which would itself constitute a sign of the times. There are claims on it that the pro-abortion vote comes from a 'sick humour' website. Or it may be that people are concerned as to what this couple's reproduction might do to the human genetic stock.

Not the accountants

Most papers report that the money men are arriving in Dublin to see what can be done for the Irish economy.

Of course it's not the accountants, it's the politicians. They will decide (in Ireland's interest, of course) what steps should be taken in return for a bailout (which Ireland says it doesn't need).

Here's something that will be on their minds.

Corporation Tax Rates

Germany 30 - 33%
France    33.33%
Ireland    12.5%

So where would you set up a business? But the Irish say firstly that low tax rates are essential for the recovery, and secondly that one of the things that made them change their minds about the Lisbon Treaty (they were told to vote again, if you remember) was the promise that they could set their own levels of taxation.

If an increase in corporation tax is forced on them, the Irish will feel traduced.

Rightly so, in my view.

16 November, 2010

Thoughts on the engagement of Prince William


Actually this isn’t really going to affect any of us too much, and I guarantee you will be hearing more from the media over the next 6-9 months than you really want or need.

But I do have a couple of thoughts.

Firstly, Miss Middleton is catapulting herself into the spotlight. Not much is at present known about her but that will change. Apparently no one has heard her speak, and it would delight me if she had somehow adopted a Birmingham accent but I think it unlikely (she was born in Reading).

Secondly she is marrying into one of the most dysfunctional families on the planet. Of the Queen’s four children three have been divorced. And the males of the family are famously unable to keep their trousers buttoned up: the Duke of Edinburgh, despite being 89, has a ‘confidant’, Prince Charles married his ‘confidant’. What is the poor girl to expect?

They are marrying in 2011 because the following year will be the Queen’s diamond jubilee, and in April of that year the old dear will be 86. Given the string of occasions when she has been ‘poorly advised’ (which is what we say when she had made a complete fool of herself, see here) it is high time she abdicated. That way Charles would become king, which would make it constitutionally impossible for him to do what he does at the moment (interfering), and Miss Middleton would become Princess of Wales, at the age of 30, which is quite late enough.

Thanks Ma’am, but goodbye.

The future of the euro

Well, what are they going to do?

A look at the recent history of the eurozone does not make happy reading.

When Greece suddenly admitted it was bust it seems Eurozone leaders were caught on the hop. An all embracing package was quickly put together with the Eurozone contributing €440 bn. This was supposed to be so large, particularly with handouts from the IMF, that it acted like America’s ‘Shock and Awe’ military strategy. Two unfortunate things then happened. The first was that Chancellor Merkel had to explain it to the German voters who seem to think - imagine this – that the Greeks are idle, dishonest and overpaid.

The second thing that happened was Ireland. The Irish banks fuelled a property boom and when the bubble burst were insolvent. They had to be guaranteed by the Irish State which is now itself insolvent.

I often complain about the knee-jerk reaction in Europe that any problem can be solved by more regulation. But the first thing a regulator needs to have is market knowledge. In Britain this was held by the Bank of England which spoke regularly to the banks on its patch and knew what was going on in the international markets. That is why it was such a disaster when Gordon Brown replaced it with people who had no idea. What was the Irish Government doing, while its banks piled up their balance sheets with dodgy property lending? What was the European Central Bank doing? They must have had access to the figures – the banks have to publish their accounts. The problem wasn’t that nobody did anything, it is that the people who might have done something didn’t know what was going on.

The coming together of the two problems – Ireland and the German voter – forced people to start admitting the existence of the elephant in the room. I posted about it on Nov 2nd. Merkel needed to reassure her voters and said that of course if there were another bail out the bond holders would have to take a haircut. That meant that a country (Ireland) could be permitted to be actually going bust and not paying its creditors. And it seemed fair: why should investors be allowed to buy high yielding Irish debt confident in the knowledge that those hard working Germans would rescue them if anything went wrong?

But it was something better left unsaid. Investors, naturally, priced Irish debt even higher, because of the risk of not being repaid in full. The Irish borrowing rate went up to 7% when I last posted and upwards to nearly 9%, which Ireland can’t afford to pay, so it is more likely to go bust.

So what will they do, the Irish, the ECB and the Germans?

One problem is that lack of market confidence is contagious. The ECB knows that Portugal, Spain and perhaps Italy are waiting in the wings. Another is that this is going to get worse. German productivity is so much greater than in the peripheral countries that the wealth gap will widen.

Chancellor Merkel said yesterday that ‘If the euro fails, Europe fails’ – somewhat hyperbolic, but it might reassure the markets that there is some determination to resolve this. The only thing which will satisfy the German taxpayer is if failing economies are properly supervised. That means a loss of sovereignty: their budgets will be imposed by the ECB. Ireland doesn’t like the idea, and who can blame them?

So we are in the ridiculous position of countries being forced to accept handouts whether they like it or not, and the creeping shadow of what in truth was always going to happen: monetary union leading to political unification under the hegemony of Germany.

14 November, 2010

Those aircraft carriers

The Italian financial paper Il Sole 24 Ore reports that as part of a budget reduction programme the USA is considering cancelling the Joint Strike Fighter.

This means that not only will our aircraft carriers have no aircraft for ten years, but they won't even have any then.

Perhaps we could borrow something from the Chinese.

The Queen and democracy

David Laws, lest we forget, fiddled £40,000 from the taxpayer which he paid to his homosexual lover presenting it as rent for a room in his house. Laws resigned, but apparently will get a senior government post soon. Just the sort of chap we want running the country.

Anyway, Laws has used his six months off to write a memoir of the events surrounding the formation of the coalition between Conservatives and Liberal Democrats. In it he is reported to have said that The Queen connived with Mr Cameron and Mr Clegg at keeping Gordon Brown in office while they stitched a deal together.

And stitched is the appropriate word. The electorate was stitched up, as the two men decided on policies which were not present in their manifestos, without deigning to consult the voters. Her Majesty appears to have been fully informed as to what was going on, favouring undemocratic rule by the political class above the traditional system of the people deciding how they are governed.

There is something quite, quite rotten here. Buckingham Palace has some explaining to do.

The release of Aung San Suu Kyi

I don’t really know what people are expecting from the release of Aung San Suu Kyi. She leaves her house to enter a country still under the grip of the generals. They can even say that there has recently been an election, which they have won. Despite several foreign leaders having stated publicly that it was rigged, this may still carry some weight inside the country, which doesn’t have a free press either, and in China, which doesn’t have free elections either. India has already said that it accepts the result, an astonishing thing for a democracy to say, in particular one which aspires to positions on the world stage.

But if India and China have not covered themselves with glory in this matter, nor has the west. We saw fit to invade Afghanistan and Iraq because we were unhappy about what was going on there, leaving Aung San Suu Kyi to her fate. I once heard her, in one of the few interviews she has given, being quite disparaging about the West. She doesn’t like the consumerism and profit motive which drive us.

So when Western leaders queue up to be photographed with her, as they did with Mandela, they may find some reluctance. She will know why they are doing it and may not be interested in what we have to offer.

11 November, 2010

Nov 11th

I don't attend war memorials but every year on this day I do try to have a think about it all. When I was young the First and Second World wars were in the past, Korea and Vietnam were other people's wars.

Now Tony Blair's forays into military adventure have made it all a bit more real. The Afghan war has gone on longer than WW1 and WW2 together.

I yield to no one in my admiration for Britain's armed forces but sometimes, on this day, I wonder if it wouldn't have been preferable to have been good at something else.

News from the madhouse

I don’t suppose it will come as a surprise to anyone that the EU auditors have refused to sign off on the accounts. This is the seventeenth year running. We do know that a Hungarian company received £350,000 for a dog hydrotherapy project (that isn’t an adjective, its a hydrotherapy unit to improve the lifestyle of dogs), that £4.5 million was spent on a fleet of limousines in Strasbourg (there is already one in Brussels) and that EU officials spent £4.4 million on a cultural centre for themselves. Of course all this is as nothing to the usual fiddles. Millions are spent on persuading people not to smoke, and more millions are spent on subsidising tobacco crops in the EU. The fiddling of agricultural subsidies, particularly in the South, is nowhere near being tackled. Each year the propaganda publicity budget increases by millions, so we are paying them to tell us how wonderful they are.

It has got to stop and the only way it is going to stop is if countries refuse to pay in their contribution unless the accounts receive a proper audit certificate.

In other news President Rumpy has declared that euroscepticism leads to war – opting for the nation state rather than his corrupt bureaucratic madhouse apparently means Nazism. This would be news if we hadn’t heard it so many times before and it weren’t such a discredited old chestnut. Norway has never declared war on Portugal, Switzerland has never fought Hungary, even though these two countries are not members of the EU. Britain has a rather prouder record of fighting Nazism than Rumpy’s home country Belgium.

In fact Britain could leave the EU easily and peacefully. The Common External Tariff is down to 4% and the World Trade Organisation would prevent EU countries penalising the movement of British goods (which they wouldn’t do because they sell more to us than we do to them). We would save massively on regulatory cost – more than any conceivable tariff - and not have to shell out on infrastructure projects such as useless roads in Slovenia and the attendant corruption. We would no longer be subsidising France’s farmers or Italy’s mobsters or social clubs in Belgium.

And more than anything else we would return to being a self-governing democracy. Our elected parliament would actually mean something and the executive would be accountable to the people (Rumpy's army of overpaid penpushers is accountable to no-one). None of this means we would also attack Belgium. We would tolerate them, as we do now.

The case for Britain leaving is growing and more and more are supporting it. I think Rumpy is rattled.

10 November, 2010

Ratings Agencies

I mentioned, not for the first time, back in April, that a large part of the financial bubble before it burst was caused by the ratings agencies who grade each investment. You will recall that a lot of these new financial products were rated AAA until overnight they were found to be worthless.  Incredibly, the ratings agencies are paid, not by the people who make use of the rating (the investors) but by the people borrowing the money.

Nothing has changed since the bubble burst. The delightfully named Banco Espirito Santo has fired its ratings agency, Fitch, for reducing its rating from A to BBB+. The bank's spokesman said the move 'does not reflect the financial soundness of the bank'. But who would possibly believe him?

Sign of the times

Headline in the Daily Mail: 'Teenagers who text more than 120 times a day are more likely to have had sex, use drugs and drink alcohol'.

Makes you wonder how we did these things before mobile 'phones were invented.

Cameron in China

Ah! The joys of a command economy. The Chinese feel they have to offer some crumbs to nice Mr Cameron who has come all this way, so they tell one of their airlines to order a few of those engines which keep blowing up. I bet that's just what the airline management wanted.

And then there's the abuse. British Prime Ministers have to go to China with their begging bowl and then have to voice some criticism of China in order to keep their own side happy. It must all be agreed diplomatically.

'So, you take some of these bum engines and we'll say you are a murderous regime which imprisons the Chinese nation and has cruelly invaded Tibet. That OK? Oh, not OK. So can we say that we have discussed human rights and whilst some critics might imagine there may be some room for improvement the meeting has been very friendly? Thanks Mr Hu. Nice doing business with you.'

The Chinese must think we are appalling hypocrites. We are appalling hypocrites. We could stop human rights abuse in China by simply getting together with other nations and refusing to buy Chinese products or invest in their country. We won't be doing that, so it might be better to shut up.

09 November, 2010

Keeping them busy

The Brown years found government departments beset with targets. Some say they keep the public sector focussed, others, such as critics of the Mid Staffordshire NHS Trust, where patients were allowed to die as long as the targets were met, think they distract people from their jobs. But here is a new one, courtesy of Paul Waugh of Politics Home:

The Home Office's plan to end targets by October 2010 is listed in their business plan as 'overdue'.

They have missed their target to get rid of targets.

08 November, 2010

Obama in India

I may have misheard but I thought Obama said 'Greetings to the world's largest democracy from the world's oldest democracy'.

I hope I did mishear and that he was just mumbling (for someone famed as an orator he seems to me to have an unusually staccato delivery, as if he had been to the George Dubya school of public speaking). Of course America locked up its aboriginal citizens in reservations in the 19th century and black people couldn't vote until the 15th Amendment in 1870. Even in the 1950s blacks had to give up their seats on buses. No, Barack, I think not.

Anyway Obama has said he wants to see India as a permanent member of the UN security Council. This blog is in favour of such a move but some say Obama's plan is to have a single seat for Europe. My advice to Indians is not to hold your breath.

07 November, 2010

The BBC strikes

It is said that the recent strike at the BBC by the National Union of Journalists, over proposed changes to the pension scheme, will be the first of many. I hope not, because like many people I am reliant on the BBC and I get very bad tempered when it is not available.

I suppose these people are right to strike if they feel short changed by the management, but in these straightened times they should not expect to suffer less than millions of private sector workers. Companies can no longer afford final salary pension schemes, and if the private sector can’t afford them we shouldn’t give them to the public sector.

The problem the strikers have, I think, is with public perception. Whilst our firemen are lazy and overpaid, and most of their work has nothing to do with putting out fires, there is a certain public sympathy with people who sometimes put their lives at risk.

By contrast no one believes BBC employees are under-remunerated, irrespective of whether they are or aren’t..

These days there are private sector alternatives, such as Sky and Al Jazeera. The BBC will lose market share because of the strikes, but since there is no profit motive the workers won’t notice.

The customers will.

Entartement returns

The happy news reaches me that André-Joseph Léonard,  the Archbishop of Mechelen-Brussels and Primate of all Belgium (got to love the title) has had a custard pie pushed into his face during an All Saints Day mass.

This process, known in French as entarter, seems to have died out a bit, which is a shame. Its principal protagonist, also a Belgian, was Noel Godin, who said he did it to pompous public figures. He is reported to have entarté the philosopher Bernard-Henri Levy four times.

Léonard's entartement seems not to have been for pomposity but for his views on homosexuality.

Nevertheless, I hope this is the first of many.

04 November, 2010


Il Messaggero, the Rome newspaper, reports on yet another young lady who cannot keep her hands off ...er... politics.

Nadia Macrì, 28, has told a judicial inquiry in Palermo that she had paid sex not just with the Prime Minister (the usual) but also with the Minister of Public Administration.

However, while she claims to have received €5,000 from Mr Berlusconi, she says she charged Mr.Brunetta only €300. The reason for the difference between these two figures has not been made clear.

Whether Miss Macrì is telling the truth or not, and there appears to be some doubt in the minds of the Inquiry (which is into a prostitution and drugs ring), Berlusca badly needs a diversion: these revelations are no longer shocking, they are getting dull.

QE2 and the ship of state

Other strange goings on at the American Federal Reserve. QE2, which most British people thought was an ocean going liner, means a second round of quantitative easing: printing money and stuffing it into the economy. The Americans have just agreed to print another $600 billion.

The question to be asked – and I think the danger of over-complication here is greater than the risk of over-simplification – is ‘Where is it?’. Where is that money? We printed it (Britain printed another £200 billion) and bought assets from the banks. What had happened is that banks were charging companies and people too much for loans because of the increased risk in hard times, so the real rate of interest, that paid by you and me, was too high. So we stuffed them full of money to bring the rates down and get the economy moving.

But we keep hearing from Mr Osborne that bank lending to companies is insufficient, so where is the money we stuffed into them to improve things?

There is a real danger that politicians follow the public mood to increase regulation over the banks and then the banks use the QE billions to prop up their own balance sheets – a second round of rescue, but from a problem caused by the regulators.

And this is not the only danger from QE. Even if it works, this money is going to have to be mopped up again or it will cause severe inflation. I think we are already seeing inflationary roots growing in Britain and we will be reliant on the skill of the central bank in picking the right moment to do it: to raise interest rates before the inflation becomes unconquerable except with more pain. With America there is the added problem that this money might well find itself flowing into China, India and Brazil causing overheating there.

QE is medicine with side effects and it fills me with dread. The first dose might have helped us. The second might be fatal.

Obama: Anonymity Knocks

Strange happenings in the Home of the Brave.

First Obama. Most American Presidents are a bit of a compromise, a tendency one way or the other, an unexpectedly strong candidate from a weak party (Clinton’s second term) or an unexpectedly weak candidate from a strong party (both Bushes). But Obama was something else, a firework. I was wrong, in that I thought he would burn out during the primaries, but he kept on and on.

So in this sense I am not surprised at what is happening to him, only at the scale and swiftness of the voters’ response. Some people seemed to be predicting an even worse disaster – losing both the House and the Senate – but that seems to have been expectations management. As it is, Republicans will begin to take over the House committees and it will be harder to get things done. Few would have guessed that Obama would arrive at the next election looking a bit irrelevant, but that is now a possibility. He needs a Bay of Pigs moment.

Of course expectations management is what went wrong for Obama: people expected too much. The crisis was not his fault, indeed the seeds were sown by Clinton, who cancelled the enforced separation of investment and commercial banking (the Glass Steagall Act) and made the mortgage companies underwrite home loans to people who couldn’t pay them back.

But now the Americans have turned against Obama because they resent the difficult times they are gong through on his watch: they expected too much of him and now they are disappointed.

This isn’t an unmitigated disaster for Obama, that would only be if the Republicans started to unpick his healthcare reforms; but it is strong political lesson on how fragile a thing a reputation can be.

03 November, 2010

Ruby again

The latest on Rubygate: Miss Rubacuori, who certainly doesn't seem to be shy, has said she would celebrate her 18th birthday with a cake decorated with 'Bunga-bunga', and criticised the Premier for letting just any tramp anyone into his house 'He can't expect discretion from people he doesn't know'. Love it.

The great man has replied to his critics 'As always, I work without interruption and if occasionally I happen to look a beautiful girl in the face, it's better to like beautiful girls than to be gay', a statement I believe no other western leader would have dared utter.

Sometimes, just sometimes, I wish that other countries could share the Berlusconi experience (the nearest the Brits have is the Duke of Edinburgh). I think the Italians would like to share him out a bit too.

02 November, 2010

Silence is golden

Harry Redknapp, a football manager, is threatening never to speak to the press.

Yes pleeeeease, Harry.

European debt

In my post yesterday I warned that highly indebted countries on the European periphery would find it more difficult to raise money if new plans for restructuring went ahead.

Before the scheme is implemented, just on the announcement of what the Germans wanted, Irish debt became nearly a quarter of a percent more expensive. The Irish now pay more than 7% whereas the Germans pay 2.5%. Just yesterday's rise - as I say, while it is still a vague announcement - meant around another €1.50 a week per family in debt service.

The captive electorate

David Cameron is said to be 'furious' that the Government is being forced to allow prisoners the right to vote.

Wet, wet, wet. He's Prime Minister, for God's sake. If he feels strongly he should do something, and the obvious move is to amend the relevant legislation, the Human Rights Act, withdrawing from this wishy washy world where judges can declare almost anything to be a human right. Chuck the whole damn European Socialist-inspired Declaration of Human Rights in the bin and replace it with British legislation for the British people.

Cameron's excuse for not promising to get rid of the HRA was that it would send the wrong signal to the world. Believe me, Dave, your average African dictator couldn't care less about what goes on in Britain, as long as he can imprison his opponents. And what signal has this daft wish list sent to China? They must be laughing their heads off while they imprison the bloggers and dissidents.

This follows Cameron's craven climbdown on the European budget. At the next election the voters might decide that they would prefer someone with balls.

In the meantime we can reflect on how the candidates are going to try to attract the votes of this new constituency.

01 November, 2010

Silvio and Ruby

The next utterly predictable piece of news is that Silvio Berlusconi has got himself in trouble again. With a girl of course.

This time it is a 17 year old Moroccan belly dancer named Karima Keyek whose stage name, Ruby Rubacuori, means Ruby, stealer of hearts. Rubygate, as it has come to be known, has hit the press fairly large.

There is a number of elements to Rubygate. Initially it was said that Berlusca had consensual sex with the girl, but she now says not: he gave her money, yes, but ‘he acted like a father’ (this is going to be bad for the great man’s reputation: no Italian wants it said that he acted like a father to a girl). Next she describes parties at Berlusca’s villa which ended in orgies (so called bunga-bunga parties, after a joke which I cannot repeat here). At one of these she says she sat next to him and he gave her money. Further, it is alleged that she was arrested in Milan for allegedly stealing 3,000 euros but that Silvio intervened with the police, saying that she was the grand daughter of the president of Egypt (honestly, I'm not making this up), and she was released. This is the one that Bersani and the opposition will try to run with.

It is also said that there is a problem with Ruby’s entry papers (she hasn’t got any).

In ordinary times, the indivdual elements of Rubygate would be eminently forgettable. But in Italy people are feeling the pinch of the recession, and it looks (correctly) as if Berlusconi hasn’t done enough to help them. Together, they constitute a scandal. Fortunately for the PM, the opposition seem incapable of mounting a forensic analysis.

Silvio will restore some of his flagging popularity by intervening in the Naples rubbish issue, but ultimately he will only save himself by looking like a proactive promoter of Italian interests, like a man who has the interests of his people at heart. So far, he hasn’t done nearly enough.

EU negotiations: the usual

Well, the first piece of news was utterly predictable. Great Britain has been shafted again by the European Union. Childe Cameron to the dark tower came and returned with nothing.

In my last post on this subject I said in conclusion ‘I don't want to prejudge the man [Mr Cameron] but his record to date has not been encouraging. Let's see.’. An anonymous contributor commented ‘By all means pre-judge Cameron. You will be right. He will go for a bit of grandstanding ... then roll over and have his tummy tickled by the eurocrats and his new best buddies in the Liberal party.'

It seems likely that the eurocrats asked for a 5.9% increase in their budget knowing that someone (probably Cameron) would have a go and they have settled for 2.9% which is still far too high.

Then Chancellor Merkel said that she didn’t think a change to the Lisbon Treaty would be necessary – Clause 48 permits minor tweaks – so Cameron has nothing to negotiate with.

What has happened with the proposed change is that so far governments have carried the can when a eurozone economy has started to implode. Now bondholders – people who have invested in Greek debt, for example, confident that those hard working Germans would bail them out – will also have to take a hit. Countries will be permitted to reschedule their debt. The result of this will be that peripheral highly-indebted countries will find it harder to raise money, exacerbating the inequality in the EU. It is only fair, I suppose, but the next mini-crisis will see them hit hard, at a time when the strong euro will affect their exports.

If it is bad for the peripheral countries, it is worse for Mr Cameron, who looks as if he has been out-thought and out-manoeuvred by the French and Germans. There is a strong eurosceptic streak in his party and they are not going to be pleased. His best hope is that constitutional courts in the smaller countries decide they need a referendum.

The Veneto and Friuli

I return from a delightful long weekend away in the north of Italy to find the world awash with problems, but of the usual, predictable variety, of which more later.

We went north of Venice and had delightful weather - roof down on the car, aperitifs, if not dinner, outside. We returned when the weather broke, struggling through horizontal rain and impenetrable fog over the Gran Sasso between Bologna and Florence.

Treviso and Udine are a delight, and Trieste, whilst not quite as sad as Jan Morris makes out, seemed underpopulated for its magnificence. This was the Austro Hungarian Empire's warm water port, and it has struggled to find an identity since the First World War.

They eat well in the north, with excellent game at this time of year and wonderful fish and seafood fresh from the Adriatic. And two really great products: some people dine off a plate of warm radicchio and a glass or two of prosecco.

To any Italian speakers confused by the strange accent, imagine speaking with a Northern Irish accent, the Rev. Ian Paisley saying 'Buongiorno, come va?' (not that the old rogue would have spoken a foreign language in public, even if he were able to).

A highly recommended trip.