Friday, October 24, 2008

When is a product, not a product?

Whoever was first to use the expression "product" to describe a mortgage or savings account or insurance policy should be hung, drawn and quartered. We've even heard someone describe their party policy a "political product", so this clearly has to stop.

This stupidity has imbued commonplace bean counters with a range of completely unearned posh sobriquets, finally ending up at "Masters of the Universe", that seem to have lead them to imagine themselves as great captains of industry, and creators of vast wealth, when the awful truth has revealed that they are are none of these things.

The financial services emperor is stark buck naked. It's time to laugh at his minuscule manhood and force him to drop all presence to grandiose things such as "products" and resume his rightful role as a "clerk". In fact, we should press on further and call a "mortgage product" a "highly secured loan", and an "insurance policy" a "bet".

The latest "financial product" is apparently a credit card with an APR of over 200%, launched just in time by the once reputable Argos, to exploit their gullible Christmas market. So instead of "banker", please now read "loan shark"; and for "insurance underwriter", read "bookie".

A bailout for the rest of us

The Conservative Party and Daily Mail's feeble campaign in support of SMEs and self employed with 1-4% tax changes is utterly futile. And simply deferring VAT and tax is a recipe for disaster. Charlie Bean at the BoE now says this is possibly the largest financial crisis in "Human History" - so please DO something about it!

The imminent unemployment tsunami simply will not/cannot be absorbed by the "globalised" companies - can you see the likes of any financial institution (unless they specialise in repossession or insolvency) or service brands such as Costa Coffee, Starbucks, or behemoths such as Tesco (especially retailers...) being able to absorb significant extra staff?

One way to make a difference might be to allow small firms of up to 10 employees with 3 years accounts filed to keep the equivalent of the previous year's PAYE/NI costs on up to 10 employees for a year if they do not cut total staff headcount, and look at a similar scheme for new ventures and start-ups. If they are lucky enough to make profits, then some of it will be taken back in corporation tax. However, that's not the point - it costs a lot to take on staff and train them. It takes a year to set up any sort of new business and its systems, premises, paperwork and get it ticking over - it takes Gordon Brown one speech to sow the seeds of ruin, and it takes a minute to wind it all up.

If we do not get as radical as this, then we're going to have to pay the dole on AT LEAST 3 million again, which is a dead loss to the economy. Yes, there are bound to be all sorts of efforts at fiddling/exploiting any such schemes, but the plan could be presented in such a way that fiddling it would be regarded as socially unacceptable - the business and fiscal equivalent of speeding at 120mph whilst 3 times over the limit.

When all the "globalised" behemoths complain this is unfair, "so what?", we say. They are almost as much to blame for having exploited the stupidity of hypnotised governments and regulators and their failure to act on curtailing the worst excesses of cartels and monopolies as the discredited (sic) financial conglomerates.

Fiddling on the fringes is NOT an option this time.

This time it's going to have to get really personal and substantial.

Thursday, October 23, 2008

No more boom, plenty more bust...

This recession is going to cause more pain than most people realise - more quickly. Few people in the insulated world of public employment have any idea what it's like trying to run a business with the overheads of Broon's Boom and Bust Proof-socialist paradise. Talk of fiddling on the margins of corporation tax is futile.

Deferring tax is likewise futile - all that means is that 6 months down the line HM C&R will wind you up double quick, especially if you have been daft enough to pledge personal assets to cover loans you take out to keep an ailing business alive in the meantime. (Although perhaps Broon's geniuses will have worked out how to nationalise 8-man building firms and the self employed by then.)

Any business trapped in a long lease with the traditionally punitive terms signed in the fat days of 2006 will find their landlords really keen to be understanding; any business with employees being paid more than they are worth to the business will have to pay now to possibly save later; so for many businesses, the cheapest option now will simply be to go bust. Expect a boom in the insolvency industry.

The domino effect of this failure is already starting to be felt. All discretionary spending will cease by the end of the year - although the UK population is probably conditioned to continue to spend too much on tat as yuletide approaches, the chances are that there will be massive trouble in retail by March.

Make no mistake folks, there is no plan B here - the infamous "No More Boom and Bust" statement tells you everything you need to know about Broon's strategic planning and readiness. We are so deep in the shitter this time round that there will have to be some really creative thinking and massive effort to haul us out. Does it really look like Broon and B team can deliver it? Things may get so dire, so quickly, that someone will start talking about a government of "national unity" before long so that the inevitable draconian measures can be rammed through.

Thanks Gordon, you're a star.

Tuesday, October 21, 2008

Baron von Mandelstein

The BBC's gruesome twosome of Peston and Robinson were positively bursting with glee this morning when breaking the news that George Osborne had been shopped by his alleged "friend" the hedge fund operator and banking dynasty scion, Nat Rothschild, over the matter of not managing to get a party donation from the richest bloke in Russia whom he bumped into on Corfu, apparently at Rothchild's invitation.

Also present at the scene of this private event was the lovely Baron Von Mandelstein, who according to gorgeous George was sharing some home truths about Gordon Brown, some weeks before Broon let him in from the cold.

So how come The Red Baron was rehabilitated and offered a peerage and a cabinet seat by the very same Gordon Brown to the amazement of just about anyone with a pulse? Surely not because he suggested he might be able to launch an Exocet at the Tory number two, with the assistance of his excitable chums at the BBC? Of course not. Perish the thought.

The Daily Mail reports that Rothchild, a reformed wild child, once pushed a portable toilet down a steep hill - with a friend still inside! It seems he is now trying to metaphorically do the same again; but why would Rothschild want to be part of this circus - what is in it for him? And how come controversy always seems to stick to the Red Baron like the Brown stuff to an ermine cloak?

Friday, October 17, 2008

Here's Dave...

At last, the boy wonder (and his Boy Wonder, gorgeous George Osborne) has set out the Conservative position on SuperBroon's economic miraculous disaster. It wasn't exactly a savaging, but a fairly tight analysis sprinkled with things that look dangerously like policies. Steady on.

The City breakfast (of course) audience was treated some technical commentary that would have sailed far above the head of many of the hacks present, but for the benefit of the Sun and Mirror reporters, the iceberg analogy was swapped for a burning house, which has a certain irony, anyway.

Thursday, October 16, 2008

Feeling good, Billy-Ray...

The Great Depression only came to an end when the US went on a splurge of deficit spending which it eventually "repaid" by skinning the UK of its Empire assets during and after WW2.

The US domestic economy continued to plough on and convince the world it had assumed the mantle as provider of global prosperity from the British Empire, and everything was looking just about OK until last year. It was then that some daft bankers dared to suggest the Uncle Sam, aka The Credit Emperor, was threadbare, never mind stark naked. Up to that moment, as long the world's bankers and politicians danced around delightedly declaring the Credit Emperor to be attired in the finest fiscal garments ever to produce a phony "feel good" factor, modesty was kept in tact, the world still turned, and economies thrived.

But if Gordon Brown still wants to believe in fairies (TMP wonders if JK Rowling's £1m donation will buy her a title and a job as "Minister of Magic"), and that "there will be no more boom and bust". So here's how...

There have long been rumours that more than half the painfully easily forged US currency in circulation worldwide was counterfeit (why else would the US be so reluctant to change the design?) so why not just print a few more $trillion, keep quiet about it and carry on regardless? What the eye doesn't see etc.; but even if China did find out, it would probably be happy to keep the factories churning.

When the ink dried, a few highway projects and dams would have meant that Billy-Ray and Darleen could have paid off that toxic mortgage using the hooky cash, and everyone would have been feeling good, and none the wiser - at least until well past the next election and the time when incumbent politicians were collecting their gold plated pensions.

After all, who is going to cash up and count the damn stuff?

Wednesday, October 15, 2008

Well then, it's the turnips

Brown's miracle cure seems to be getting the finger from the market.

In the UK, Lloyds long suffering shareholders are livid that Gordon's drinking pal Lloyds' Chairman (for the time being...) Victor Blank swallowed the punitive terms of the cash quite so readily in the rush for HBOS and its wonderful mortgage and retail businesses, and effectively wrote off the value of Lloyds shares for the next 5 years!

And this seems to have set the the tone for a general reaction to all the indicators that the economy is indeed, deep in the Brown stuff. The FTSE is still plumbing the depths. Unemployment is up, and the government cannot spin them any harder to hide the truth.

Of all the banks, Lloyds was least exposed to the toxic market, mostly because it was dozing quietly for the past few years, almost devoid of ambition to do anything more than sweep up as many small retail bank accounts as possible, when they got the feeling their competitors had taken their eye of that steady if unexciting "bread and butter" ball. So what are they now doing on their (shareholders') knees, with their shareholders holding the unwanted, unlovely and extremely bastard offspring of messrs Broon and Blank?

But far from "swivelling", Brown leaves Harriet Harperson in charge as he sweeps through the corridors of international power on his familiar cushion of self-importance and hubris as he tries desperately to leverage his temporary omniscience to set up a global conference on finance and trade, to "prevent excessive risk". That's fine by us, since clearly the biggest risk we face as a nation is the possibility of Labour remaining in charge of the UK.

Listen up Gordon, we STILL have not been told exactly what went wrong and why - so how come you know all about fixing it? It just might be as simple as a series of criminal acts of evasion of perfectly adequate existing regulations, coupled to dopey regulators that were not up to the job - and the dubious collusion of politicians that were determined to believe in the continued existence of the credit fairy, which had been so handy for securing feelgood votes.

In fact, if you do know so much about fixing it, then it begs the question why did you allow it to happen in the first place? Or will you conveniently try to hang that one on the old sleasemeister Blair: "I voz only following orders, mein Fuhrer..."

Since this is mostly about a crisis of confidence, then just maybe people have no confidence in his ability to continue to govern ? Sooner or later he's going to be rumbled for what his old boss Blair always understood him to be: an obsessive control freak, creative with numbers, devoid of vision. And now properly undone by the most laughable statement of modern political times:

"There will be no more Boom and Bust"

Which works very well as an epitaph.

Where's Dave?

Stock markets are still stuttering. Mind you after a 8-10% one day hike, profit taking was always going to happen. If speculators feel they can drive it back down again having taken their one-hour profit, they will.

While everyone is in reflective mood and ready to rip up the rulebooks, and mostly still trying to work out what happened, it seems perfectly reasonable to require that stocks should to be held for at least 48 hours to stabilise the market excesses and deter "toxic speculation".

Now is a golden moment for Cameron and Co. to step up with a new agenda and fresh thinking - where is he? He could even crow about his efforts to retain the union when all around we urging him to cut Scotland adrift - that redoubtable rascal Alex Salmond is going to have a hard time using Iceland as his role model for independence for a while...

Monday, October 13, 2008

Now let's remember how this all began...

Remember, this crisis came about because banks were suspicious of each other and consequently unwilling to lend to each other in the fallout of the US toxic mortgage securitisation fiasco. A fiasco mostly down to over-eager commission-only salespeople, and gullible bankers who had not heard of the expression "too good to be true".

Some dodgy mortgage problems were unearthed at Northern Rock, since the combination of 110% mortgage and over optimistic valuations were coupled to skyrocketing energy and commodity prices. Add the effects of the US mortgage time bomb going off, and the UK housing price boom was declared over for the time being, since no one could get the same sort of laissez-faire mortgage deals that had fuelled the price boom for so long.

Never mind that comparisons with the sort of toxic mortgages that sank the US system were extreme and not relevant. But then a pompous and witless governor of the BoE made "that" remark about moral hazard, the US faffed about while assuming that they were invulnerable to the possibility of trillion dollar financial failures, and the floodgates opened as short sellers were handed a one-way bet on UK financial stocks.

Initially some banks were hoping to force some of their more leery competitors out of the market or drive their prices down for a cheap acquisition; but it got out of hand as the short speculators circled and achieved a number of direct hits. It was not so much a case of tasting blood in the water, as much as looking in vain for water in the blood; having shot most of the banks in a barrel, then they set about savaging general equities - most of which were/are innocent bystanders.

Vast amounts of shareholder value have been destroyed in the UK and elsewhere without justification, and the bottom feeding speculators will probably double their money in the next 12 months.

So remind us, what was this Brown bloke up to for the past eleven years before he decided over a curry with his mates to become a bottom feeder and help himself to shares in banks after he drove their values down?

Does anyone fancy starting a no-win-no-fee class action for insider dealing and general financial malpractise to recover losses from him and his government in the form of the sort of personal guarantees that the rest of us have to produce when dealing with banks in the normal course of life?

An ugly sight

Eeyore and Badger's 9am press conference passed off rather more calmly than the circumstances deserved.

But why did no one ask our fairy-folk fiscal leaders about their famously fictional "no more boom and bust" statement? Will JK Rowling also be writing Darling's next budget statement, I wonder?

Why did no one stand up and ask "You philandering scumbags, this all happened ENTIRELY on your watch - so just tell us what happened and why it will not happen again. And who is responsible..."

Broon actually crowed that he had cannily invested at the bottom of the market! If that is not insider trading then we're not sure what is. TMP wouldn't care if its LloydsTSB shares were now wiped out - as long at it took Eeyore and Badger with them.

The main reason to be suspicious that we've all been had once again is the parade of bankers, politicians, trade union leaders and city gents, all heaving sighs of relief and uncritically praising the plot. Boy, are we screwed.

However, upon deeper consideration of the terms being imposed for this deal, it seems that other bankers would rather try harder to avoid taking the Broon billions than submit to a process that will unjustifiably bolster Broon's standing in the polls, and possibly might actually perpetuate the underlying malaise through Broon's insistence on continued lending to what the banks regard suspiciously as potentially dodgy risks, AKA Labour voters.

Markets seem to have weighed this up and driven the price of both HBOS and LloydsTSB lower on the presumption that Broon's pet banks are going end up as the basket cases of Broon's beneficence. The equity markets were going to bounce today anyway, TMP has already said so and explained why.

TMP believes that the fat lady has yet to clear her throat on this one. Suspicious bankers who would like to declare Emperor Brown and his tailor Darling to be stark naked once again, may sense the upbeat mood being frantically perpetuated by the BBC's familiar cheer leading, would not regard any boat rocking too kindly. Yet.

Sunday, October 12, 2008

How much worse can it be?

Gordon Brown's frantic efforts to herd G7 and EU finance ministers stems from the growing nightmare scenario of negative equity, with the 110% mortgages and wickedly overinflated values of recent years (the UK housing market was uniquely overpriced in Europe and even the US). This was a state of affairs roundly encouraged by the government, to help float and maintain the feelgood factor on a sea of fairy credit. Here's a very simple illustration of the day of reckoning.

House purchased/remortgaged for £200k in 2006/7 with £200k mortgage. Value in 2008 £150k. Will the purchaser...

a) continue paying off a £200k loan for £150k of equity
b) hand back the keys and bugger off in that shiny new BMW purchased using the "equity released"...

Did you buy a used car courtesy of this man?

Millions have used cash they didn't own to acquire assets they still don't own, so perhaps Gordon will be appointing the experts of this type of finance to replace the heads of the retail banks being nationalised.
Sadly, Swiss Tony advises TMP that he
and his colleagues are not currently available for
consultation from their tax haven at
Ford Open Prison, but have
suggested that his inspiration in all things fiscal and hirsute,
Mandelson, might
be available instead.

...this just in - Mandy gets a new fur wrap and seat in the Lords.

In the increasingly likely the event of (b), then just how many UK mortgages are of the "toxic" variety? Probably more than a million, so here is another £200,000,000,000 (it looks more scary when expressed that way, doesn't it?) for Broon's already anorexic piggy bank to account for.

People still have to live somewhere, of course, and local councils must be bracing themselves and reading up on their obligations to house the wilfully and not wilfully homeless, having very wilfully tipped their funds down the Icelandic drain on the advice of New Labour's stalwarts - Capita. So a scheme for turning these owners into tenants is probably already being worked out, for what the government is most likely doing when nationalising the banks is preparing to become a vast provider of rented accommodation.

The reason for Broon's fluster and bluster is that no other European country has anything like this situation with such overpriced houses, hence the mild bemusement on the faces of the G7 and EU finance ministers when asked if they all intend to back Broon rescue plans. Why should they? This is more the UK's own self-inflicted problem than anyone else's!

The most useful thing that could happen next week is for Broon and Co is to scare the rest of the world's financial markets into believing that they are indeed teetering on the same precipice as the UK, when in all probability, they are not. Expect more than one of these finance ministers to become exasperated with Broon's bullying antics and tell it as they see it; and then stand well back...

However, this tactic is also handing many failed left-leaning politicians across the globe a nifty opportunity to indulge in some systemic nationalisation that in "normal" circumstances they could never get away with. So maybe they will all just smile for the cameras - and snatch at the opportunity - whilst making a mental note to send Gordon and Alistair a Christmas card Meantime, everyone claims a brave victory has been snatched from the jaws of a disaster conveniently failing to note that it was entirely of their own making. As Broon's political hero Margaret Thatcher once observed, it's a funny old world.

The result for GB is likely to be the continued loss in value for the £ and the all the inflationary consequences - something those of us who recall all previous Labour governments will find sickeningly familiar. However, it is not entirely clear why equities should be taking quite a such a bath when the real malaise is quite narrowly confined to the US and UK housing and associated finance sectors - hence TMP's rebound predictions. And especially since UK equities will look even cheaper with £ heading south so quickly.

Saturday, October 11, 2008

Free markets and fair markets

Either the bottom arrives as predicted by TMP on Tuesday, or it's time to plough those bowling green lawns and plant turnips. As the scope of the UK government's cunning "plan" gets analysed over the weekend, some flaws in Brown's strategy will emerge - not least the eye watering premium sought on preference shares. If Lloyd's TSB board accepts these terms on behalf of its shareholders after its opportunist move on HBOS, allegedly at the request of the Treasury, then the entire board should resign in shame and be replaced by those compliant monkeys that the Japanese have managed to train to serve in bars.

Ideally, what should happen is that "market" should respond to the government by simply sitting on its hands and doing nothing. Would it not be wonderful to revert to a barter economy so that as little revenue as possible touches the sides of government coffers? After all, they will only waste it on bin inspectors and painting stupid slogans on police cars - and bailing out idiot bankers However, back in the real world...

The problems stem mostly from the false assumption that markets managed and manipulated by bankers and politicians are in some curious way "free"; TMP can proudly claim prescience in the TMP 2008 New Year's Message to the Nation , so you'll have to suffer a bit of gloating we're afraid.

To summarize, here's the TMP simple 5 point plan to establish fair markets ("free" is a complete misnomer, so it goes), as opposed to the wildly distorted product of political and entrenched interests of the past 10 years. We also take into account making better use of the IT and communications revolution that has transformed everything about the way information is gathered and managed and over the past 20 years, apparently to no discernible purpose whatever in the efficiency and competence of government, other than to automatically send out parking and speeding tickets!

  • Ensure that no company can grow to the size where it "simply cannot be allowed" to go bust. Those that approach critical mass will be painlessly subdivided in a process that will release opportunities for innovation and create far more interest and scope for creative development than the sight of companies like Microsoft or IBM becoming inexorably larger and less lovely.
  • Separate each multinational companies' interests so that they are accountable (and therefore bustable) in the country of operation
  • Require all equities to be held for 24 hours before being resold. There must be some traffic calming measures to take into account the reckless speed at which much trading now operates.
  • Require all lending to be offset against deposits and credible assets, including the banks' boards' own personal guarantees.
  • Introduce the basis of real time online accounting and transparency. There is no (technical) reason why the balance sheet of any business from Arkwright's corner store to E.ON energy cannot now be displayed online in real time (with a contingency adjustment allowance of, say, up to 3% of turnover). And for those companies that will try to claim that that they are simply too big and complex for such analysis, then they will be downsized until they can comply.
Add a few extra reality checks and balances...
  • Recognise (at last) that democratic countries will/can never co-operate to the detriment of their own best interests. As we have seen, the voters simply would not allow it, so the EU can only ever be expected to operate as a free trade zone (which, coincidentally, is what we fondly imagined we were getting into all those years ago...). And in defence of the principles of free and fair trade, when a French or German energy company charges different rates in different EU countries, then they will be fined or replaced.

  • Government must be downsized and made relevant to a population that is going to have to be reintroduced to the notion of wealth creation, not speculation and manipulation and public sector pensions. The fact that the local council is the biggest employer just about everywhere must be addressed and alternatives evolved. Many more aspects of local council operation must be privatised and controlled by separately elected officials and budgets.

  • It is widely accepted in slick City circles that the easy money is made from exploiting insider advantage - shorting especially exploits this aspect of the market. But anyone expressing the view that this practise is actually illegal will ensure that person will be regarded as hopelessly naive by the other insiders. Retail shareholders are generally regarded as mugs, unless they trust their cash for equity investment to that group of sanitised insiders known as "funds". The immediate and practical answer to this would be to lock up most of the "inexplicably successful" investment professionals and take away their phones and Internet connections; a less draconian process would involve the introduction of the transparent accounting process outlined above.
TMP's deeply cynical view of the state of markets has been proved to be mostly correct. So after the past couple of weeks, does anyone seriously expect the whole process to carry on as before, in the ever more vicious boom and bust cycles that our woeful leader declared had been consigned to history?

Meantime, happy bottom fishing!

Friday, October 10, 2008

The one eyed man: "I see no icebergs..."

If the ship hits an iceberg, you don't then steer the lifeboats into the same iceberg. The ongoing shambles proves that none of the incumbents have a clue when it will end; or indeed how it began. In this economic land of the blind, the one eyed man is most certainly not king; his miracle rescue plan has got off to a very shaky start, and the value of equities (especially financial stocks) heads further south to provide the speculators an ever bigger upside.

Darling and Broon's cunning plan doesn't appear to be doing anything useful, and we plainly need a much broader ranging review of the state of markets and participants to understand how it happened before we can fix it properly.

Brown still talks of "the new global economy" and bemoans that there is no appropriate system of global regulation. But the history of the human race suggests that there will never be the sort of agreement required that will result in a sovereign state submitting their major companies to outside interference. The "unity" of the EU dissolved at the very first test of this idea when everyone broke rank and rushed for the hills as the system started to creak.

TMP has a solution; possibly the only solution; and it's terribly simple. Contrary to widespread popular belief, what we have now are not "free markets" with safety valves on the damaging effects of monopoly interests. We haven't had free markets on a level playing field for about as long as this crisis has been brewing.

The root cause of the problem is that too many companies and institutions have been enabled to grow to be too big to be allowed to go bust. The expression "too many eggs in one basket" perfectly sums up the past 30 years of creeping globalisation, a period when monopoly legislation became largely irrelevant as governments wilfully colluded with big companies out of stupidity, expedience and greed.

Those of us who have been obliged to try and deal with the masters of the banking universe will be aware that getting funding deals for new ideas is frustrated by deal size. Ten years ago venture capitalists and bankers were reluctant to get involved with any deal for less than £100k on the basis that it took just as much paperwork and diligence to do a £100k deal as it did to do a £1m deal. The benchmark crept up steadily along with the number of rules, regulations and time wasting boxes to tick, and many private equity funds could not be arsed to get out of bed for a deal worth less than £10m. (Of course, fees based on the size of deal might also have something to do with this ...)

Deals were also increasingly predicated on multiplying capital values, not boring old proven earnings ability. Preferred exits were either a fairyland IPO, or a quick flip to sell a creative and adaptable business to help a larger competitor become ever larger and less competitive.

This mindset was also tracked by lazy governments who decided it was easier to regulate and tax one £10bn leviathan, than chase around after 1000 £10m minnows. The Chancellor picks up the phone to the leviathan MD and "does a deal". That leviathan MD is generally a pretty sound "establishment" figure. A well behaved bean counter that's been through the system and emerged as a "safe pair of hands," who gladly toes the establishment line to ensure that his options and bonuses keep on turning up on time. But trying to "persuade" 1000 self-made MDs is far worse than herding cats.

A sinister take on this situation is that there are going to be bargains for those with cash when the bottom arrives. It's much simpler for a sovereign wealth fund like that of Saudi Arabia to acquire controlling stakes in a few multinational organisations than work out how to manipulate thousands of smaller businesses.

The TMP fix will mean cutting ALL companies down to sizes where they can be allowed to go bust.

Do not listen to those trying to preserve their monopoly/oligopoly fiefdoms and cosy service contracts who say it cannot possibly be done. The technology to cope with the operations of these distributed organisations already exists, and the enthusiasm of the people for small scale enterprise is undeniable following the success of celebrity business TV shows.

Let the process of recruiting the right people to head those scaled down business units begin.

Thursday, October 09, 2008

And still it goes on

Oh dear. Speculators rightly assume from a brief analysis of the situation that they can lead the usual sheep to take markets even lower. More insurance companies are now starting to creak, and many of these control matters such as pensions that will probably force further painful interventions that will result in even better value for money when the speculators decide to move back in.

There is real danger that manipulators are playing a waiting game to see just how close to the brink they can take the world economy - on the basis that modern electronic trading will make the rebounds even more sudden and dramatic, enabling several opportunities to take profits as markets lurch upwards in a series of gasps. A steady climb back up wouldn't be nearly as profitable.

However, Gordon's stern facade is cracking once more, and perhaps the bottom will only arrive for the UK once he has gone and the speculators have someone less predictable and inept to play with.

If the system of fractional reserve banking is really so broken that it cannot patched up, then what is the alternative? It's curious how we are currently being edged ever closer to ponder that perhaps the principles of Sharia economics might be the only viable scheme to pursue. Meantime, please keep your eye on more important terrorism issues, and don't forget to take off your shoes, belts and hand in your contact lens solution when boarding an aircraft...

Wednesday, October 08, 2008

TMP calls the bottom...

It is imminent. Mark the date and time of this posting.

Tuesday October 14th will see the start of the upswing as markets suddenly realise that people are still eating, driving, and buying consumer goods.

This will be when aptly named "bottom feeding" speculators judge that they have wrung every last panic measure from every government and forced markets to their lowest point, watch the stock markets soar again as the cute investors that piled out when the market peaked ...all pile back in at the bottom.

Especially now that commodities are falling back to sanity.

The naivety of Broon & Co and his coterie of halfwit politicians and advisers truly knows no bounds, although there is more than a fighting chance that the value of any equity investments they made in a panic might be more than amply repaid in less time than anyone imagined possible.

The bunko booth of Threadneedle Street

Given the ease with which amounts such as £500bn are being flung around by people who have not created a single £ of wealth ever in their entire miserable lives, let's consider what other "big plays" might be possible by those of us equally qualified to set the world to rights.

Given that there is no such thing as government funding - it's always your money and my money - what can we do to put the people in better control of their own money once again?

Ironically, it was the Bank of England's profligacy back in the 18th century lead to the imposition of the taxes on the colonies that kick-started the US war of independence. Whereupon they quickly learned about the joys of central banks and fractional reserve banking for themselves.

Issuing money where there is no basis of supporting value (eg gold or silver bullion) would be called fraud in most circumstances. This video is a useful backgrounder to the situation in the US (and de facto, everywhere else...)

One conclusion is that the banking system is entirely manipulated to create an upward spiral (boom) in equity values based on the presumption of inflation. Which allows governments to devalue their debt at regular intervals (busts) and force savings to fund equities because interest rates alone can never compete with inflation. And so the smart money gets out at the top ..and back in at the next bottom.

It isn't rocket science, so the naivety of Broons statement on the elimination of boom and bust ought to have already consigned him the waste bin of failed politicians. But it's a funny old world, and if the BBC gets its way, Broon might yet be hailed as a saviour!

Now kiss farewell to £50bn

There is vastly more evidence for the existence of fairies than Gordon Brown's fiscal responsibility; just ask JK Rowling and her enviable bank balance. This is the man who said there would be no more boom and bust, so it was mildly distracting that the rescue package should be delivered by two favourite characters from childhood fairy stories.

Eeyore and Badger switched from being responsible socialists to become the most rampant capitalists in the country in the space of 24 hours, because they found themselves backed into a corner by a series of moves by market speculators.

Now pause for a moment - in all this crisis there are been nary a mention of "all that" Arab money. What is it doing? Is it just possible that the fabulously cash-rich fundamentalist regimes and terrorists have eventually learned what Germany and Japan both learned post WW2, ie that cash is far mightier than the bomb? We are indeed being driven slowly but surely towards adopting the fundamentals of a Sharia economy where interest is regarded as usury, and people simply can't spend what they don't have.

Never mind the stupid notion of "solidarity in times of crisis", if the bus is heading over the cliff, it's time to change the driver. Would you buy a used platitude from the man (and his sidekick) who said there would be no more boom and bust..? If he can make one such a cataclysmic misjudgement on what was allegedly his "specialist subject" , then can anyone believe anything he says about anything?

It is time for an EU-wide debate followed by proper elections and a series of referenda on issues such as the apparently unsustainable Euro to enable the people to decide how to reward the smug self-serving idiots who are responsible for this mess.

Tuesday, October 07, 2008

Mandelson madness

TMP had to pause for a moment to be certain that it wasn't dreaming. We believe we are fully awake after all. Peter Mandelson is back in UK Politics? Just what photographs has he got of who/what doing what to whom?

The Labour Party can be assured a reasonably quiet ride at the hands of the BBC of course - after all, Mandeslon ticks many of their inclusivity boxes. Nevertheless, it is undeniable that Lord Mandelson has direct personal experience of dodgy loans and mortgages plus his very own credit crunch.

Monday, October 06, 2008

Back to basics, with a vengeance

Our rudderless government continues to look like it has no grasp whatsoever on events.

The free-for-all in savings guarantees amongst our EU "partners" confirms what we all knew about EU unity and solidarity - it is indeed an expensive sham. The hopeless volatility of unfettered electronic trading has turned stock trading into casino gambling, and we can now see the results.

The short selling ban was a start, but we need a period where all stocks have to be held for a minimum of - say - 5 days. And then review the period once we can see how it is working out. If we are not already into that fascinating zone where "things couldn't possibly be any worse", we are pretty damn close to it.

At times like these, only basics can apply: stocks should only be traded on the basis of earnings and prospects for earnings, not as punts on bogus capital appreciation that are hyped by bent brokers.

So new are the rules of this new game that ALL current politicians and their banker chums could be "let go", and there would only be an upside. At the very least, EU-wide elections and referenda should be promised so the people can "have their say" on what they have seen our leaders doing this past month. Edifying it is not.

Al Quaeda must be laughing its head off that our pompous politicians have done their job so well for them. Broon and the rest of his remorselessly inept colleagues in both Westminster and Brussels are a whisker away from being found guilty of treason and terrorism.

Thursday, October 02, 2008

One down, lots to go...

Sir Ian Blair's vacuous head on a pikestaff is a good start - and the comments in Have Your Say in the BBC new website are unusually unanimously "good riddance", despite the best efforts of the BBC to canonise the worthless twerp. Blair (take you pick of either) was/is the epitome of a "Common Purpose" placemen, and hopefully will be the first of many sad losses for that insidious movement.

In case you didn't watch the BBC's floating voter panel commenting on DC's speech (a mistake using the lectern by the way), you should be aware the most positive reaction came when he was on about jobsworths and health and safety stupidity. (A favourite theme of TMP as doubtless you are aware).

The rest of the speech - and especially the reference to the sainted Margaret - didn't rouse the rabble too favourably. Whatever you may think of the realities, the perception remains everything - and there are clearly no-go areas for the floaters, including Mrs T and Poll Tax. (Although TMP continues to try and work out why Council Tax is effectively any different, other than it allows the wilful more options to evade.)

However, since witless PC runs through every fibre of Labour's being, it should be simple enough to use that one thread to weave a blanket of populist measures that at last address concerns of the British people, that enough is enough.

TMP thinks the attack on councils will also be quite sustainable - we detect little sympathy. Perhaps another theme could be the dramatic reduction of pointless street furniture (inc cameras) and markings, we have no doubt the suppliers of all that junk will be the only people concerned.

Bring on the revolution! The process must involve undoing many things; not doing even more.

Although it's too bad about the chop for quangos - TMP was hoping for a turn on one while the gravy train still chugged. Still, we suppose it's a small price to pay for the return of some sanity.

Wednesday, October 01, 2008

Lies, damned lies and selling

If you watched the Bird and Fortune pieces in the last edition of TMP, then you will know most of what you need to know about the credit crunch. Pay attention in particular, to the references to the amoral commission-based mortgage sales people who started the chain reaction on the rickety porches of Alabama in the first place.

Although we live in a world of unprecedented access to information, education - and dare we say it - regulation - there is one "profession" that exists where the highest fliers are all too frequently the biggest liars: sales. Just about the only "qualification" required to be a salesperson is the ability to sell. So rare are "good salespeople" that blind eyes are traditionally turned by those desperate to rake in income without worrying too much about the small print. Over promising and under delivering is rife, "little white lies" are commonplace.

The fact is that all to many successful sales people tell lies in order to close sales. Their hapless victims are part of an age-old battle of psychology and wits that means a customer is at the same time bamboozled, bullied, pressured and flattered, and frequently too embarrassed to admit to have "fallen for the oldest tricks in the book" to want to admit their gullibility. The very best sales "artists" somehow manage to convince their marks that by buying from them, they somehow become part of the aura of success of that seems to accompany a rampant salesperson.

Mel Brooks' classic comedy of sharp financial sales technique, "The Producers", summed it up pretty well. However, Bialystock & Bloom raised their game even further, and sold the same thing many times over... which handily brings us back to the sales of toxic mortgages as they progressed through the hands of ever more dishonest and skilled salespeople, and on to more stupid and unquestioning customers.

But be they impresarios, mortgage salespeople or politicians peddling themselves and their ideas in the course of doing just about anything gain or retain power - the fact they tell lies is taken for granted by a large chunk of the population: "well, he/she's a salesman - what do you expect..?" We all know that estate agents and politicians are obliged by their code of professional honour to be as economical as possible with the truth - but when it comes right down to it, everyone is a salesperson. We all try and sell opinions and ideas - and ourselves - all day long.

Despite the experience of many lifetimes, no one really learns, and many people selectively hear what they want to hear. And the result is frequently a self inflicted disaster in the shape of repossession, or an inept government comprised of politicians ready to do/say to sell the idea that they know best - where the reality takes an entire country to cleaners.

Think back to the last time you lied about something: TMP will wager that you were selling something to someone.