Will this help boost or impede Labour’s recovery?
October 7th, 2008Will ministers be thanked or get the blame?
Reproduced above are some of the front pages this morning - different papers all telling the same story. Could October 6th 2008 go down as reference point we will look back to in the years to come - or is there much worse on the way?
Who knows? We are in uncharted territory and for those who like forecasting elections and betting on political outcomes some of the certainties appear to be disappearing.
The conventional thinking is that in UK political terms the crisis helps Labour - though that is based on responses to non-voting questions in opinion polls not on how people they say they will vote. These can be totally different things and it is easy to confuse them.
This factor seems to have eluded some of our most distinguished political commentators - those who are better with words than they are with numbers.
But on the crisis generally how are different segments of the electorate going to react when they find their jobs threatened, their pension pots reduced, and their savings under threat? What happens when property becomes almost unsellable and negative equity becomes the norm?
How is another group for instance, those who rely on the interest from their savings, going to respond if rates are reduced in response to the crisis? There are huge numbers in this category yet you hardly ever hear politicians advocating their cause.
In the next day or so I hope to be publishing an analysis of recent polls which has some surprising conclusions.
Mike Smithson
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If Labour benefit from this then the Tory party should be ashamed of itself. Gordon Brown is personally responsible for a part of this problem (though not all by any means). DC said that he failed to mend the roof when the sun was shining. The reality is more brutal, he broke the roof, though we can’t blame him for the rain.
If he gains, then Labour’s spin machine is not dead
In the next day or so I hope to be publishing an analysis of recent polls which has some surprising conclusions.
A phrase last heard in a teaser for a poll in one of the papers (Indy IIRC) that proved to be utterly unsurprising
The current situation is both good and bad for Labour. Good in the sense that it will probably help their ratings in the short term (people like to stick with what they know, however bad, in a crisis). Bad in the sense that now is not the time to call an election (the electorate will think that Labour are being opportunistic and will vote accordingly) and by the time it is right to call an election the Labour “bounce” will be over.
You seem to have missed the main news of the day from the BBC, which is that MP George Howarth (who he?), one of Gordon Brown’s leading critics, has said his campaign for a change in Labour’s party leadership is over. Huge sigh of relief!
As far as the markets are concerned, the situation in the UK is far, far worse than in other developed countries. In the 11 years and five months of Brown’s stewardship of our economy, the FTSE has risen just THREE per cent, while inflation over the same period is more than FORTY per cent.
Yet in Germany, the DAX has risen 55.68% in the same period, so German investors and pension funds have enjoyed an increase eighteen and half times that of their British counterparts.
In France, the CAC has risen 39.8% - more than 13 times better than the UK.
In the United States, the DOW is up nearly 41% - again more than 13 times better than us.
If everyone in the world is suffering, hardship can be borne. Once our pensioners realise they are suffering worse than those in Europe and the States because our government has removed many hundreds of thousands of millions pounds from their pension funds, that would tend to impede rather than boost the socialist vote.
Whilst it is undoubtedly true that sub-questions in polls can be misleading, the economic competence question is arguably the litmus test for results. In a benign or positive market the political commentators mentioned by Mike may be wrong, but I think he is possibly wide of the mark here. There is a case to be made that the crisis will help Labour. Being in recession is not necessarily a vote loser, as the Conservatives showed during their reign. What matters is whether Labour can demonstrate 1) that this is a world-wide crisis and therefore not of their making and 2) that they are the most competent people to steer the ship through the storm. They have made a tangible effort on both of those, and their poll ratings will quite likely continue to improve.
1 Well said.
“he broke the roof, though we can’t blame him for the rain” We can, when he claimed to have broken the cycle of rain and shine!
4 Agree with you about pensions - a potent group the Tories need to connect with (and the one where they lag with worst) are the 45-55 group. They remember the hard times under the last Tory Govt., but haven’t perhaps focussed on the fact that they will have to stay many years longer in work and with a much poorer standard of living when they do retire due to the robbery of their pensions.
Labour might think they have weathered the storm. But they still have no argument with which to fight the next election. “Brown - five more years!” is still unthinkable to a vast majority of the voters. All that has happened is they have delayed their inevitable bloodbath until much nearer the election….
I thought Darling gave a Gordon Brown-like performance yesterday.He seemed in command of The Commons and his body language was good.All he was missing was a Tony Blair-like figure at his side.
GB looks worn out, even given that this is his finest hour since the summer of love 2007.He seems to be enclosed inside a bell jar and disassociated from anything going on around him that he cannot directly control.”I should be making this speech” he seemed to be thinking.
Enough of that !This is a political betting site and here is my latest.
To borrow a metaphor from the financial world,Labour are due a dead cat bounce.If it comes, it could have a devastating effect on the markets and when it comes could be the time to BUY the Tories.
In short I hold no long term hope for Labour but in the short term the upside of selling them or Buying the Tories seems limited.
5. “What matters is whether Labour can demonstrate 1) that this is a world-wide crisis and therefore not of their making and 2) that they are the most competent people to steer the ship through the storm. They have made a tangible effort on both of those, and their poll ratings will quite likely continue to improve”
Yeah right! When you return from your mission to Mars you might like to take rose tinted glasses off.
208 Flag Previous thread.
Palin; you need to ask?
1. Believes man walked with dinosaurs.
2. Could not name a newspaper that she read.
3. Is linked to a nuber of scandals in Alaska.
4. Cannot name a Supreme Court Ruling other than Roe v Wade.
5. Thought that Afghanistan was a neighbouring country.
6. Believes that American foreign policy is God’s plan.
The woman is an idiotic nobody and McCain thought she’d brighten up the ticket. She is now the most unpopular of the 4 candidates atop the tickets. McCain’s judgement is obviously poor.
If we put Brown’s name to any of the six above Palin positions most people would regard the man as even crazier than he obviuosly is.
Palin smells like rotten fish and an American public that has been smelling Bushboy for the last eight years know putrification when they come across it.
Answer enough?
4. It has to be said that in addition to capital gain from holding equities which is captured by the rise in FTSE a lot of the return comes from holding shares comes from dividends not measured in the indicies , UK companies traditionaly pay higher dividends than European companies.
10. I mean in no way to add to the defense of G Browns reputation as chancellor or PM . Crises requires leadership and Gordan Brown has lead us in to this crisis!
9-You like her then!!!I think your comments on Palin are the most vitriolic I have read on this site & in my humble opinion reflect more on you than your target.By the way has anyone noticed how BHO looks like the “devil” when he gets angry. Look at the eyes.
I don’t see how any one can trust any polling question that begins “putting party preferences to one side …”
It’s just so obviously a leading question.
9. Not sure about #2-6 but #1 is definitely not true. I think it was put on an Alaskan blog by a liberal blogger as a joke, he has since admitted this.
http://allnurses.com/forums/f313/sarah-palin-dinosaurs-man-existed-together-6000-years-ago-338511-2.html
“the man who started this ‘quote’ admitted he was just posting a tongue-in-cheek comment on his blog, but people would rather believe that the dumb dinosaur joke”
Still, guess the second part of the quote is more important.
IG currently predicting the FTSE to be +80 points today.
PHEW!!
Right wing politicos with a lot of crossover appeal to traditionally left of centre voters will always get the hardest time e.g Reagan, Thatch. Plus a bit extra if they’re female.
Not really being ready for prime time is irrelevant. She’d get it regardless.
15. Dead cat?
Furthermore you don’t even have to analyse the question to recognise that it’s not credible as a test of voting opinion. I know some people really don’t pay any attention to the world around them, but surely there can be very few people who wouldn’t put the economy as the number one issue at the moment? And yet we are expected to believe that when being interviewed by pollsters they make no connection, without prompting, between their number one issue and their party voting intention?
I like the myth being propogated that this opposition to Palin is all a product of “lefties”. You’ve got to have your head in the sand not to notice the large worry about her from the Right? American Conservatives have played the “anti-establishment” “man of the people” “knowledge, competence and experience isn’t everything” card for the last eight years, and it’s almost brought about the ruin of their party and their country. I think some might want a change.
17 Could be, but at least it makes a pleasant change! In all honesty, it’s probably just chasing after Wall Street’s late recovery. Currently, IG has the Dow up modestly today.
10 - Tim - that’s a fair point, but many small shareholders have, for years, elected to have their dividends paid in extra shares rather than in small amounts of cash.
For example, 212 HBoS shares held in October 2001 with dividends regularly reinvested are now “worth” 288 shares in HBoS (or, now, about 240 shares in Lloyds TSB.)
In 2001, of course, each share was worth about £7.50.
“Whilst it is undoubtedly true that sub-questions in polls can be misleading, the economic competence question is arguably the litmus test for results.”
The litmus test is the voting intention question. The Conservatives led Labour on economic competence in 1997, and John Howard led Kevin Rudd on that issue, and much good it did them.
‘Labour’s future depends on Scotland’s Mandelson’
by Robbie Dinwoodie, Chief Scottish Political Correspondent
He has been put into Dover House to arrest the Labour slide in Scotland. Glasgow East was an alarm call, he may be too late to save Glenrothes, and Motherwell and Wishaw has been finessed by a most peculiar exercise of prime ministerial patronage.
But Gordon Brown’s concern is shoring up Labour seats across the country at the next General Election, so who better to pick than a candidate who will be fighting for his own political survival in East Renfrewshire?
If Mr Murphy can pull off collectively across Scotland at the next election what he achieved and built on in his own constituency, then Labour will have some hope of avoiding a terrible drubbing.
Is saving Labour from that a realistic prospect? Let’s examine the likelihood…
Does he believe that council tax benefit should be retained by Westminster no matter the reform made in Edinburgh? That smacks of an argument that Scots can only reform council tax, a devolved issue, if the plan is approved by the Treasury. If I were Mr Murphy I would escape from that argument sharpish.
Indeed, there is a compelling argument for giving Mr Salmond his council tax benefit money precisely to allow the whole system to fail, so that if the scheme does fail no blame attaches to Westminster.
And on the referendum question, does he not recognise the Salmond claim that his referendum model was consciously modelled on that of Donald Dewar? A decision in principle, followed by practical detail? If that is a rigged referendum, say the Nationalists, so was the devolution poll.
http://www.theherald.co.uk/features/featuresopinon/display.var.2457955.0.Labours_future_depends_on_Scotlands_Mandelson.php
On this Council Tax Benefit issue I believe that Mr Dinwoodie is in agreement with our very own ChristinaD.
IG is showing a + rating because of talk of interest rate reductions.
19. I don’t think all the opposition to Palin is from lefties at all, just pointing out one particular and specific strand of it and why I think that strand illustrates a general pattern in current politics.
I also think the Republicans were ruined by dumb policies thought up by very clever and very knowledgeable people like Cheney. Bush was only ever the front man imo.
I would be amazed if the incumbant party were rewarded for economic failure - is McCain ahead in the polls because people want “experience”? Hell no. So why should the UK be any different?
Mike, I think you are spot-on with your analysis. As the crisis spreads from banking into other industries - inevitable now - Labour will be blamed. Cameron did a good job of getting the ‘you didn’t mend the roof when the sun shone’ message across BEFORE the crisis; I think it will stick.
I guess somebody should have a look at how the the polling figures changed around Black Wednesday, that would probably give us the best idea of the outcome. Taking a quick look at the UK Polling report archive 6 months before Black Wednesday the tories had been consistently in the lead. For the 6 months leading up to Black Wednesday the polls where pretty volatile and they had only ever been behind by a maximum of 6 points, they had actually been leading just the month before. Eyeballing the polls they seem to get steadily worse for afterwards.
Apply this situation to labour from their current starting point, then add Smithson’s Law, and things look pretty grim for the Labour Party. Personally I cannot see this being good for Labour in the medium term (that is up too the election). The formerly strong economy has always been their final fall-back position and Gordon Brown made sure he was as personally associated with the economy as he was able.
I guess somebody should have a look at how the the polling figures changed around Black Wednesday, that would probably give us the best idea of the outcome. Taking a quick look at the UK Polling report archive 6 months before Black Wednesday the tories had been consistently in the lead. For the 6 months leading up to Black Wednesday the polls where pretty volatile and they had only ever been behind by a maximum of 6 points, they had actually been leading just the month before. Eyeballing the polls they seem to get steadily worse for afterwards.
Apply this situation to labour from their current starting point, then add Smithson’s Law, and things look pretty grim for the Labour Party. Personally I cannot see this being good for Labour in the medium term (that is up too the election). The formerly strong economy has always been their final fall-back position and Gordon Brown made sure he was as personally associated with the economy as he was able.
This from a US analyst’s subscriber note on Sunday last:
“I’ve noticed a few queries as to my opinion of whether financial stocks will get better or if the worst is behind us. I actually thought I made my viewpoint clear. Obviously not, so let me be a bit more blunt. Things are going to get very ugly, starting this week - and from there it will get even uglier - and after that the bad part will start.”
Says it all really. Chances of anything that could be described as an improvement from where we are right now, before the election are close to zero - and ‘a whole lot worse’ around say 100%
30 Thanks for that cheerful note on this wet, windy and generally miserable Tuesday morning.
“In the next day or so I hope to be publishing an analysis of recent polls which has some surprising conclusions.”
Mike, before the conference season started you kept telling us to wait until at least late October, or preferably early November, until drawing any conclusions whatsoever from voting intention polls. Why are you breaking your own rule? Is it now possible to draw “surprising conclusions” from polls taken around conference time?
I wonder if Cameron will use one of the million “No more boom and bust” quotes at PMQs.
Can’t say if the polls will be like Black Wednesday, but surely the situation is different? We’ve not got a single, enormous, one-off event, but continuing serious strife.
The government endlessly saying “We’ll do whatever it takes” is meaningless. I think that, as well as worrying business, the public won’t be thrilled to hear a vacuous phrase like that repeated over and over.
30. As good as that, eh?
My general feeling of worry over the stock market is tempered only by remembering that I liquidated all my equities when I had a cashflow crisis a year or so ago.
I suspect that Cameron will try and play the statesman at PMQ. This would be a mistake from his point of view. People want the Governmant to do something to sort the crisis out. Vince Cable suggested a reduction in interest rates (one commentator suggested that 300 basis points reduction were required) -Darling, in an empty statement (why did he bother) was happy to leave it all to the Bank of England, who can only do things once a month (luckily this Thursday) - can you hang on until Thursday everyone.
31, Makes you think of a warm winter holiday don’t it. I’ll have to book something as its miserable out there and months of poor weather and poor economic news are just too much to bear without a break.
From Simon Hoggart in the Guardian ( http://tinyurl.com/3ffo5r )
“The most startling remark came from the Rev Ian Paisley.
The ancient turtle raised himself on his flippers and boomed as if from a cavern at the bottom of the sea.
“I trust the whole nation will turn in repentance and cry to God for an intervention so that calamity will not come on our children and on the b*abes in their cots,” he said.
Never know. It might just work.”
I prefer counting magpies!
Wonderful the above post was rejected until I altered the word B—abes!
‘I’ve abolished boom and bust’. Anybody who repeatedly says that and now tries to claim for himself as the man with ‘relevant experience and understanding’ has a tough sell on his hands.
GB will be given some sympathy, just as the heavy smoker has considerable sympathy while in the death throes of lung camcer.
But any other PM, even Balls or Harriet, let alone DC, would have a much broader and deeper fund of goodwill on which to draw, than will ever be available to GB.
O/T
In the Mail this morning, Quentin Letts, with uncharactaristic modesty, continues with his list of those who have dragged Britain down but omits to mention…..Quentin Letts.
In the same paper we are told that the official pastor to the square mile (previously known as the golden mile) has chosen to use the week of stock market collapse (or was it the appointment of Peter Mandelson?) to rant against sodomy - with only the mildest ticking off from his bishop.
Coukld this be a new policy for Sarah Palin to fend off the collapse in the McCain campaign? We hockey moms could keep our savings and so can Joe Six Pack if the wrath of the Lord in matters financial is concentrated on those who do not obey His laws?
39 - He did claim credit for global growth, it does seem to be a cheek to say “not me guv” when there is a downturn
Despite what the government has done, (or hasn’t) there is a deep distrust of the city and the bankers, that runs through the nation’s DNA.
Can there have been a more sickening occasion than last night? When representatives of the biggest three banks in the UK, went to the treasury and shook the begging bowl.
We are a long way from, ‘Governments can’t fix the problem, ‘cos governments are the problem’ a mantra much beloved of the, ‘free market right’
Oh! sorry of course, its, ‘We believe in a free market, but not a free for all’ Ah! well thats all right then.
25. “I also think the Republicans were ruined by dumb policies thought up by very clever and very knowledgeable people like Cheney. Bush was only ever the front man imo”. Very clever and knowledgeable people do of course think up dumb policies from time to time (see current financial crisis), but more often they’re thought up by the less clever and knowledgeable (though I think you’re overrating Cheney anyway).
The theme of ‘the power behind the throne’ is a potent one through the ages, and is one that was frequently true when the nominal leader not only had to rely on experts to develop and deliver policy but could also devolve the whole lot if they so desired. That’s no longer the case. Cheney is a very loyal deputy and no doubt an influential advisor but as we saw after the 2006 elections, Bush will act against him and his policy-framework when it suits. Bush is in charge and always has been, probably in much the same way that Reagan was - he sets the broad strategy and objectives and lets others get on with the detail. Unlike Reagan, some of Bush’s broad strategy decisions were based on faulty assumptions.
And that’s something which can also be levelled at Labour. ‘An end to boom and bust’ is now seen for the hubristic nonsense it always was. The problem is that Brown seemed to believe it (it’s the only way he could square his public borrowing with the rules he’d set). For that failure to have political effects, the Conservatives need to get the message across to the country. The points Scampi makes at [8] are roughly right (I think it’s actually about persuading the public rather than demonstrating, but near enough) - they could yet be re-elected if they can pull off the trick of getting the public to believe they could handle things better.
That is something no competent opposition should allow - and Cameron has already laid out much of the argument against Labour, as mentioned by Serf in the very first post. Even so, I expect a small shift to Labour in the next few polls as the decision to co-operate behind closed doors is limiting the scope for attacks at the moment and is unlikely to produce any policy benefit (Labour seems more inclined to pinch Tory policies once they’ve been publicly announced). It may, however, be a useful shot to store in the locker for later, to argue that Osborne tried to help but were ignored (which he and Cable almost certainly will be). The public likes co-operation and dislikes party point-scoring in a crisis.
On a general point, I’ve said before and expect to say again that too much is made of one-day (or less) shifts in the stock market. Of far more relevance are both longer-term movements (which are of much greater scale, though less dramatic), and developments in the real economy as felt by voters.
33 MD - “We’ll do whatever it takes” - I take that as code to mean that the Gov’t will not allow any [major] bank to fail, up to and including nationalisation - no more, no less.
30 Bringing back Peter Mandelson has been widely described by journalists as ‘Brown’s biggest gamble’. But surely presenting himself as ‘the saviour of the Nation’ in this economic crisis is a far larger risk, given all the turbulence still to be realised.
45, the thing is, even if they manage (by luck or judgement, neither of which is likely to occur) to get the financial crisis under control, we’re still having a recession.
Oh joy. Just been on the phone to my best friend - her mum’s been made redundant as her company’s gone into liquidation. Owed wages too.
It hurts most when it gets personal. I’m in a reasonably safe job so I’ll see what I can do for them.
Also, amusingly, top political story on the BBC is an ‘end to hostilities’ within Labour. The last story listed on the right under Other Top Stories is about 42 days. Good work, Pravda.
Anybody else used the Recession Blocker? Have a look at the censored BBC business page:
http://recessionblocker.com/results.php?uri=http://news.bbc.co.uk/1/hi/business/default.stm
Every blacked out word or phrase refers to present financial difficulties.
44
We’re all socialists now!
As a financial crisis expert, I find the lack of government action incredibly bad. The idiot economic commentators who keep going on about Ireland’s “beggar thy neighbours” deposit guarantee irritate me immensely - we are in a period where everyone is going to have to do this - the government is going to have to put in a whole load of capital, no matter what - the slippery slope argument is irrelevant. This morning the idiot Peston seemed surprised that the big high street banks were pleading for action last night. Darling’s statement was incompetent twaddle - politicians dont seem to understand that
1) No one actually trusts a politician
2) 98% of accounts is not where the problem is
3) We are past the point of talking people round
Now, how this plays with the wider public is open to debate. the vast majority of the people are part of the 98% of account holders covered by the 50K guarantee. Banks wont be allowed to fail and all deposits will be safe, but the statements made so far dont actually make this a certainty.
As long as nothing blows up (and we should, no matter what one thinks of Darling/Brown, pray nothing does), I guess that Labour get their bounce. I do think that the economy is seriously damaged and Labour will reap that whirlwind. But, if Darling drops the ball - for example by not guaranteeing losses above 50K on an Icelandic bank failure, Labour will find their reputation suffering.
The key will be whether a single issue crystalises criticism of government competence. This is the point about the ERM.
33. I noticed that yesterday Darling slipped and said “whatever we can” at one point. I’ve had the distinct impression that “whatever it takes” was being used in place of that phrase lest we believe that the government can’t actually do much.
Anyway its all Dave’s fault.
There was anger in the Treasury on Monday that David Cameron, the Conservative leader, had fuelled market uncertainty by speculating on the desirability of a scheme to recapitalise banks.
On a day of tumbling bank shares, Mr Darling said it was “irresponsible” to speculate on what action the government might take to alleviate the financial turmoil.
Downing Street and Treasury insiders noted Mr Cameron’s enthusiasm for the part-nationalisation of banks emerged only after he had met Mr King last Friday. The Bank governor has long argued that Britain’s banks are undercapitalised.
The Conservatives rejected as “complete rubbish” suggestions they had played any role in the market turmoil on Monday, but they have developed a habit of calling on the government to take action that is already in the pipeline. George Osborne, the shadow chancellor, said: “Would it not be irresponsible to not even at least consider more dramatic measures to help our banks, including support from creditors and government injection of capital?”
Hmmm part-nationalisation,( I wonder when Dave will call for the whole-hog)good to see you Tories are proving to be even better socialists than Brown and Darling: but that’s not difficult.
p.s.
I wonder where Dave got his plan from, was it the Socialist Workers Party?
43. Well I think the “American Century” crew of Cheney, Perle, Wolfowitz, Rumsfeld etc were the brains (but no wisdom) behind the last eight years in the US. I think they went looking for a folksy front man to appeal to the Reagan democrats and picked Bush (bad choice obviously). But I’m no expert so maybe I’m wrong.
I agree with the other points.
43. I did enjoy the programme about Republican spinner Attwater yesterday evening, especially the interview clips with the hapless Dukakis.
33 Why do journos take these soppy phrases at face value? Can’t any of them ask “What will it take?”
Worth reposting this commentary from Dublin Watcher last night.
“A couple of quick Dublin observations.
1. I heard a good deal of authentic anger today about Angela Merkel’s impersonation of Janus over the weekend. The chances of a “yes” vote in Lisbon II is close to nil. If the European Commission press the issue on the Irish bank guarantee, the government may.
2. Irish banks were caned today. Unless there is a move to recapitlise this week (unlikely as the Budget here was brought forward to next week a few weeks back), or there is FOMC or BoE
relief in the next couple of days, I think the minister will be using his new powers under the act within two weeks to nationalise
3. I am loathe to criticise a politican in another jurisdiction, but Alastair Darling’s statement today failed on every conceivable level. It indicated he does not understand the gravity of the crisis; the timescale on which action is required (days according to Anatole Kaletsky in the Times); the order in which action should be taken (100% guarantees within days, this trading week in conjunction with BoE activism, bank re-cap with government taking preference shares announced by opening of markets next week); and the impact of his statement on deposit holders, the credit markets, and international investors. One event tonight makes me wish to reconsider what I say, namely the real Cobra tonight (it may be that something big is in the offing, in which case I am prepared to give the Chancellor plenty of credit and to gladly eat my words). However, the thinness of the statement in the House today, in conjunction with what we have heard from the PLP meeting today suggest to me that Labour no longer have the energy or grip to run the country, and that if things go badly wrong this week, this will be unspinable. The UK does not need to wait for EU permission to do anything, and has nothing to fear; the advantage of having control over your own currency and interest rates and being too big to push around (unless you choose to be) is that you can shift market sentiment.
4. Minimum action from BoE this week: 50 point cut in the base rate, but in the absence in action from Darling on the guarantee, the markets would not quail at 0.75 or even a 1 percent cut.
5. The real economic Cobra was held this evening with the PM, Darling, the bank CEOs and King. If this is the UK analogue of last Monday evening in Government Buildings in Dublin and there is a big package of measures waiting to be revealed along the lines of 2: great. And might it be that GB is waiting to make such an announcement in the commons himself, as First Lord of the Treasury. If today’s statement was simply a warm-up act for the PM to act as Hotspur later in the week - hurrah! But I haven’t seen much to date to make me think that he will.
by DublinWatcher October 7th, 2008 at 12:45 am”
Icarus mentioned Thursday’s decision on interest rates, will Gordon Brown try and pull a rabbit out of the hat just before PMQ’s today(he has form for this trick), or will he carry on waiting to see if the decision on Thursday has any effect?
It would IMHO be a further emasculation of Darling if he does this, and it would also indicate yet again that he is not above using this crisis for his own political ends rather than timing it to coincide with the need for stability in the markets.
Anyone know what happened to Populus?
“As so often when disaster strikes, this government leaps into action and begins an energetic programme of dithering.”
Simon Hoggart
The BBC disinterred Norman Lamont last night to comment on another Black Monday. They failed to ask him if Black Mondays are the curse of Loreto or whether he was a major contributor to the credit card bubble.
“They call it stormy Monday….but Tuesday’s just as bad…”
RBS shares look to be down about 20% again.
58.
“an energetic programme of dithering.”
Simon Hoggart”
sounds like a good description for his activities with Blunkett’s ex?
57.Melt Down Monday knocked it off the front page, so they have held it over?
Good Morrow Ye Olde PBers …. Are we back to barter yet ??
Meanwhile ….
“Politico” looks at McCain playing defence in North Carolina :
http://www.politico.com/news/stories/1008/14304_Page2.html
Labour may get a bounce but when the hoo-haa regarding the markets and banks settles down they will get it in the neck for the recession.
Labour will poll higher in November than February I’d bet.
ConHome are asking “Is it time for the Conservatives to propose radical action to avoid a serious recession?”
This is a poor time to be talking about hair plugs for Chamereon. Just ring Joe Biden!
New SUSA poll for California :
McCain 39% .. Obama 55%
http://www.surveyusa.com/client/PollReport.aspx?g=2f384669-1c1c-4781-a883-0833f1b6577e
Sky reporting that all major banks now talking to the government, they have this as breaking news. They should have been reading PB.com last night, Dublin Watcher mentioned it!
Anyway, its now obviously being briefed as more action on the part of the government. Hope that they are now going to produce a constructive action plan, rather than more dithering while attempting to look like they are doing something.
Brown’s short-termism, profligacy, and overall recklessness during his last seven years as chancellor has put the UK more at the mercy of coming events than almost all other industrialised nations. Our massive debt burden will see to that.
Despite this; with the help of stooges in the media, he has had some success, so far, in spinning in that he is the man to get us through this mess. A ludicrous claim, obviously, though never underestimate the gullibility of some sections of the British electorate.
Sadly for Brown (and the rest of us!) however, is that this banking/financial crisis has only really just started to impact on the wider economy. The UKs leading insolvency firm has identified 323 British companies at 70% or higher risk of going bust in the near term. When the crisis really starts to hit the ‘real economy’ and jobs are being shed in the hundreds of thousands, shops close all over the place, repos accelerate, house prices really start crashing, etc etc then Brown will find it impossible to avoid his (large) share of the blame. His name will be mud.
50 Ken, what % of all deposits does the 2% of accounts above £50k actually represent? Nick P said 40%+. If it is that high then we have the most volatile and easily moved half of all deposits being unprotected which increases the risks of a rush on the bank. We just would not notice the rush as it would involve a few thousand depositors and not a few million.
It is of course weak reporting by the media (and I include Peston) to talk about 2% of accounts as if that was 2% of deposits.
RBS down 23% today - at 113p
Big big trouble coming.
FTSE looking like falling back rapidly towards yesterday’s close after being 130 points up soon after opening…
Enough doom and gloom for me, I think. My bed calls!
67. The Times suggests up to £50bn of preference shares may be injected into major banks. That doesn’t sound like enough, though.
69. The media, having been genuinely investigative in the early stages of this crisis, has more recently turned into a compliant mouthpiece for the government, I’m afraid. There’s little to be learned from following the BBC or other standard news outlets now.
When the really bad bit starts, whoever is the most unpopular will get the blame. The Tories should stay calm and not do anything rash.
The point about interest rates is a good one - when we already have inflation higher than the government’s target (and most people believe the day-to-day inflation rate they’re experiencing - on food, petrol etc. - is higher than the CPI) then a cut in rates will only exacerbate the situation. It will erode savings (bringing us into a situation where the rate is similar to, or possibly lower than, the rate of inflation - be it CPI, RPIX or whatever), reduce the value of sterling - making imports (and oil) more expensive, causing further inflationary pressures and we’ve seen the banks reluctant to pass anything like the full cut on to mortgage holders
There’s also the question of how much a rate cut would benefit the consumer market anyway these days, given the boom in fixed rate deals in recent times, people are not affected by immediate base rate changes to the extent they were 15 years ago
72
How much more taxpayers money do you think they need runnynose?
New West Chester Uni/NPR poll for Pennsylvania :
McCain 42% .. Obama 52%
http://politicalwire.com/archives/2008/10/06/wcunpr_poll_obama_ahead_by_ten_in_pennsylvania.html
Con home has 10 policies to fight the recession
http://conservativehome.blogs.com/centreright/2008/10/what-is-to-be-d.html
We have laid in an emergency stock of porridge oats and tinned haggis, enough to last several months.
I see RBOS is down 30%. Robert Peston, who actually should know better than to fan the flames, is the reason again. I think a gagging order should be placed on him. His understanding of FSA regulations is questionable.
If there’s a war cabinet on the economy, there should also be wartime controls on his type of smutty journalism.
FTSE down 60 points (when I started to type was only 30 points down!)
Why does the BBC continue to give the index with a lag of a quarter of an hour? Last news said up 80 points when it was (at the time) down 11.
Similarly the BBC reports that BhS “profits were down 40% to £30m. In fact these were operating profit before interest and probably a few other odds and ends. bhs probably made a loss - indeed I am quite well off before interest charges!!!
BBC journalism very sloppy - just repeating what ever the press release says.
The Telegraph says Darling should be pro-active and not just making promises to mop up any mess.
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/10/07/dl0701.xml
It’s sensible to separate here what we personally think about causes and solutions for the crisis (on which we will probably disagree) from the wider impact.
I expect to see Government moves in the coming days that will be seen as having a helpful impact on the British part of the problem. However, how the world crisis will unfold remains completely unclear, and so therefore is the likely medium-term economic outlook.
At present, I think the electorate are not greatly changing their voting intentions (I’m expecting the Tory poll lead to remain much the same for the moment) but they’re following politics much more attentively than usual. The position is not, as Mike’s article perhaps implies, that people have decided on a firm position: “We give the Government some credit for their current policies but we still want to vote them out.” I think it’s rather: “We give the Government some credit for their current policies but we’ll wait to see how things work out before deciding if it affects our voting intentions.”
That’s unusual, because normally attitudes to policy are a trailing indicator, driven by party preference. If a party is ahead in the polls, people think better of their policies on everything from health to devolution to fried fish. But the economy is such a crucial issue that I think attitudes on this change *first* and voting intentions follow later when people see how the policies work out. People are expecting problems (e.g. we’ll all be amazed if the Pre-Budget Report is anything other than grim): the question is whether they’ll be less bad or worse than expected.
Labour’s best shot is if the electorate accepts that (a) there is a world crisis largely caused by factors outside our control (probably) (b) we have responded sensibly to it (people haven’t decided yet though they’re inclined to think we’ve made a fair start) (c) the Opposition had no better ideas or behaved irresponsibly (we’ll see) and (d) the impact has proved not as awful as many people currently expect (?). The Tories’ best shot is if the electorate decides that the crisis is largely British-made, or that there was a British solution that we’ve overlooked, or simply that there is a worldwide economic avalanche and the Government gets the blame regardless. Alternatively, and I think this is their current strategy, they can try to stay close to the Government on damage limitation to try to depoliticise the issue, and hope to return to other reasons to vote us out later on.
74 - The fact that we are heading for a recession and the worst of the recent commodity spike appears to be over means that the rate of inflation will begin to trend down naturally as demand evaporates from the economy. An interest rate cut now is about avoiding greater than necessary pain. The capital flows are out of sterling in many respects even though we have higher interest rates than the eurozone and the US.
my emergency food and cash ration is also complete now so i can relax slightly….
after watching the mostly Labour politicians argue and point score these last few days i have absoltuely no faith that this is going to be sorted out before many people have lost a lot more than they have now.
the smug smiling of Gordon Brown yesterday said it all.
Icesave have suspended withdrawals - http://www.icesave.co.uk/
79. Pressure being put on RBS by Brown to sell out to the govt? Peston is a “useful idiot” in Brown’s eyes (again).
29. Re comparison with so called Black Wednesday. In some ways the comparison is appropriate. However, key question how will this play out in the real world.
Black Wednesday was essentially a collapse of a political position. It was nevertheless the start of an economic recovery which lasted many years indeed until just recently. We were told beforehand and at the time that a failure to hold our position in the ERM would lead to accelerating inflation, reduced growth and a loss of influence. None of which occured.
Today we are actually facing the worst downturn since the second world war, with bankruptcies, rising unemployment and all that goes with it. The first charge the government has to face will be that it did insufficient to prepare for this event. It is 14 months since the credit crunch started and yet until recently the government as a whole did not seem notice. This delay will cost the country dear in the months and years to come.
shares in RBS suspended
r 85. Icesave, of course, has been the best buy for savers on the UK market for a very long time.
When I took early retirement I was very tempted to put my pension lump sum with them at just on 7%. Thankfully I kept it with HSBC at 4.75%.
80 - I’m surprised there hasn’t been a ‘gangland’ style hit on Peston. His firestarting brand of reporting, must have helped in the loss of quite a substantial sum of money by many investors. He’s not that great on economics either, more sensationalist tabloid than learned journal.
peston was talking about the courageousness of Alastair Darling on the radio this morning. what a plum.
85 & 88 - Oh sh1t!!!
74 True if you believe that inflation is not already on a downward path - best forecasts are that recession is already driving down oil and commodity prices so input inflation will reverse into deflation. Interest rates take time to work through system, particularly with tightened credit markets, and lessons from past depressions and deep recessions are that there needs to be an early easing to escape the worst.
The Major government because of the ERM and need to support the value of sterling kept interest rates high far longer than they should - benefit of Black Wednesday was that it enabled Chancellor to reduce interest rates as he was then able to concentrate on economic activity rather than the artificial value of sterling.
48
If you regularly look at the BBC website, along with the recession blocker, you need another one deleting the words climate change and global warming.
I guess we are about to find out if “whatever it takes” includes nationalising RBS.
Darling on the phone to the BoE “PRINT MORE MONEY !”
Zimbo here we come..
interest rate reductions will do little to nothing now.
78.”We have laid in an emergency stock of porridge oats and tinned haggis, enough to last several months.”
Fergusmac, don’t forget that the tattie holidays are almost upon us, stovies and oatcakes beckon as well.
89
If it looks to good to be true, it’s ‘cos it is!
95
Fully supported by ‘Red Dave’ I should think!
95.
It would cause acute embarrassment were RBS to be nationalised.
The private banking arm of RBS is Coutts and I understand they are bankers to Her Majesty the Queen,amongst others.
Icesave is still top of the interest rate table this morning -
http://www.moneyfacts.co.uk/savings/bestbuys/long-term-fixed-rate-bonds.aspx
BBC reporting Barclays one of three banks seeking funding
100. I bet the Inland Revenue would like to audit their books. In fact they could take the tax straight out of your account.
RBS suspended at 100p ?
Coutts just turned me down for a job so RBS can’t say karma isn’t coming back to bite them.
Plus it’s raining
coldstone you typify the Labour ranks. focusing on pointless comments. your lot’s lack of regulation along with Blair’s favourite, Bush, have overseen this catastrphe. sniping at the Tory party that hasnt won an election for 16 years strikes me as rather pointless and shows your lack of ideas. god help you.
95
Oh! and there’s this from the FT.
Banks should be forced to curb pay and bonuses as a quid pro quo for any taxpayer-funded recapitalisation, George Osborne, the shadow chancellor, told MPs on Monday.
The Tories’ support for an effective part-nationalisation of the banking sector, and the “anti-greed” caveats they want to see imposed, show how far the opposition party has moved in less than a month. From initially opposing a ban on short selling, Mr Osborne has now embraced much greater state intervention in banks
Wow! They’ll be singing the, ‘Red Flag’ next.
Left, left, left Cameron’s army marches on.
103 - Whatever Brown/Darling do now decides the fate of the Government (and the rest of us). If they dither and bottle, that’s it.
100 no embarrassment anymore. political class are shame-exempt.
I have an overdraft with RBS - Darling is welcome to it
Where’s gabble?
RBS is back trading at about 105, -30%.
1. Believes man walked with dinosaurs.
No, she doesn’t.
2. Could not name a newspaper that she read.
Refused to name one.
3. Is linked to a nuber of scandals in Alaska.
None of which have (a)stuck to her; (b) are even remotely serious (all those Obama campaign workers - sorry journalists - who flew up to Alaska had to justify their expenses somehow); or (c) are in anything like the same league as the scandals that surround Obama and which I imagine you’re perfectly cool with (she did not need a felon’s help to buy a house, and has yet to accept campaign donations from terrorists.)
4. Cannot name a Supreme Court Ruling other than Roe v Wade.
She didn’t name one *she disagreed with*.
5. Thought that Afghanistan was a neighbouring country.
Big deal. Obama thinks that Arkansas is a neighbour of Indiana - the differenc eis that Palin isn’t running for VP of Afghanistan.
6. Believes that American foreign policy is God’s plan.
No, she doesn’t. This is an exact inversion of what she said, and has been known as am is quote for weeks now. The fact that it’s still being peddled is distasteful to say the least.
A part from that, good post.
100 Are you sure about RBS. BBC just saying shares are down
108. Cameron’s strategy of positioning the Tories just to the left of estimated public opinion has paid off so far.
RBS must be thanking their lucky stars that short selling has been banned!
117. I’m sure the government has a few more breathtakingly clever moves like that one up its sleeve.
I am not sure the party polical position is really THE key issue at the moment. But if you must. If the govt are seen to be impotent and lose their dignity like the Tories in 1992 then it really is curtains. If they manage to control expectations and are seen to help then they’ll have a good story to tell come election day. Relative to other world leaders confidence in Brown is quite high. Esp after the Merkel implosion.
But like I say, it really isn’t a good day to talk about party politics. It feels like relatives fighting over who gets the family silver when granny is in intensive care.
107
Sixteen years has it been that long, doesn’t time fly.
I do not let the government off its share of the responsibility for what is happening. The government will be forever damned for not reversing the, ‘eighties culture’ which is responsible for the mess we are in.
I for one can’t wait for the, arrival of the Cameron government, it can’t come to soon for me. I’ve just gotta see the likes of, ‘John Redwood’ swallowing all this leftie stuff from Cameron and Osborne.
Oh! I shall have great fun, bring it on!
RBS not suspended, just in freefall.
O/T - Shadsy has cut Obama’s odds to five to one on.
Fat Lady not singing yet, but vigorously practicing her scales.
Something special needed from McCain at tonite’s debate.
116
How far to the left does he need to go?
120. Meanwhile the rest of the Uk will be much more concerned about their jobs, their savings, their pensions and the cost of essentials while you gloat over whether Redwood is peeved.
You are in a small minority amigo.
Bank of Japan tell rest of world to get stuffed. No co-ordinated action. Meanwhile Russia lends Iceland 4 billion euros. Strange times !
The public don’t blame Gordon Brown for the entire crisis, but he and Darling must still convince the public that they are putting measures in place to help soften the blow and steer the UK out of the problems. Yesterday Darling did the complete opposite of this and the voters will soon lose patience.
http://lettersfromatory.wordpress.com
126
They wont be too chuffed when they get made redundant and their houses repossessed. This is going to get very ugly whatever the Govt do.
Labour will probably nationalise the banks. Be responsible for the allocation of capital. Mortgages available only to Labour Party members?
123. Depends on the issue. On this bank crisis stuff at the moment I’d say it could be very far left potentially (and temporarily). On crime in 2-3 years time just to the left of estimated public opinion might be Genghis Khan stylee. All depends.
82 NickP.You never add to your analyses -”A realisation by the electorate that, in 10 years of prosperity, prudence was never considered as important, leading to our current inability to weather the storm”.Taxation, unnecessary borrowing, over-spending, encouragement of excessive debt by the most vulnerable. Do you really think nobody noticed?
Gordy is clearly knocking some heads together in Europe. According to Pestom all EU leaders have signed up to the following statement…
“All the leaders of the European Union make clear that each of them will take whatever measures are necessary to maintain the stability of the financial system - whether through liquidity support through central banks, action to deal with individual banks or enhanced depositor protection schemes.”
Now I wonder where that came from.
Barratt down 26% Once again I am ruined.
I refer to my post last niught when I said that the Govt had no idea what to do.
http://www.spectator.co.uk/coffeehouse/2202386/dithering-nah-couldnt-be.thtml
131. Fills you with confidence, vacuous cr*p like that, doesn’t it?
120 - Coldstone, we have shared interests - I’m looking forward to the departure of Browns’ government as well but for different reasons.
I’m sorry to say this, but I hope you REALLY suffer during the financial maelstrom in which we find now ourselves, thanks to your beloved Labour.
131. Word are all he has - no action.
124
I’m in a minority of one, I hope.
On this site, which has been taken over by the sort of people whose beliefs have made the present situation a certainty, I’m proud to be in a minority of one.
131 Gordon let it be known to the BBC that he was the instigator of the joint statement - would never have guessed otherwise would we?
Good morning guys. Another day of meltdown or partial recovery? We shall see.
Meantime Michael White from the Guardian - Who I rarely agree with - writes some thoughts I can live with:
http://www.guardian.co.uk/politics/blog/2008/oct/07/creditcrunch.marketturmoil
getting on with the job of doing whatever is necessary?
one man’s (Peston’s) holding pattern…. is another man’s (Gordon’s) dithering…
According to Reuters Landsbanki (Icesave) is bust - http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSSAT00564820081007
Russia lends Iceland EUR 4 billion
135
I refer you to 120
As for suffering, I’m a stoical person, I’ve been here before.
My own life was disrupted during the last recession, when interest rates were 15%, I recovered. I’m in a pretty reasonable position now, I’m sure I’ll survive.
Our great Leader stated this morning that Markets nee morals.
This from the most immoral, lying, back stabbing, PM in a century.
137. Belief in borrowing too much ? Belief in creating a boom built on spraying taxpayers money about ? Belief in the state knows best ? Belief in allowing 125% mortgages ?
Not many share that on here - I miss your point I think.
143 - You should know better then, if you&#