How the new improved Carneybank of England splurged 70 billion quid to save Osborne’s neck….and Balls missed it.
Osborne….only saved by potty tribalism
The Slog: Continuing on from where we were two days ago when I posted about missing legs on the globalist stool,
what we’ve seen over the last 36 hours or so has been a case of
something entirely natural reversed by other things that are obviously
unnatural. When Ben Bernanke let slip via his portable megaphone that he
wanted to withdraw from QE, there was a global sell-off in shares, and
an equally global spike in sovereign bond yields. That is precisely what
most of us expected.
The following day (Tuesday) there was a suspicious reaction in the
bond markets: the spikes were largely wiped out. The Japanese 10-year
note yield fell three basis points to 0.835%: a fall in comparative
terms of some 60%. Humungous. And, um, for me….er, unconvincing.This means that as well as every Central Bank CEO’s office walls being decorated with their currencies, they’re now covered in their bond issuances…to add to the toxic bonds they all bought during the 2008-10 period of ‘economic stimulation’. In Il Draghi’s case, of course, the office is half the size it was two years ago, because he has several layers of worthless paper on each wall.
The point is this: the rigging continues, the smoke and mirrors are still in play, and the situation’s becoming desperate. And yesterday in the UK, we saw the biggest example of Distraction, Distortion and thereby Deception for some time.
Nothing at all had come to Osborne’s rescue in the way of real ‘facts’. So the Chancellor went with “I, George Osborne, bring news of Mighty Soviet 4-Year Spending Review progress to the Praesidium”….as a result of which, the 30-year gilt yield slid four whole basis points. That is, by any standards, also an enormous drop. Now, you could argue that every trader in the world listened to his speech, copped the “we’re turning it round” gibberish, and went for it bigtime. I hope that isn’t the truth, because if it is, then I’m going to go long in Imodium. Frankly, I doubt it.
The net result of George’s austere morality-play was a set of savings which, within minutes, tweetaholic MEP Dan Hannan (alleged to be on the same side as Georgie) worked out was less than the next installment of our EU subs. This scissor-kicked own-goal from Dan sadly allowed him to miss a sitter – the decision of the Bank of England (while all eyes were on Squeaky at The Despatch Box) to pump in some heavily disguised QE. Over at the Daily Telegraph, Sarkist bumboy Philip Aldrick obeyed his owner’s orders doggedly as usual, referring to the little-realised fact that ‘Britain’s banks have been given a £70bn shot in the arm to boost lending and aid the recovery after the Bank of England decided to relax its regulations to help growth’.
Have they indeed? Yes they have says student placement Aldrick, ‘The policy was disclosed in the Bank’s bi-annual Financial Stability Report, in which it also warned that households were facing risks from the “current low interest rate environment”. A significant cohort of UK borrowers could experience financial difficulties if interest rates were to rise during a period of subdued income growth’. Ah. Subdued income growth, then. Don’t remember reading about that one on the front page of the Daily Wail.
The amount by the way, just in case you speed-read past it above, was Seventy Billion Pounds. More than six times the total in play in Osborne’s GSR Show.
This development tells us the following:
1. Mark Carney starts work next Monday, and he is already at the controls.
2. Osborne did a complete U-turn yesterday, and used the GSR as a weapon of mass distraction.
3. Either the banks need more money again, and the ‘low interest/stimulation’ branding is bollocks, or the next set of economic data isn’t going to look very good, or both. I’d imagine both, but then I’m a glass half-empty sort of bloke: much more of this, and I’ll be a glass-emptying bloke gaily inflicting historic self-harm.
4. Ed Balls couldn’t hit the side of a barn from three feet: Aldrick’s piece went up at 10.34 am, and none of his advisers spotted it. So Ed didn’t mention this giant subterfuge. Rather, he plumped for the tired, standard point-scoring crap about alleged failure…when available in the public domain was a £70bn admission of defeat, and the evidence that should have allowed him to shout up to the highest point of the Commons gallery through three inches of bulletproof glass, “U-turn!”
Over the last few days, I have listened to good people who have different perspectives to me in New Mexico, Leeds, New York, London, Frankfurt, Sydney, Athens and Madrid. In umpteen ways, all of them informed my thinking. All of them. They might not in many cases perceive themselves to be in the same tribe as me; but we are all on the same side. They’re all bright, funny, informative, and above all decent.
If Labour tried, just for a second or two, to stop reading the economic garbage put out by the likes of of Will Hutton at Guardian Group, and did a proper job of briefing its goose-stepping Shadow Chancellor, they might score a few more hits….as did, unusually, Ed Miliband during PMQs yesterday.
If Camerlot tried, even for a nano-second, to put all Britain’s citizens at the centre of its policies, there would be few if any hits the Labour leadership could land on them. Instead, Team Dave allows endemic sleaze and multinational backside-licking to let people like me and thousands of others catch them out every day….without fail.
But none of the Power Machines at Westminster are ever going to do either of those things: their deaf blindness extends to everything except self-glorification and survival. We do not need heaves to the Right and heaves to the Left: we need decent folks to cleave together and try some creative new ideas. That’s why the cloning-machines have to go….and they will go. Weaving from side to side isn’t going to cut it any more: we need to go forward, and we need to free ourselves from habit, fear and arcane, dated ideologies. Our self-styled leaders aren’t radiating ideas and hope, they’re draining our lives of money and meaning.
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