News of the Wars

Iraq is now believed to be run by an elusive Iranian general, called Qassem Suleimani. Given that the largely Shia population of Iraq had close ties with Iran, we could have got to this stage without a single pound spent and, more importantly, a single life lost.

The House of Commons Defence Committee estimates the cost to Britain of the Afghanistan war as more than £18bn. There will be chaos when we leave, with the Taliban waiting to retake control.

The Foreign Secretary was reduced this week to saying that Gadaffi could stay in Libya. Of course he would sit quietly and not make any trouble. Before we went in, I urged that it should be explained to the British people what winning would look like and what losing would look like. To me this, along with the outcomes of the other two wars, looks like 'losing'.

America: bust or clever?

The UK Business Secretary, Vince Cable, has said that the most important thing in the world economy right now, more important than the euro crisis, is the failure of the USA to agree a borrowing limit. The only reason he is wrong is that it is so important it is inconceivable that they won't agree. Nevertheless they only have until 2nd August, a week today, before America can no longer legally pay its bills (it was unable economically to pay its bills some time ago).

The debt ceiling has been raised five times since 2008 and is now $14.3 trillion. Next year borrowings will be give or take 100% of GDP, getting on for that of Italy.The story goes that America has bought goods from China, which, not allowing its citizens to hold foreign currency, has taken the dollars off the exporters in return for local currency and the Chinese government has purchased US Treasury bills with the dollars. The US Treasury has filtered those dollars into the economy so people can buy more Chinese goods. The world's biggest Ponzi scheme. So, the story goes, the Chinese could destroy the US economy by selling out of it. Indeed there are stories of China switching some of its investment into euros.

Is it that bad?

Of the current T-bill issuance of $14.27 trillion, around $4.6 trillion is held by government departments, and $1.4 trillion is held by the Federal Reserve system (the various federal banks). So the amount of external borrowings is $8.2 trillion, around 57% of GDP which is high, but around European levels. Of the $8.2 trillion some $4.5 trillion is held by foreigners and of this the amount China holds is $1.15 trillion, some 8% of US debt. Japan holds $900 billion and, interestingly, the UK is the third largest holder at $333 billion. Oil exporters hold $221 billion.  

As Warren Buffet said, all this can go on for a long time but not forever. Would the Chinese sell out? I remember when working for a Swiss bank making a pitch for more business from a fabulously wealthy man and my boss saying 'don't worry, he needs us a lot more than we need him'. So it is with the Chinese: American nationalist fervour leading to a boycott of Chinese goods would leave them starving.

The American crisis will be resolved and the world will keep on turning. But, whatever you think about some people in the Republican Party, they are right to be taking this stand. Obama has embarked on costly wars (while he won the Nobel Peace Prize) and scarcely costed social reforms. As Buffet said, it can't go on for ever.

Evil in Norway

The confessed killer in Norway, Anders Behring Breivik, has been in court for his preliminary hearing, in private. The judge appears to have said it was for security reasons. I wonder.

There is a movement in Norway for keeping the whole trial in camera, on the grounds that Mr. Breivik might use the opportunity to promulgate his philosophy, which is correctly regarded as vile. I am wholly against this. Breivik is not on trial for his political views but for killing people: he is (if found guilty) a common criminal, albeit one who is uncommonly evil. We don't even know if he is sane.

The people of Norway and of the rest of the world must not be treated as children. We must be allowed to come to our own conclusions as to Mr Breivik's sanity, philosophy and politics. I am confident the last two will be regarded as mistaken and evil.

But we are not scared of hearing them. We can make up our minds on our own.

England v India

This was the 2,000th Test Match and the 100th between England and India. It was at Lord's, the home of cricket. The weather wasn't bad. The world's top scoring batsman, Sachin Tendulkar, playing almost certainly his last match at Lord's, where he has never scored a century, came in with 99 international hundreds to his name. He failed to score one here but in every other respect the match lived up to the hype, and England won a dramatic victory.

For a cricket fan, sheer unadulterated enjoyment.

Wasted2

Thanks to a friend for pointing out that all those on my list in the post 'Wasted', with the exception of Keith Moon, died age 27, as did Robert Johnson (who probably wasn't reponsible for his own death), Rudy Lewis of the Drifters, Alan Wilson of Canned Heat, Ron McKernan of the Grateful Dead, Pete Ham of Badfinger, Gary Thain of Uriah Heep, Pete de Freitas of Echo and the Bunnymen, Richy Edwards of Manic Street Preachers (presumed dead) and many others.

Weird.

The Can-do syndrome

I don’t really like the expression, now appropriated to the euro debate, ‘kicking the can down the road’: it seems to imply that the can is the problem, whereas in fact it is nice to have something to kick down the road when you have to walk and there’s nothing else to do. In fact I am more of a rugby man than a soccer man and might probably pick up the can and run with it, although that would be management speak analogy for the exact opposite.

Good. My only other contribution to this polemic is to say that what the European Union are doing is kicking a bomb down the road, not a can.

The Germans, you see, felt that the private sector should help carry the can (sorry for the confused metaphor) and it is easy to see why. The debate in England after the bailout of the banks was that when they invested wisely they reaped huge returns, but when they invested foolishly the taxpayer carried the (sorry) burden. If they lost nothing, having bought Greeks bonds at a massive return, and were always going to be bailed out, investing in Athens’ worthless IOUs would have been a one-way ticket to success.

The French pointed out that this would constitute a default, which would trigger other defaults until the whole thing collapsed.

The trick was to find a solution acceptable to France and Germany (I don’t know about the other 15 members of the Eurozone, they just seem to be herded into the Franco-German lobby). And in this they have done quite well. The financial markets want to believe in the euro, particularly since both America and Japan look unattractive at the moment, and the response was at first ecstatic. Later on the ecstasy level subsided and there were mutterings, but I don’t think these will come to too much. This has staved off crisis until the Autumn.

The private sector involvement, which will cause a minor ‘selective’ default, will be to have to replace their Greek bonds with long dated eurobonds, that is to say obligations of the whole eurozone.

In September-October there will be another summit and the minute detail of the deal will come out. Some of this has been deliberately withheld (or not agreed yet) and a bit of confusion remains: the European Commission announced that the deal was for €159 billion including private sector involvement, whereas it told the participants (who have to pay for this) that it was only €109 billion. The difference appears to be the amount of the first bailout which has yet to be disbursed, but the Dutch are already crying foul.

By September traders will have had their summer holidays to mull this over, and America will have agreed action on its debt ceiling so the dollar won’t be quite the disaster area it is at present. The markets will ask what is being done to address the wide differences in productivity between the South and the North. Without narrowing this gap we shall have to go through the same crisis in a couple of years’ time. The answer that the whole thing will be managed by Germans is not likely to be acceptable to the South.   

In the meantime the dogs have been called off. Ask a eurocrat if the euro can survive this, he will say ‘Yes, we can’ (sorry, sorry).

Wasted

They craved fame – what artist wouldn’t – and couldn’t handle it when it came along. Amongst others, and in no particular order, Keith Moon, Brian Jones, Jimi Hendrix, Jim Morrison, Janis Joplin, Curt Cobain and now Amy Winehouse.

Wasted lives? Who is to say he would do any better?

Eurobonds, taxes, dithering

For tomorrow, Thursday 21^st July, one of Europe’s three presidents, Herman van Rompuy, has announced an emergency summit in Brussels to discuss the eurozone crisis. Angela Merkel’s initial response was to say that if there was to be no agreement (that is to say agreement to the German line) she saw little point in attending. Now she has agreed to attend but says not to expect too much.

Of course the normal procedure for a European summit is for the policy to be agreed in advance by unelected bureaucrats and for the leaders just to turn up and have lunch and say how important it has all been. Going to a summit without knowing in advance what will be said will be a new experience for most of them.

At the same time you can see Mrs Merkel’s point. There really has been a lot of hot air expended to no apparent avail.

So, what is on the table? The first idea is eurobonds. Not the things which were invented in the City in the 1960s to mop up the excess dollars in Europe stemming from the Marshall Plan during the war. No, these would be bonds issued (ie borrowings made) jointly and severally by eurozone countries. With these low risk securities they would mop up the dodgy drachma bonds and... Yes, well that’s the first problem with it. Every country would want its debts replaced by these eurobonds, it’s like having a signature on Germany’s bank account. And what about future debts? Ah, say the Germans, countries in receipt of this largesse will have to abide by fiscal rules we set (ahem! Sorry, which the EU sets). Ah, say the Greeks, there goes our independence, we would become a colony of Brussels.

The other proposal on the table is a bank tax. Unfortunately this would have to fall on all banks, even though they hadn’t invested in Greek bonds. A bit unfair. And will London, New York, Zurich and Singapore be imposing such a tax? No. It’s effect would be to make European banks less competitive.

No one can remember a summit where we got to the date and no one knew what was happening. Now Mr Barroso, another president of Europe (the third is the Prime Minister of Hungary) has warned, perhaps shrilled is a better word, that if no solution is found to the second Greek bailout there will be repercussions all over the world. There’s a couple of things to know about this statement. Firstly, the problem is no longer Greece. Greece is like worrying about your electricity bill when they are repossessing the house.

The second thing to know is that it is a lie. The markets are already expecting a Greek default. It is ‘priced in’ as they say, and outside Greece and a couple of banks there would be no surprise, no crisis. The Brussels elite (Barroso is the head of what was originally described as the civil service but is in fact the unelected body which runs the continent) have cooked this story up. These people cannot bear the thought of the euro breaking up: their political dream will have come to nought. So they don’t mind if the ordinary people (that is to say not the elite) are impoverished in support of their political goals, just as Stalin and Mao didn’t mind if people were starved, imprisoned or murdered in order to achieve their political ideals. So Barroso will say there will be repercussions, he will say that there will be riots and widespread disease if his project doesn’t continue unchanged. But that doesn’t make it true. It’s a lie.

In the meantime Italy and Spain sit there at the mercy of the markets. In Italy at least, everyone goes on holiday for the month of August. So no assault could be made on the currency then, obviously.

Italy's budget

Last Friday the Italian government managed to pass its budget in record time. I first wrote about it at the end of June. That’s nineteen days ago. President of the Republic Giorgio Napolitano described the speed of its passing as un miracolo. Miraculous or not, the reason it passed so quickly was that they had got the wind up. The beady eye of the markets was beginning to turn its attention towards this sunny peninsula and for a couple of days most of Berlusconi’s calls were from worried eurozone leaders urging him to get moving.

Even so Berlusconi nearly wrecked it: openly criticising his finance minister Tremonti, and concealing in the text of the budget wording which would have allowed one of his companies to delay payment of a court judgment in the amount of half a billion. It is almost as if Silvio realises that he has done little or nothing for his country and that at this late stage there is nothing he can do anyway, except save himself.

The trick when facing a debt crisis is to make a successful issue, to show people you still can borrow, and steady the ship. The Bank of Italy did just that, but had to pay an extra 1% per annum, almost at the level where it cannot afford to service its debt.

The budget amounts to saving some €48 billion (a bit more than originally planned) with 80% of it coming after the elections. It involves removal of some tax breaks, taxes on investment portfolios, raising the pension age, higher charges on the health service and some streamlining of local government.

At the same time il Sole 24ore, Italy’s equivalent of the Financial Times, published its own proposals, based on denationalisation. It has not met with much approval in the rest of the press, but I think il Sole is correct. Both budgets are criticised for not promoting growth but in my view people are missing the point with regard to il Sole’s attempt.

When occasionally I am asked by an Italian what is wrong with Italy (they mean financially; everyone agrees the ice cream is brilliant), I say ‘the State is too big and the individual is too small’. Of course there must be cutbacks and of course there must be revenue raising. But the State is too big not just in terms of monetary aggregate. It is too big in terms of power.

The elite, who control the massive state apparat, live in a different world to the rest of Italians. By the elite I mean not just the politicians but their hangers on, their families and also the world of organised crime which they allow to exist (with occasional culls to show they are on the side of the angels). There have been mumblings for years, mainly about little things. I mentioned here that one senator had proposed they have free ice cream on hot days. I mentioned in May last year that there are 629,000 Auto Blu, government sponsored cars.

Then Sergio Rizzo and Gian Antonio Stella, two journalists from the Corriere della Sera, published a book called La Casta, detailing a myriad instances of institutionalised abuse of power. It is no great literary work but soon became the No.1 bestseller, in a nation which doesn’t read much. Now a blogger writes of ‘the caste of Montecitorio’ (the parliament building) where he used to work. Amongst other things he notes that politicians, as well as being able to drive round Rome without being done for parking, speeding or whatever, can nominate several other cars for this privilege. Wives, mistresses, friends.

It is noteworthy, and at last has been noted by the press, that the politicians have passed separate legislation excluding themselves, their families, their pensions from the austerity imposed on the little people.

The Italian political elite are doing each other favours and granting each other concessions at the expense of the taxpayer. And this is why Il Sole 24 Ore’s contention is right. Italy will have no growth while these parasites cream off the surplus for themselves. The sooner all state holdings, all state land, all property of the parastate (eg bank foundations built on the back of tax breaks) are sold off, the sooner power and influence will be taken out of the hands of the elite, and the economy can grow.

That is what Italy needs, not Tremonti fiddling with how much poor people have to pay their doctor. It needs a free economy and it needs growth. It may have to leave the euro anyway if the markets get nasty, but it will certainly have to leave within five years if no one wakes up to the corrupt sclerosis at its heart.

Mandela

Watching the TV's coverage of Nelson Mandela's 93rd birthday celebrations I was filled with a perhaps unworthy dread. What are we going to do when he dies?

It is perhaps a comment on the present leadership, but Mandela's sainthood in S Africa seems to grow steadily, the latest instance being people donating 67 minutes of their time to good causes to represent the 67 years he spent in public life.

Don't get me wrong, I see nothing untoward in respecting worthy figures, and nothing wrong with Mandela being a figurehead for the nation. It is just that in the northern hemisphere, and particularly in Britain, the media is obsessive. The death of Diana, the 9/11 tragedy, the Royal Wedding, the Murdochs, one can think of too many cases which, whilst important, have pretty well shut down the British media and silenced journalism. The death of Mandela, with the attendant hysteria of the left, in particular the BBC, and the self-righteous breast beating of the worthy would be all but intolerable.

Let's hope the old boy sticks around for a bit.

How to pick a copper

The Commissioner of the Metropolitan Police, Sir Paul Stephenson, has resigned following tales of bribe taking by his officers, failure to investigate this and his having employed one of the suspected journalists as a PR adviser. This whole Murdoch scandal – and I don’t think we have heard the end of it by any means – has dented the public’s good opinion of the police and I think it right that a senior head should roll. Sir Paul's having received a £12,000 freebie at a health spa has given the story a rather Italian flavour.

As to choosing his replacement I can only repeat my advice (which wasn’t taken) at the time of his appointment. The way to do this is to conduct an opinion poll as to what the public regarded as policing issues and before showing it to them ask the candidates what they thought the public had said. I’ll bet that petty crime such as theft, violence and drug-related disorderliness are much higher up the list than the candidates think and that anything to do with a motor car (except the theft of one) much lower.

That is why I favour electing police chiefs.

Murdoch & Co

Rebekah Brooks, chief Executive of News International, has resigned and the media are full of it. They remember that Ed Miliband, the darling of the story, had from the start called on her to consider her position: now, they say, Murdoch, on the ropes, has caved into public pressure and sacrificed his favourite.

So, Murdoch has dithered and then caved in to ..er.. Ed Miliband. Doesn't really sound like the same bloke. Here is my take on what went on.

Murdoch knew when he landed in Britain that he had three choices. The News of the World was neither viable nor saleable so he enacted an established plan to replace it with the Sun on Sunday. To buy some time, he closed it immediately watching how the land lay. His three choices were: tough it out, defending every accusation to the limit until everyone was bored; close down the UK newspaper operation selling the profitable papers and the flagship Times and Sunday Times; or stick with the UK and try to look cuddly.

With the Milly Dowler accusations, that they had tapped the 'phone of a murdered child, even deleting some of the evidence, and the obvious anger in parliament, toughing it out was not going to be possible. I believe he was seriously considering pulling out of newspapers in the UK when he learned of the FBI investigation. America is his heartland: he acquired American citizenship for Fox, and America is where the people and the money are. Faced with an uphill struggle there, he decided his only option in the UK was to roll over and play cuddly.

For the toughing it out or the sale, Rebekah Brooks would have been ideal. For the cuddly look, she was already contaminated material. She had to go.

And I believe Murdoch made this decision only yesterday.

Good Moody's

From the FT, on the proposal for a new debt ratings agency in Europe

If Europe is indeed to found a new ratings agency it should choose a name that accurately reflects the new organisation’s role and methodology. Pollyanna would be one possibility. Or Prozac could be a good antidote to Moody’s.

Les Grenouilles en fete

La Fete National today, happy Quatorze juillet to my French friends.

The whole country waits to see if DSK will run for the Presidency, otherwise it will be the same as last time, Sarkozy winning and the left humiliated by Le Pen, this time in the form of his daughter Marine.

I'm not sure I'd want any of them, but, as we know, one man's meat is another man's poisson.

Quote of the day

The FT's Vincent Boland, on Giulio Tremonti, Italian Finance Minister:

'The further away you move from him, the more convincing he looks'.

The Eurozone: a tale of indecision

So, what is happening in the Eurozone?

To recap a little, it had become apparent that the bailout of Greece was not enough. There was no procedure in the Eurozone either for a country defaulting within it or leaving it. The Eurozone Group had up until now made all the right noises and the markets trusted them: there was no overall assault on European economies because they were led to believe that there would always be bailouts.

But the bailouts are not popular in Germany and and it was increasingly felt could not become the gift which has to keep on giving. As it became apparent that Greece would default, whether the eurozone liked it or not, the Germans came up with a plan for private sector involvement. That is to say that Angela Merkel would persuade the German electorate to go along with it on the basis that they were not footing the whole of the bill. In this case 'private sector' means largely French, German and Greek banks. I should say now that if there is not private sector involvement, this would be tantamount to saying that the banks can take whatever risks they like and be bailed out of their misjudgements, a view which became quite unpopular a couple of years ago. However if the private sector has to take a haircut, they will have to be bailed out by their governments anyway. Many people, for example the Germans and the peripheral countries whose banks have not lent to Greece, might prefer this: better to bail out your own banks than the lazy, corrupt Greek people.

The French rather baulked at all this (it would make their banking sector look insolvent) and produced a plan which involved Greece purchasing some collateral which would cover the banks for part of their exposure. Governments would lend Greece the money to buy the collateral for the banks. Standard & Poor's, the credit ratings agency, said that this would effectively constitute a default, and the Germans said that if there was going to be a default anyway they might as well go back to the German plan after all.

Doubtless you will have worked out what is going on here: nothing. Last night the Eurozone Finance ministers issued a statement which announced nothing. An admission that they couldn't agree. With the euro, one must always look at the political element, for the euro is largely a political tool. They just can't face the idea of a Greek default, because it would be a stain on the record of their political construct. They have just shut their eyes and are hoping it will all go away.

Now the markets are fed up with this dithering. they had been led to believe (dishonestly, in my opinion, but they should have worked it out for themselves) that any difficulty and the Germans would get the chequebook out.

And they have belatedly started to wonder what would happen if other economies got into difficulty, which is why there is talk of of the contagion spreading. In the past week or so Italy's interest rate has gone up by 1%, as has Spain's.

Italy and Spain are two different cases. Spain thought of itself as  modern economy, but when it joined the euro its interest rates fell dramatically. this caused a property boom, financed by the banks. this bubble burst, as bubbles do, and the banks are in trouble. Thee is also a serious government deficit.

Italy is larger than Spain but not really a modern economy. It borrowed heavily in the '70s, '80s and '90s and frittered away the money. There is very little to show for it. They ought to have made (and ought now to be making) dramatic cuts in public expenditure, but there is no political will for it (and damn all in the way of leadership). The alternative is to improve the growth rate, but this would require making it easier and cheaper to fire people, reducing the stifling regulatory burden on business and reducing the nominal tax burden by actually collecting more of what is due. There is no political will for this either.

I don't think Italy will go bust, but it will be caught up in the maelstrom which has been caused by dishonesty on the part of the European political élite, political chicanery and dithering.

God help us all.

What's in a name

Children are so horrid to each other that I often think burdening them with a strange name to be a form of cruelty.

But it seems to be a fad among the famous. If you are concerned that the Beckhams' new baby, Harper Seven, sounds like a brand of lavatory cleaner, just consider David Bowie's son Zowie, and the late Frank Zappa's children Moon Unit, Dweezil, Ahmet Emuukha Rodan and Diva Thin Muffin Pigeen.

A paper tiger?

Rupert Murdoch flew into London today. In my view the visit has enormous significance.

Murdoch inherited a regional newspaper group and from the time he took it over in 1953 began to expand. In 1969 he bought the News of the World and the Sun, and in 1981 The Times. Thus he owned the largest Sunday paper, the largest Daily, and the voice of the Establishment.

Murdoch supported Mrs Thatcher – he was to change the face of Fleet St by fighting the unions himself – but it became increasingly apparent that it paid for a politician to keep him on side.  Neil Kinnock made a tremendous effort to woo him, but to no avail, and he stuck by Thatcher’s successor John Major. The Sun’s headline before the election ‘If Labour win tomorrow will the last person to leave Britain turn the lights out?’ and the day after Major’s surprising success ‘It was the Sun wot won it’ are classics, but no one doubted the power of the former or the veracity of the latter.

In 1997 Tony Blair, despite being certain to win, flew half way across the world to address News Corp executives. It had become a political tenet that you could not win an election without Murdoch, and Labour stayed in power until Murdoch began to support the Tories. He had the power of a 17^th century monarch.

Which is why it is significant that he has come to England: years ago he would have summoned everyone to him. His son James, 38, who runs the European operation, cannot be trusted in a crisis without his 80 year old daddy.

There are three significant moments to this crisis:

-          The public were OK about them hacking into the messages on celebrity voicemails. The results were entertaining and let’s face it you have to be pretty stupid not to change your access code from 1234. It was when it was revealed they had hacked into the ‘phone of missing schoolgirl Milly Dowler and of dead servicemen’s families (‘our boys’) that things changed: this upset just the sort of person who reads the News of the World.

-          Ten years ago there would have been a conspiracy of silence in parliament. This time Ed

 Miliband, leader of the Labour Party, clearly saw that there would be no election until 2015 when

 Rupe would be 84 and he would still be the underdog, took what will seen to be be a bold step and

 condemned News International, inviting Mr Cameron to do the same.

-          Cameron, reluctantly given his close ties with the Murdoch group and Rebekah Brooks, its CEO,

 ditched them and authorised two inquiries, saying he would have accepted Brooks’ resignation.

These developments would have been almost unthinkable even weeks before.

So is the man who changed newspaper production, bringing it into the modern world, who changed the face of broadcasting with BskyB, whose word could determine elections, finally a busted flush, a paper tiger? Given his age and the ineffectiveness of his children, I rather think he is. If that is so, it will be the most profound change to British public life since Mrs Thatcher.

Manuel Galbàn

This blog mourns the passing of Manuel Galbàn, with his long association with Cuban music and more recently his pairing with Ry Cooder. H was 80 years old and died in Havana. He was a part of the Buena Vista Social Club, which brought Cuban music back into popularity.

Too dull

I don't think very highly of Simon Heffer's writing, but I have to salute him for this, in a review of the new biograqphy of Ed Miliband:

'A biography of Ed Miliband has to try hard not to be the sort of thing one buys as a present for someone one avidly dislikes. This effort ... does not try hard enough.'

South Sudan

Today we welcome the Republic of South Sudan to the Family of Nations.

Actually it isn't really a family, and there is going to be something less than a family feel in the border area as the Muslim North eyes the oil-rich Christian south.

I predict there will be international intervention in the area before this decade is out, and since Sudan as a country was largely a British invention (we didn't want Egypt controlling the whole of the Nile) we shall probably feel obliged to participate.

Hey-ho.

PS It is not widely recognised that during the Second World War, Sudan fought and won a battle against Italy.

News of the Screws

Two things we might have guessed:

The first is that News of the World will close. Next Sunday's edition will be its last. NOTW was first published in 1843. By 1950 it had become the biggest selling newspaper in the world, with between 8 and 9 million sales. Rupert Murdoch bought it in 1969.

The second thing we might have guessed? Murdoch will replace it with the Sun on Sunday. He isn't closing NOTW out of shame, but because it has become a contaminated brand

Otto von Habsburg

Europe mourns the death of Otto von Habsburg, aged 98. Otto became the heir to Austria-Hungary in 1916, but never became King Emperor. Austria went through dramatic upheavals during and after both World Wars, and became a Republic in 1945.

Otto played a valiant part in WWII and was sentenced to death by the Nazi regime. He was later a Euro MP for 20 years. Franco offered him the crown of Spain but he declined and suggested Juan Carlos.

Habsburg was mainly known to most people for a false quotation: that he was asked during a World Cup if he was going to the Austria-Hungary match and he replied 'Sure, who are we playing?'. Not true, alas.

Someone should write a book of false quotes, including 'Elementary, my dear Watson', 'Play it again, Sam', 'Rivers of Blood' and almost everything attributed to Churchill.

Shooting the messenger

Following the decision that the proposed second bailout for Greece would constitute a default, and the subsequent downgrading of Portugal's debt, politicians in France, Germany and Brussels have called for a breaking of the oligopoly of ratings agencies (there are three main ones, Standard & Poor's, Moody's and Fitch) and the creation of a new European one.

There is in fact much to criticise with the agencies, the principal one being that they are paid by the issuer of the debt and thus might favour it, but in this case it is...er.. Portugal.

The idea that markets might have confidence in a new Euro-friendly one is so laughable that it could only have been made by people completely out of touch with reality (which is indeed the case).

You couldn't make it up

Sarah Webb, a PR person representing Glenn Mulcaire's family, has asked the press to respect their privacy.

(Hat-tip to Guido)

Journalism's failings

In the past week the reputation of the British press has reached a new low.

First Johann Hari the Independent columnist, who to my surprise has become almost a cult figure amongst the trendy British left, has been accused of plagiarism and bad journalistic practice. His technique was to spice up his interviews with quotes from the interviewees' sayings or writings elsewhere. It is as if he had written 'I asked Lady Thatcher if she would change her mind. 'The Lady's not for turning', she said' (not that he would have ever spoken to Lady Thatcher). The Orwell Prize judges are considering withdrawing their award to him, and bloggers, inspired it must be said by a touch of jealousy, are going over everything he has written with a fine-toothed comb.

Worse, far worse, are the accusations against the News of the World, concerning the murdered schoolgirl Milly Dowler. It is alleged that their full time investigator, Glen Mulcaire, hacked Milly's 'phone, with their usual technique of raiding the voicemail. While she was missing, and perhaps still alive, the police kept her 'phone topped up in the hope she might use it. But after a while the voicemail was full, so, it is said, Mulcaire wiped off some of the messages - evidence in the investigation of a missing child - to allow more to get put on, which he could then report. Relatives, checking her voicemail, assumed she must have wiped them off, and thus that she was still alive.

It seems inconceivable that someone could do this. Perhaps the poor financial performance of printed newspapers has led to cutthroat competition, but these poor standards cannot be left to continue. The Press Complaints Commission should give some thought to its future role.

You can never bribe or twist
- Thank God! - the British journalist
But seeing what the man will do
unbribed, there's no occasion to.

A woman scorned

For those of us who dislike the Environment Secretary Chris Huhne, and we are many, his legal travails have been an amusing distraction. The story, en bref, is that Mr Huhne is alleged to have persuaded his then wife, the economist Vicky Price, to take on his behalf speeding points which were to accrue to his driving licence.

The story would almost certainly never have come out had Mr Huhne not left Ms Price for another woman.

An incredible amount of time has been spent by Essex Police on this case and we now read that they obtained a warrant, entered Ms Price's house, woke her sleeping son and took away his mobile 'phone for evidence.

I am now wondering whether this Aristotelian story of hubris and nemesis, the powerful man losing everything at the hands of the scorned woman, hasn't gone too far. The police will not even bother to investigate if you have been burgled or mugged and yet this, when all is said and done, is about a wife taking points on her licence for her husband - a crime, yes, but one which must surely be fairly common and which has caused little damage to the public good.

Amusing, though.

DSK latest (No.348)

Story is that the case against DSK has imploded. It is early days, but worth remembering that the lists for nomination for leader of the French Left are open for another 2 weeks.

DSK would have won anyway, and if he were to stand now he would do so as a victim of American injustice, almost irresistible to a French voter.

Of course there is uncontested evidence that he had 'relations' with the woman, which would exclude him in a Protestant country but not in France.

Early days but this could be interesting.

Economics works!

There has been a lot of doom-mongering recently, to the effect that high food prices are the future for our planet, and that poverty, disease, starvation are what we have to look forward to.

The moaners are followers of Thomas Malthus, the 19th century economist, who decreed that agriculture progresses on an arithmetic scale whilst population increases on a geometric scale and WE ARE ALL DOOMED!

Of course Malthus was proved wrong during the industrial revolution as new farming techniques and mechanisation produced increasing crops from fewer workers. He is still wrong, and whilst we can hardly guess what innovations will take place from the biosciences, we do know that large amounts of agricultural land are unused. In Europe, perhaps the most insane of agricultural schemes worldwide, farmers are paid not to farm land - 'set-aside'.

So it will have come as a shock to the Malthusians, but not to level-headed people, to read this morning that grain prices have fallen dramatically because US farmers have reacted to the new high prices by planting more, just as the law of supply and demand says should happen.