What’s a realistic price on Gordon?
August 18th, 2006
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At what stage is it worth betting on the Chancellor?
The above chart shows the best betting price available on Gordon Brown to be the next Labour leader shown as an implied probability.
This morning on the Betfair betting exchange you could get 0.44/1 - which for those less familiar with betting prices means that an investment of £100 would produce a profit of £44 on top of getting your stake back if he made it.
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So is that good value given that the Labour Leadership contest must be getting closer?
For those who argue that he’s an absolute certainty then the only risk is the timing. You might have to wait a year or so for the contest so your money would be locked up but there would be little risk. I don’t take that view.
We last discussed this in June when somebody wrote to me asking whether he should tie part of the lump sum from his pension up in betting on “the near certainty of a Brown victory”. At the time the price was 0.38/1 - so a £100 bet would produce a £38 profit.
The general consensus then was that it wasn’t worth the risk and as the chart shows there has been an easing in the Brown position over the past two months. So the mood on the site was correct and if this man had waited to put his £10,000 on he would have got much better value. My understanding is that he has kept his cash in the building society.
For months I have taken the view that the certainty of a Brown victory was less than the betting odds - if only for the great Harold Macmillan dictum “Events Dear Boy - Events” the quotation, attributable to the former Tory PM regarding the thwarting of best intentions.
I bet put money on Brown at the start of the year when the price was at just under 0.5/1 and I got out of the bet when it tightened to 0.4/1 leaving me with a little profit at no risk should Gordon end up doing it.
I think that there is going to be a contest and Brown will not get his hoped for coronation. Provided he’s facing a serious challenger there will be a further easing of the price and, maybe, 0.7/1 would prove tempting.
Mike Smithson
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Starting by being just a wee bit off topic, - for which apologies to all and sundry - but what about this from the Guardian?
“The Conservative and Labour parties will be criticised by the Electoral Commission next week for breaking the law by failing to disclose hundreds of thousands of pounds of donations from supporters.
Next week’s figures will contain a “significant” number of late donations after the commission found considerable discrepancies between recently published constituency party accounts and disclosures made to them last year.
The discrepancies were revealed after a formal complaint was made to Sam Younger, the commission chairman, by Brian Jenkins, Labour MP for Tamworth, against seven Tory constituency associations for failing to report support received from multi-millionaire Lord Ashcroft.
Some £72,000 worth of donations had gone unreported from Clwyd West, Calder Valley, Brighton Kemptown, Monmouth, Shipley, Tamworth, and Wellingborough. Nearly all were sent to the associations from a company, Bearwood Corporate Services Ltd, used by Lord Ashcroft to fund favoured Tory candidates standing in the previous election.”
Several points of interest here, aren´t there?
No mention of at all of Liberal Democrats, who appear to be totally in the clear on this one. As one would expect.
All of these are Labour-Tory marginal seats. This tends to suggest that the noble Tory lord is particularly interested in this type of seat - not so much in Tory-Lib Dem marginals.
What was not particularly clear in the report is whether these late reportings of Ashcroft donations are recent or in the relatively remote past: ie, just before the last general election. If they are more recent, they are surely of increased interest to us here, are they not? Because they are just hints about the future.
Seems that Ashcroft likes invisible Tory policies (Chameron-lite)?
Or is he just betting on the Tories returning to traditional form, if ever they should come to power?
Were you asleep during thye general election campaign, Sage?
Mike, just a quick question from a statistical illiterate… How do you convert betting odds like 0.44/1 into a probability percentage, as shown on your Brown graph today? Is there a simple way of doing this, or is the maths outrageously complicated? What would the 0.7/1 odds you say would be tempting on Brown be in terms of a % probability?
I agree with Mike & the previous consensus. Whilst a 44% return looks attractive prima facie for 12-18 mths investment, there is insufficient risk premium here. An interesting question might be “at what level of return would you be willing to take that risk?”. I think if the price were evens, I’d definitely pop a grand on it. Perhaps also if it were 0.75/1, but anything below that and I don’t think it would be a sound investment.
Re Sage’s post above, I suspect that it’s only Con-Lab marginals being quoted as the complaint was by a Midlands Lab MP. I think we can all quote a dozen or so Con-LD battleground seats that were in receipt of Ashcroft cash. As the law stands, there’s nothing wrong with that per se, but it doesn’t surprise me that the reporting has been messed up. Local associations have had plenty of time to get their house in order and if the Electoral Commission wants to retrieve some credibility it ought to punish them properly - preferably in the pocket.
3. To convert “x/1″ odds into a percentage divide 100 by “x+1″. 0.44/1 = 100/1.44= 69.4%. 0.75/1 = 100/1.75 = 57%
5. cheers
1. My understanding is that these were all donations that were specifically for campaigning costs in each constituency in advance of the last election i.e. before the dissolution last April.
re 3 & 5. When I started putting up betting price charts on the site I did it by basing it on the betting odds. The trouble is that when some person or party was advancing say from 3/1 to 2/1 the chart showed a decline and vice versa.
So I switched and Alex’s 1/x formula is correct.
I think Tory Insider is correct. Peter Bradley’s analysis showing that the Tories outspent Labour by up to 10-1 in selected marginals (including his own) was based entirely on this - they took advantage of the fact that spending limits only kick in during the final weeks. The Tories tried to buy the election in this way, perfectly legally (it’s only the late declarations which are not lawful, if so), and the fact that this is legal is another reason, together with the perceived association of donations and peerages and the difficulties associated with some big donors for each party, why most people agree in principle that something needs to be tightened up. The Tories have historically had access to more money than the others, in an average year, and it’s difficult to draw up rules tight enough to prevent them (or anyone else who currently is richer) exploiting them. But the United States shows the awful example of what happens when you simply let it rip: Congress members spend much of their time simply trying to raise campaign money (something I and I guess most MPs think about for maybe 15 minutes a month).
On topic: we’ve sort of done this to death recently, I think, but a sort of consensus has emerged here - there is likely to be a contest, Gordon is extremely likely to win, but it’s a mistake to back an odds-on favourite a year or two in advance, if only because you’re tying up lots of money for a modest return which is not absolutely guaranteed. Isn’t there a market where you can lay off earlier bets at an immediate profit if the price changes?
8. The implied percentage is also much easier for the viewer. Under a graph of the traditional odds, a movement for one candidate from 50/1 to 40/1 would show a decent drop; a decline from evens to 3/1 on the same graph would barely register but would be far more significant.
On topic: Gordon is the default position. If he doesn’t mess it up and no-one else emerges from the pack, then a succession this parliament will go to him. What are the chances of either? He’s been in post for heading towards a decade and has rarely gone wrong, not least because of his tendency to go missing when there are controversial issues around. It’s therefore highly unlikely that he’ll put a foot wrong politically. The other danger on that front is that the economy turns sour. While there are some clouds on the horizon, there doesn’t seem to be anything that is likely to bring about a severe downturn in the next couple of years, although the prospect of higher mortgage payments and tax increases means there shouldn’t be much of a feelgood factor either. I don’t see more than one chance in ten of him being ruled out for these reasons.
The second possibility: that someone else emerges as the ‘not Brown’ candidate is more plausible, but there are few candidates at present. Choosing a PM rather than a party leader requires a heavyweight candidate - or at least a candidate from a heavyweight job. Reid could satisfy that criterion, but will he appeal to Worcester woman and all the Tory switchers that Blair won in 1997? After him, it will probably take a reshuffle as all the other possibilities are likely to be so far out of the limelight that they’ll have difficulty making the starting line. The consequences of picking an outsider over Brown would be enormous. That said, John Major was barely known to party members, never mind the wider public, in September 1988 - the equivalent point in the parliament. Even so, a reshuffle to create that possibility requires either Beckett or Prescott going before Blair. Both have reasons - and reputations - for being ultra-loyal. Chances of another serious candidate - about two out of ten.
There is one other possibility - Blair remains the most popular person to lead the Labour party into the next election, and doesn’t stand down this side of it. If that happens, Brown will never get his turn.
Conclusion - between 1.4 and 1.5 is about right based on a two-year return, but the 50/1 available on Blair staying until 2010 or later might have more value.
See Labour are so short of money they are now trying to get taxpayer to cover conference security costs:
http://news.bbc.co.uk/1/hi/uk_politics/5260942.stm
Her’s an idea - cancel the Conference; as a taxpayer I’d prefer the cash to go to improving security for our soldiers in Afghanistan.
We have done the Gordon succession to death over the last months, and I suspect we will do it some more
Given the time frame, and events, I agree with Mike it is not good value at the moment. I am also pleased that the person with the pension did not buy at the top of the market.
I also agree that this far out I’d want closer to evens.
The longer that Brown is ‘kept waiting’ the less likely that it will be he. This whole thing looks to me like who ever takes over is being set for an almighty fall.
Labours term in office is like a marathon. Blair does the 26 miles and then hands over to probably Brown to do the last how ever many yards. Brown then crosses the finishing line which is the defeat to Cameron at the next election.
Result: Blair goes down in Labour history as their greatest ever leader giving them three terms/ Brown (or whoever) as the man that blew it for them.
1- Sage. Have you forgotten about the Libdem’s biggest donar then? Some kind of fraud or something?
Would be great to see Gordon Brown’s sulking if he lost out and didn’t get the job!!!
14 - ouch !
one for the chicettes
[10] I think you’ve pretty much covered the ground. All I can add is that if “Dr” Reid has the sense people seem to credit him with, he’ll stick with the Home Office for a while - it may be a bed of worms and a can of nails, but he hasn’t been in any Department for long enough to succeed or fail there (say 2 1/2 years at least) - he needs to convince people other than TB that he can actually do things…
On the “pre election” funding question, I wonder why the Tories don’t just come out and say that spending limits will always be abused and therefore they’ll just abolish them…
14/16 Cheek O/crossland. Tories moaning about political donors is like Hitler complaining about gas bills !!!!
Result from yesterday’s only council byelection ( see post 189 on yesterday’s thread for previous result ) was LibDem gain from Independent .
Lewes DC Ouse Valley and Ringmer LibDem 715 Con 521 Seagulls 359 Labour 41
An abysmal result for Labour and a surprisingly high vote for the Brighton FC supporters party ( I only expected around 100 )
No sign of Cameron inspired Conservative recovery in Lewes .
15. So what would Gordon actually do if he didnt get the job? Can’t imagine him kicking his heels on the back benches, and can’t imagine him serving in the cabinet under anyone else. I need a new gardener, perhaps he would like a change of career??
18. Or like a Scotsman whinging about state handouts ?
1 - “No mention of at all of Liberal Democrats, who appear to be totally in the clear on this one. As one would expect.”
Well yes, I suppose one would expect that. After all, who in their right mind would give money to the LibDems?
22- Someone with money to burn?
Some good posts this morning and a pretty strong consensus on Brown’s takeover. I will add to it.
Mike is about right although personally I would want closer to evens before committing a serious sum. I seldom back odds on and this doesn’t seem a good time to break the rule. Tory Insider (10) puts the case beautifully and there nothing much more to add (although being PBers we probably will).
Nick P at 9. Extrabet is a fairly new firm, a spin off from IG Index, I believe. It aims to offer exactly what you seek - a straight punt that you can lay off without going through the exchanges, i.e. a sort of compromise between conventional,spread and exchange betting. I used them to some effect during the World Cup. Unfortunately that they offer only one Politics bet - the next UK General Election. Maybe if a few of us emailed them, they would offer some more options.
And the link to Extabet is ….http://www.extrabet.com
19- Mark. I wouldn’t get complacent in Lewis.
I hear it is a conservative target and I can see them winning it next time.
26. They will need to get the name right or they may end up a long way from Sussex.
26 Obviously you do not know the area then ( Lewis is in Scotland !! ) but if the Conservatives want to apread their resources too thin and target Lewes rather than winnable seats fair enough .
27- Would be great to win Lewis too but hey Lewes will do!
28- Oh it’s very winnable…
30 - Evidence please ?
29. LOL!
Sorry, Chrisco, I couldn’t resist! I’m really not one to mock typos and spelling errors. No matter how many times I poof read my postings, some error always slips through. I like to think it adds to the entertainment value but I suspect people just think I’m stupid.
31- Libdems slumping, Conservatives soaring, boundary changes, Baker standing down?
Could make up a bar chart if you really want me to.
No LibDem slump in Lewes yesterday , No Conservative soaring yesterday , No boundary changes of any significance in Lewes . How much money are you prepared to put up to back your point of view ?
If Brown (or whoever takes over) doesn’t call a snap election I can honestly see a landslide of 1997 proportions for the Conservatives.
How low can Labour go is the questions, regardless of a leadership change?
This country is, for the want of a better word, screwed. In ‘97 I thought it would only take a couple of years for Labour to make a total mess of things. I admit I was wrong on that.
It took time to dismantle the solid foundations and burn through the huge cash and gold reserves etc.
To be fair, there were some mistakes to correct, but in general the majority of people were fairly treated and the cost of living, house prices, council tax and energy bills were fair compared to the average wage etc.
So, with New Labour it’s been a slow burner. The opposition taking time to re-group and get the peoples trust and confidence back while Blair offered hope to many early on.
We now have rising inflation, rising unemployment due to direct government policies, massive rises in the cost of property leaving many without a hope in hell of owning a house without a life time mortgage, the cost of living at a rate unthinkable before a Labour government, high taxes on everything - even when you die and those dependant on the state realising that they are much better off staying that way, millions of people dependant on working for the goverment…
ALL of these issues, the goverment of the day can have a direct influence on and step in to avert future problems.
I could go on.
Labour have failed us badly. They know it too. Whatever you say about Thatcher’s and Majors government and the mistakes they made (every government does). What Labour have done is destroying the very fabric of our nation before our eyes.
Matt.
re 35. I find it hard to see how the Tories could achieve a landslide of “1997 proportions”. Remember in 1992 John Major was 8% ahead in the national vote but only squeezed in with a majority of 20.
The most optimistic polling numbers for the Tories at the moment would still leave them short of a majority. Your only hope is that the polls are as bad in over-stating Labour and under-stating the Tories as they were in 1992. But there have been massive changes in the pollster’s methodology since then and I would not bet on major variations.
Given all their problems Labour’s vote seems to be holding up reasonably well.
Matt
Your bonkers. This has been the best government ever! You must be a very young man with a very short memory.
35 Oh for heaven’s sake , I am not a Labour supporter but this doom laden statement is so exagerated that it is far removed from the real facts as most people in the country experience life .
The Labour government deserves criticism of many things but such a blanket over-distortion does not serve any useful purpose .
Here we go again! The GB thing is being done to death. Historically Labour does not decapitate its leaders, the Tories are the brand leaders there. ‘The quiet man is here to stay,and HE’s TURNING UP THE VOLUME!. Labour leaders either retire, or most usually go in the wake of a GE defeat. TB will find it very difficult, to go through the next conference, without naming a date. My guess would be May next year, GB will take over, the GE about two years later. Only a moron would try to guess the result of a GE three years away, so here goes: on present form, Labour will ‘probably’ win. The Tories are not showing the sort of form you would expect after 9 years of a Labour government. If the opposition does not have a 10/15% lead at this stage, it would take a political earthquake of ERM dimensions to hand them the next election. A political earthquake may be on the way, but my money is on Labour, at the present.
36 - I tend to agree. It’s hard to translate opinion poll %age into seats gained and lost and we may or may not be able to pick up more than UNS would predict but I personally think it’s unlikely we’ll see a 1983, 1997 or 2001 type result anytime soon.
37 - Even as a Tory I disagree with much of what Matt says although I think there may be some longer term problems but I think it’s very difficult to judge ‘best ever governments’ due to the different circumstances they find themselves in.
39..or corruption
If Brown is the man - where is he ? Longest paternity leave in history…
“We now have rising inflation, rising unemployment due to direct government policies, massive rises in the cost of property leaving many without a hope in hell of owning a house without a life time mortgage, the cost of living at a rate unthinkable before a Labour government, high taxes on everything - even when you die and those dependant on the state realising that they are much better off staying that way, millions of people dependant on working for the goverment…2
Rising inflation? Lets see inflation at approx 2-2.5% and going down according to this months figures.
Unemplyment rising? Yes, but employment is at historic high, rising unemployment is due to influx of immigrants and the govt forcing people to look for work. A pool of labour will help moderate wage increases and thus inflation. A Tory govt would do the same I feel.
Mortgages are high, but that has been ongoing for years. One benefit is that money is passed down from people when they die to enable their children or grandchildren to benefit. And who wants to live in a country with falling house prices? Sureley the fault lies with the govt who scrapped any controls on bank lending? eg 5 or 6 x income!
Yes the economy is going through a slow patch, but thats expected from time to time, but we have not had a recession or a bust and are unlikely to do so.
Comparing that to Thatcher and Majors record stands pretty good I think. Thatcher early govts can take credit for many structural refroms to the economy that are still benefitting us, they are still in place. Almost all the rest of Thatcher and espcially Major years were an economic mess, continually behind Europe and USA. Britains now enjoy greater standing of living than ever!
Oh to see things through the eyes of a dyed in the wool party supporter. (Matt) rising inflation, high energy prices, soaring house prices, could be the UK in the wake of the collapse of the Lawson boom. Energy prices: in 1979 when the Conservatives came to power: domestic gas prices were judged to be too low, so they were raised by 9% per year for four years,(energy minister David Howell, now Lord Howell of Guildford) the resulting 400million pounds per year was creamed off and not used to improve our energy transmission industry, it was frittered away in tax cuts. Soaring house prices, Nigel Lawson’s decision to end, the so called double bubble on mortgage tax relief i.e. relief was given to the person and not the property, its announcement was given three months before its ending, sent house prices through the roof, resulting eventually in the misery of negative equity. Inflation soared to 11%, massive rises in interest rates, resulting in deflation and recession, throwing millions of people out of work, myself included. To cap it all, this was followed by the ERM disaster, David Cameron being of course special advisor to the then Chancellor Norman Lamont, what was his advice, to dear Norman’ Gosh Norman, are we in the shit’ The shit being inside the bucket that Kelvin Mackenzie threatened to pour over Major’s head.
There is plenty about this government I don’t like, but so far it hasn’t cost me my job and it hasn’t cost me my home, when it does I’ll hate it as much as I came to hate the Tories.
35. Have you been smoking something? The conservatives didn’t leave “solid foundations” in 1997. They left debt at 53% of GDP (having managed to double the national debt in the previous five years). It took a Labour govt to sort it out.
Re the thread - the Gordy succession has been done to death. How about focus on something else? What about Ming Campbell? Out of curiosity, will he survive the Lib Dem conference, or will they stick with him having traumatised themselves over Charlie Kennedy’s departure?
44. I’d like to think that was a spoof post, but looking at the story linked below it really does seem that the government has a deliberate policy of driving down the wages of the low paid and creating a ‘reserve army of the unemployed’.
All very strange…but perhaps no surprise given the nature of the people now in charge of Labour - nannies and household help are so expensive these days, aren’t they?
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/08/18/nmigrant18.xml
45. It’s good that this government hasn’t cost you your job or your home. However, this government HAS cost MANY people their LIVES, due to its appalling war in Iraq.
Say what you like about Late Thatcher/All of Major - they didn’t bomb countries into bloody mayhem, on a pretext of lies and deceit.
46 snowflakes- good post yesterday re: Reaganomics.
Matt- 35- is typical of the right, desperate for an economic collapse so they can sweep into power to benefit the rich again (ie Bush)- but get this the centre left over recent years are proving to be good economic technocrats- they have finally figured out that you need a stable and strong economy to fund a progressive reform programme
Mike,
Just a point I feel that the Graph is just a little bit dodgy. IMO it should really either include zero on the y axis or some indication of the variation of betting prices from different bookies. It’s a bit misleading as is standalone. It’s the physicist in me coming out.
We all know that Brown is still way ahead of the pack, but his support at the bookies has fallen. But it really is still quite a small drop and how does it compare to the noise? Genuinely interested.
BTW What is the size of Brown market, is it small and has it changed much recently. I guess there aren’t many people bothering. Roughly how many punters are there? As such I guess the absolute odd would need a pinch of salt.
49 - Tyson the idea that anyone wants an economic crash is offensive rubbish. I don’t want to lose my job for any reason irrespective of who gets into government afterwards and I’m sure most people on the right or left feel the same.
48 No they just sold Iraq the guns that are being used to kill today.
51 - aha. But you see so many hardcore wannabe Tory politicos work in the shadowy world of parliamentary “researchers” / lobbyists / quangos, etc… and these people probably consider their jobs relatively safe even if there was a crash. So would welcome it if it led to their lot winning - it would actually enhance their grubby little careers.
I also agree with Tyson’s statement on the basis that the very rich, who surely control right wing political parties the world over, can line their pockets even in the event of an economic crash - its just the little people (some of whom foolishly represent / support said right wing parties) who really suffer. If you knowarramean.
Here is a very interesting article by Craig Murray (former ambassador to Uzbekistan, sacked for speaking out about dodgy “War on Terror” activities). As well as questioning some of the official story behind the alleged aircraft plot, he says some very blunt and interesting things about John Ried’s past activities…
http://www.craigmurray.co.uk/archives/2006/08/the_uk_terror_p.html
49. 53. Back to feeble wind ups again today it seems…
56 - not really. I actually do think there are a lot of very immature people running around Parliament in “researcher” roles and the like, extremely politically ambitious, some of whom are foolish enough to welcome an economic downturn just so there party can get in power. I don’t think that is a ridiculous proposition.
I have first hand experience of said folks. Used to dabble myself donchaknow.
Anything Tories don’t like to hear on this board is written off as a wind-up, or as being written by ColinW, and is dealt with offensively. So boring.
56 - I’m afraid so Wag. It’s a shame they can’t have a thread of their own where they could rant all day about the nasty Tories whilst reminicing about biting Evander Holyfield’s ear and getting to dance behind Rachel.
re 50. The graph shows the best price you can get at any one stage and mostly relates to the Betfair market which has seen getting on for £200,000 traded on Brown. I’ve no idea what the conventional bookies have taken. I agree that’s it’s not a lot compared with a Premiership soccer match but quite a lot for a long term political market.
I take your point about y axis but I’m not a physicist and like to produce something that looks interesting and shows changing sentiment.
I can think of by-election bar charts and graphs from all the parties that are far more distorting.
[55] This comment from Craig Murray has been doing the rounds- in the Guardian today, I think.
Of course, if he is right, then Reid should be tarred and feathered and forced to pay for the damage that he caused- £300 million, last count.
I know, I know… forgive me for being a little mischievous and depressed today about the direction of the country. A lot of the time I am far more balanced!
Still feeling down though, so heres some more ramblings:-
One thought is, how many of the current ‘problems’ facing the country are a direct result of Brown’s actions? - this is a significant issue to muse when talking about Brown as PM, when or even whether he will take over etc…
“Rising inflation? Lets see inflation at approx 2-2.5% and going down according to this months figures.”
Ok, point taken, but the Bank of England expect it to rise to 3% and interest rates are only going one way. They also suggest it may come back down after that, but who knows…
Depends if you see the cup half empty or half full.
It just feels to me that we have a chancellor who has been juggling too many plates for too long.
Who wants falling house prices? Agreed, no one really - but that’s not the point. They shouldn’t have been allowed to vastly inflate over the last 9 years should they?
What good is it if property is allowed to increase way above the incomes of a majority of the population? - It’s all right for us who have property, but what about the millions who don’t?
Is it fair that first time buyers face a £150k mortgage for the most basic home in many areas when they will be earning less than average wage?
Even if you are earning above the average wage, you’ll struggle to get a decent home unless you have a joint income and are willing to pay half at it in re-payments.
Parents are increasing unlikely to be able to help them because they are also being squeezed till the pips squeak. Hands up who is actually able to put money aside for savings these days unless you don’t allow a holiday etc?
This is how an increasing amount of people are feeling at the moment.
Also, utility bills increasing? - What have Labour done to get a grip on this ?
… and how long do problems cease being the fault of a previous government when the current one has been in power for nearly a decade?
“Unemployment - A Tory government would do the same I feel”.
Probably, but the causes would have probably been different. Many of those who choice not to work, for many reasons, won’t change whatever the government unless it’s more beneficial to do so.
“Yes the economy is going through a slow patch”.
Agreed, I feel the economy has been propped up for far too long based on a tax and spend policies at the heart of Gordon Browns long term plans. At first they worked. Is it working now?
On the landslide issue, I’m suggesting this could be a likely event in a couple of year’s time, not now based on they way ‘I’ see going. Just my shout.
Unless Brown, or whoever takes charge is going to significantly change New Labour’s direction, I can see no other outcome really.
“Your bonkers. This has been the best government ever! You must be a very young man with a very short memory.”
Best government ever? - maybe for some people yes.
Matt.
[60] Might explain GBs silence though, don’t you think?
59 Would never accuse you of distorting anything. Just genuinely interested about what’s going on and as such trying to tease a bit more out of the “data”. Brown’s price is clearly on the way down, but how significant is it and why? Is it just five punters or thousands?
If it’s the former. Could it be a PBC effect?
61 - Matt , you are supposed to be a Conservative . Conservatives believe in market forces and a minimum of government interference into the way markets operate .
It is market forces thar have driven up house prices and utility bills ( for different reasons ) . As a Conservative you should be rejoicing in the operation of a free market in these areas . To be asking for the government to have intervened and somehow kept house prices and utility bills low begs the question that you are not supporting the right party for your beliefs .
58. I think this site is becoming a victim of its own success. Because it is so widely read, it increasingly attracts loudmouths who love the sound of their own voice (so to speak) whatever drivel it is they actually come up with.
It’s suprising there aren’t more wacky conspiracy theorists though - have a look at some of the comments tacked on to the Craig Murray article quoted further up the thread to get an idea of what we are ‘missing’…
What could get interesting is that Airline lawyers are now crawling over the situation, look for ways to recover the millions they have lost. If it looks like there could be any hint of politically motivated hyping of the risk, then the govt will be on very shaky ground if the airlines start demanding big compensation. A public enquiry to justify the actions would be out of the question with lawyers crawling all over the place. And companies wanting £300m compensation arent going to be fobbed off with “because the police said so”.
64. “Conservatives believe in market forces”.
Only to a certain extent. I’m finding this to be a bit of a fallacy at times. A certain local (elected) Tory admitted to me a few months ago that they “hated all that theoretical stuff” and that “all TRUE conservatives* recognise the limitations of markets”.
*They may have meant Conservatives, or both.
Re 45 Is it only me who finds that a Labour supporter’s celebration of money being handed down the generations pretty funny. A return to feudalism from new Labour.
68. Only one of several bizarre arguments in that particular post.
61. Property prices are a function of supply and demand. The prices are the reflection of the actions of thousands of individuals. No one in the govt told anyone to overpay for their property! Or to gazump or to overborrow. Govt doesn’t interfere in these private decisions (and why would you want them to?). They could make it more expensive to buy and sell speculatively by increasing transaction costs (eg stamp duty), but people like yourself would be the first to moan. You can’t have it both ways.
Also, I’d like to point out that it was the Tories who relaxed credit controls. This govt has stepped into to cap the interest charged by loan-sharks, but other than that, they can’t dictate to banks/building societies how much to lend and whom to lend to. I would imagine that the lenders were competent to manage risk on their own without govt stepping in.
Re utility prices - the utilities are privatised arn’t they? The whole point of privatisation was that it was believed that private managers would be better able to predict demand, and supply it than if there was govt interference. It turned out that some of the utilities failed to build adequate gas storage facilities (eg Brit gas closed some, and didn’t build new ones and got caught out when demand surged and they had to buy emergency stocks in the wholesale market and pay top dollar). It’s not government’s fault if a private company failed to run their business properly. They are private! Are you now saying that on top of everything govt should micro-management private businesses?
In any case there isn’t the capital available to re-privatise these companies - the Tories spent all the money they raised from privatisation on paying for the consequences of Black monday.
PS Are you sure you are a Tory? Your whinges sound distinctly Old Labour.
70 Snowflake… what you say about the Tories spending privatisation money on paying for Black Wednesday is extraordinary rubbish. (I’m a LD who opposes many of those privatisations so no axe…)
65 - You may be right Commentator. The constant (lengthy) diatribes from certain posters are begining to get just a little tedious. In the dim and distant past the site was more about what political outcomes would be rather than Labour are good Tories are bad or the other way round.
I also find the need for some posters to insult supporters of opposing parties in nearly every post they make fairly pathetic.
70. ‘Snowflake5′ - the two main reasons for the increase in house prices are the drop in long-term interest rates and a lack on new supply. House prices themselves are not that relevant when people decide how much they can afford: it is the monthly repayment figure that is important (and to lenders, too). Lower interest rates means lower repayments means greater affordability, which leads to higher prices as supply is relatively static.
Of course as you’re so keen on free markets, presumably you’d like to see most planning restrictions abolished to enable the release of all the new housing supply that they’re currently holing back.
It has always been a feature of terrorist alerts that the authorities help the terrorists by adding to the disruption, generally for good reasons.
It was the same when the IRA were active. Small car bomb followed by the police closing the streets for three days to collect forensic evidence. Plus ca change …
71. jon - the money they raised is long spent. Perhaps not all on Black Monday, some went on interest payments on the debts they took on, some on the increase in social security outlays following the recession and the unemployment it created.
But the money was long gone, way before 1997. In order to re-privatise, the govt would have to compensate all shareholders at the market rate. It would cost billions that the govt just doesn’t have. Are you prepared to pay a one-off utility-tax to raise the money to pay for it? If the answer is no, then you need to shut up about it and live with the situation.
73. Well old John Prescott did try to get some extra housing built and met a storm of protest from NIMBYs. You can’t have it both ways.
I think the govt could do more to move people north. They have transferred most govt functions north, but perhaps some incentive is needed to get private business to relocate north too. It’s somthing to look at (but also sensitive as southerners hate the idea for incentives for the north, while complaining at the same time that the south being too crowded i.e. again wanting it both ways).
75. That should have said “re-nationalise”
Further to Matt on energy prices, ‘what are the government doing to get a grip on them’ nothing and why not, because they are now in the ‘free market’ something which he as a Tory should support! What does he want interference in the ‘free market’ typical Tory they are all for the ‘free market’ till it starts to hit their pocket, then up goes the cry ‘the government should do something about it’ not ‘the last thing we want, is the government, to do something about it’
As for the housing market, the answer is simple its always been simple, which is why governments don’t do anything. Stop hoarding land! Take away all of the subsidies to the farming industry, billions of pounds every year squandered on wealthy landowners, some of the wealthiest people in the country. I know ‘poor old hill farmers etc’, answer to them is simple, declare yourselves bankrupt and get out. Open up the countryside to the ‘free market’ let in the developers etc., the housing crisis in this country would vanish. Then watch the ‘Max Hasting’s’ clones and all of the rest of the nimbys start to squeal, concreting over the countryside, blah, blah, blah. People like Hastings can live in some ancestral pile in Kent, lets squeeze everone else above a fish and chip shop in Bromley high street. Funny Tories always believe in the ‘free market’ for every one else, never themselves, for them its always ‘Socialism for the rich, lets have a welfare state for the wealthy’
Quote from Sean Rickard once the chief economist for the NFU, ‘The subsidy system for British farmers is the greatest criminal conspiracy to defraud the British taxpayer ever devised,’
That Craig Murray piece, pooh-poohing the whole Liquid Bomb Plot as a government hoax/diversion, looks a bit rum on the day after police find ‘explosive materials’ hidden in a wood. And on the very day its announced that ‘every single police force’ in the country is now investigating this plot.
Or course, I guess the whole thing could be a load of cobblers, made up to take our minds off the cricket, or somthing…
The stuff abiout Reid is mind-boggling though. He was a hired thug?!? Makes Paxman’s remarks about Reid look positively over-polite. If it is remotely true he could never be Labour leader.
75. Ahem, sorry to interrupt this fantasy but in the eight quarters that followed ‘Black Wednesday’ the economy grew by an average of 0.9% per quarter and unemployment fell.
As for the ERM exit itself, the Bank of England’s trading losses were about GBP800mn, which is chicken feed in the context of the overall public finances. Where the government of the time may be legimately criticised is for its boneheaded decision to enter the ERM in the first place, and then stay in even when it was obvious it was deepening the 1990-1992 recession.
65, 72: Tend to agree. A problem is that the long dearth of polls has given us nothing much on-topic (i.e. what we think will happen, as opposed to what we think about the parties) to write about. It’s a snag of the blog concept, that there has to be something every day, rather than when there’s something new.
Local by elections this month, Lib Dems seem to have been on a mini roll particularly in their stronger areas. Presumably its the Middle East etc.
Looks as if the Conservatives require a good or very good conference. No doubt DC will grab the headlines but which ones?
80. Fred - borrowing was increasing at a clip from 1992 to 1997 (the national debt doubled in those five years). By 1997 the govt was spending more on interest payments than on schools. the National debt was 53% of GDP at that point. So the clearly the Major govt was not raising enough from tax and privatisation to meet their bills, hence the borrowing. The money raised from privatisation is long spent - that’s the moot point. And no one wants to pay extra tax to re-nationalise. So I’m not sure what the point of this whinging about utilities is about.
81 - Very true Nick. At the moment we all seem to be second guessing what the public think on a variety of issues but we wont know their impact untill the polls come out.
And on that note does anyone know when the next poll might be out?
81. To vary things Mike Smithson could start doing articles on the congressional elections in November - they look to be very interesting.
85. Are there any bookies taking bets though ? This site is supposed to be about betting - have you ever placed a bet on politics ? Obv you an expert in spouting the party line/lies but this is a betting site.
I’m neutral on Gordo, in hock on Johnson and well up on Reid and Hain. Also backing Tone to stay past Jan 2008 in a big way.
85 - I did see that Jimmy Carter’s son is going to run for office in Nevada. Does anyone know if he’ll get in?
Apparently in a recent Nevada election a deceased candidate got 18% of the vote - which is pretty good going considering!
83. Stop blustering and accept your post claiming the ERM exit caused a recession and a collapse of the public finances was wrong. The bulk of the expansion in borrowing occurred in 1991-1992 before the ERM crisis. From 1994 onward public borrowing shrank as the economy recovered strongly. The government is borrowing GBP20bn more per annum now than in 1997.
86 - There may be odds given on the Scottish Parliament/Welsh assembly elections which are less than a year away now. Although the lack of polling evidence makes producing articles on them very difficult Very quiet here in Edinburgh Central on the electoral front at the moment. I’d have thought some of the parties would be busy campaigning allready but evidently not!
88. “The bulk of the expansion in borrowing occurred in 1991-1992 before the ERM crisis. From 1994 onward public borrowing shrank as the economy recovered strongly.”
Sorry Fred, but you are talking rubbish. Here’s the figures:
http://www.dmo.gov.uk/bginfo/natdebt.htm
£bn % of GDP
1990 192.981 35
1991 198.703 35
1992 214.528 36
1993 248.839 40
1994 306.871 46
1995 349.163 49
1996 390.683 52
1997 419.546 53
So much for “public borrowing shrank”!!
87. I don’t know. But the Washington post recently posted a poll that showed that Congress was even more unpopular than Bush, and that the Dems were in double-digits ahead in the polls, yet despite this felt very nervous because of fears over the Rove machine. I’d love to learn more about it, as these elections could really affect politics in Britain. For instance, what if a Dem-controlled congress decided to vote to pull out of Iraq? What if it happens before Blair leaves? Could change lots of things.
Are there intial signs that if Prescott’s reputation recovers sufficiently that he may jump soon in the hope of triggering a contest for the leadership?
I am in little doubt that the timetable for Blair’s exit is Summer 07. But Prescott could have the last laugh. He is clearly disgruntled (
72, 65 was not me. Confusing name.
90. That is the total public debt! I was referring to annual public borrowing (aka the budget deficit). For which the figures are -
1990 -3825
1991 -17916
1992 -40125
1993 -50859
1994 -45895
1995 -38574
1996 -29490
1997 -16516
and for which the last annual figure for 2005 is -40695.
I presume you understand the difference.
The ex-Jaguar owner who has no energy saving light bulbs in his house, Grandpa Ming, has just issued a statement on green policy which is the height of hypocrisy.
“Being green is not about inviting the cameras to film you cycling to work while your chauffeur follows behind. Being green takes the kind of political courage necessary to say to people that we can’t go on driving cars with big engines without paying the price and that polluting aeroplanes can’t get off scott-free either”
Before you start attacking others, Grandpa, look at your own life-style.
His party’s record on the environment sucks.
94 - I wouldn’t bet on snowflake5 understanding the difference Fred until s/he gets to the correct page in the ‘A’ level economics text book. Lots of superficial awareness and forceful bluster. Takes up too much space making poorly thought out and often erroneous posts. Term starts soon so the posts will hopefully dry up.
94. Increase in total debt is caused year by year by the increase in annual borrowing! The budget deficit is tax receipts less spending, and the shortfall is made up with by borrowing. And if you increase borrowing faster than the rate the economy grows, then the total debt as a % of GDP rises as you see in the figures I posted for the Tory period. Under Labour the total debt as a % of GDP has shrunk - i.e. we’ve increased borrowing much slower than the rate the economy is growing. And we ran budget surpluses in 2000-2003.
94. All true, but irrelevant. Will you please accept that your claims further up the thread about the impact of the ERM exit on economic growth and the public finances were false.
96. Kingbongo - why don’t you take a stab at explaining where the privatisation money went? Total debt under the Tories was rising sharply, which means that tax receipts and the proceeds from privatisation weren’t enough to pay the bills - not only that, but even with privatisation proceeds to subsidise spending, borrowing was increasing faster than the rate the economy was growing.
Admit it, the privatisation money was blown, which means it’s a bit cheeky for Tories to now complain about privatised utilities.
98. Fred - I refer you to my post 75. What do you believe the privatisation money was spent on? Because spent, it was!
89. Max, I have been contacted regarding dates to deliver leaflets.
National Debt at 53% of GDP is actually quite low by international standards. Labour inherited no financial problems in 1997. Rather, it inherited the kind of economic scenario that most post War Chancellors would have given their right arms for.
Fred is quite right that the PSBR is currently a good deal higher than in 1997, although there’s no doubt that the government can fund borrowing at its current level.
85/87: Last poll had Carter trailing by 21 points, but then the previous poll in July had him only 7 points behind. In general though, most polls have shown at least double digit leads for John Ensign.
100 The privatisation money formed part of government income over the period in question. I don’t see any problem with this.
101 - Glad to here it Chris - where abouts are you based? I was really just talking about Edinburgh Central in particular. I know quite a few leaflets are going out in Edinburgh South (mostly Lib and Lab although I think Labour have little chance of winning). I was just surprised central was so quiet given how marginal it is.
104 Nevertheless, it seems a bit of a waste of selling off the family silver (Macmillan). Not the prudent approach we have come to expect these days.
I am glad that the next Tory chancellor can’t use interest rates politically. Thanks to Labour’s reforms.
105. West Aberdeenshire and Kincardine.
106 Well, naturally, I’d rather the proceeds had been returned as a dividend to taxpayers than go on public expenditure.
106. ‘Prudent approach’ like the sale of the Qinetiq stake to Carlyle you mean?
http://news.bbc.co.uk/1/hi/business/4653722.stm
87/91/03 Nevada Senate. It isn’t one of the top tier Democratic targets but it’s certainly one that might tip if there is a big trend this year. Bush’s approval rating in Nevada is 36% (net approval -27%, the third worst of any state he won in 04). Incidentally, the Democratic candidate for Nevada Senate in 1974 was called Jack Daniels. Another Senate race worth watching is in Virginia, where James Webb, who served in Reagan’s Cabinet, is the D challenger to George Allen who some people were touting as a Presidential possible. The race has tightened sharply, partly because Allen has made an idiot of himself by making a racial slur at a meeting and then offering several unconvincing explanations.
102. “National Debt at 53% of GDP is actually quite low by international standards.”
Yes, you are right, it is low by international standards. But if you think this, why on earth do Tories make such a fuss about the current national debt of circa 40% of GDP - it’s even better by international standards, no?
104. “The privatisation money formed part of government income over the period in question. I don’t see any problem with this.”
Strictly speaking, if you sell an asset you should use the proceeds to pay off a liability. eg, when Labour sold gold, they used the money to pay down some of the national debt.
If you use the proceeds of an asset sale as part of normal income, to finance normal spending, you end up with problems down the line.
eg say someone sold their house, but instead of using the proceeds to repay their mortgage, kept the entire mortgage, and used the proceeds of the asset sale to finance normal spending. In a few years time, the money is gone, but the debt remains, and you have to find something else to finance it. It’s not sound.
“Well, naturally, I’d rather the proceeds had been returned as a dividend to taxpayers than go on public expenditure”.
08 Sean Fear- good idea again!!!!
Much like Bush did with the Clinton earned surpluses from the 90’s. Gave it away in tax returns to the (predominantly) wealthy- ie those who most benefit from lower taxes- and look how America has paid the price.
Typical (again)- the right and economic literacy appear to be diametrically opposed concepts. Another reason why I wouldn’t want to see Tories anywhere near power. Am happy to pay tax to fund public spending (based on my earnings and gains), slightly less happy about losing huge amounts of wealth and savings through Tory economic mismanagement. And yes- I have the t-shirt, and the memory of negative equity, and it ain’t pleasant.
I suppose you are another “believer” in flat tax- another fine idea from the rightwing school of “being clueless about anything economic.”
106 - BoE independence has certainly been broadly beneficial to date and long may it continue but the fantasy inflation numbers being produced (and twas ever so - anyone remember the Tax and Prices Index which was used by Mrs T for a while until it went above the RPI?) show that the BoE are pretty much making it up as they go along. Consistent failure to actually get near the target number over many months (and I mean 0.1%) shows the adage about driving a car using the rear view mirror is still applicable.
Gordos real legacy will not be BoE independence but the wilful destruction of private pension provision.
110. You seem knowledgable about the American situation - what are the chances in your opinion of the Democrats taking control of Congress?
110/91 - Consensus is that Allen should still win comfortably in Virginia, but he has probably done himself some damage if he seeks to run for the White House in 2008. Even if the Democrats won the House and Senate in November, I don’t think that they could get the troops out of Iraq as that falls under the President’s responsibilities. Obviously would make for political difficulties however
“Much like Bush did with the Clinton earned surpluses from the 90’s. Gave it away in tax returns to the (predominantly) wealthy- ie those who most benefit from lower taxes- and look how America has paid the price.”
The price of rapid economic growth, you mean?
115. I was under the impression that only the execution of war was the President’s responsibility, but the declaration of war and the ending of it were down to Congress?
Lewis @ 110: Ah - George Allen, I was wondering who that was. I caught just the tail end of the story on Radio 4 in the week, saying it may have put an end to his ambitions of a President run, but I had missed any mention of who the story was actually about.
116. Growth has been slower under Bush than under Clinton. And Britain grew faster than the USA from 2000-2003 inclusive.
when Labour sold gold, they used the money to pay down some of the national debt.
How much did we lose when El Gordo dumped gold at its lowest price to buy the Euro at its highest?
Snowflake5, you are almost as funny as roger before he got all independent minded and uppity.
117: Declarations of war are down to congress, but of course no one ever makes formal declarations of war these days and most conflicts are, like Korea and Vietnam, undeclared wars. As Commander-in-Chief, prior to 1973 the President had pretty much a free hand in such undeclared wars.
The War Powers Resolution in 1973 says, in effect, that the President has to consult with congress before entering into military action and can only send US troops into action for a period of 60 days unless he has the approval of congress.
117 - True, however the US Congress has not formally declared war since WW2. The Iraq, Vietnam conflicts are technically authorisation of military operations.
A good site for following the US 2006 elections is at the New York Times below..
http://www.nytimes.com/ref/washington/2006ELECTIONGUIDE.html?currentDataSet=senANALYSIS
120. We paid off debt with the proceeds of the gold sales. It was around the time yields were over 7%, so we made a saving. (Cost of redeeming the bonds in the market when yields were 7% was lower than redeeming them when yields are 4.75% as they are now). Plus we’ve saved on paying out the coupons these last eight years.
120 Not as much as you would think. It’s a bit of a myth. There was a long good quality thread a month or two ago where that was kind of laid that one to rest. The bonds and equities that were purchased earned dividends. The rise in the remaining gold reserves offset much of the “loss” too.
121. OK, thanks. I’d read somewhere that senators were pushing to have a vote on whether troops should remain in Iraq, I take it that would only be a guidance vote, and the decision would remain with the President?
120, whereas the Tories gave billions to George Soros on black Wednesday…
Don’t worry snowflake, soon the Tories will have convinced us that negatitive equity, recession and 3million unemployed were figments of our imagination and we’ll return to the Conservative paradise which was 78-97.
16 Sean fear
Bush had managed to turn the largest US budget surpluses into the biggest defecits (predominantly through his largesses of tax dividends)- resulting in massive (and current) real cuts in welfare based public services, and something like 18 continuous interest hikes.
What I mean by voodoo economics more like.
Just interested- what would you prefer- lower taxes for the few, or better public servicers for the many because you cannot have both. Just to load the question a bit- poor people die through inadequate access to health services, rich people do not die through paying more tax.
125: No, it wouldn’t be guidance at all, it would be binding. Congress gave President Bush permission to use troops in Iraq under “The Authorization for Use of Military Force Against Iraq Resolution of 2002″ (Public Law 107-243) - the senators were pushing to have a vote which would have repealed the Resolution, and therefore forced the withdrawal of troops.
I’d prefer to have lower taxes for the many, Tyson.
126 Indeed ’twas a truely magical place.
When Britain was truely great and the pound bought you so much abroad.
When however many times you wnet bust or lost your house you could pick yourself up and start again.
When the streets of Manchester and the City were safe from terrorists.
When Britain was truely for the British.
When the nation be it, on the streets of Brixton, Toxteth or Notting Hill, was at ease with itself.
When we made a profit from selling arms to Sadam’s Iraq.
23- snowflakes- your grasp of detail never cease to amaze- IMO the most formidable of the labour posters on the site
126. Ian, I’m amazed at the myths people are clinging to - eg that the economy is slowing, that we’re doing very badly relative to other countries and so on, which have no foundation in fact. I suppose it’s part of opposition, where you have to tell yourself these things just so you don’t lose the will to continue to fight. Were Labour like that during the 79-97 period? I suppose we were - let’s make sure we don’t get into opposition, or we’ll turn into similar sad creatures!
29- Sean- I well and truly fell for that one didn’t I !!!!
The difference is that from c.1980 to c.1993, the economic policies being put forward by Labour were mad.
128. OK. So if the Dems take control of Congress this Nov, and vote to withdraw, then Iraq is over. Which should have big implications fo