Amid the turmoil, Canada heads for another hung Parliament
October 12th, 2008
Jack Peterson looks at the world’s ninth-largest economy ahead of Tuesday’s election
On Monday September 29, as the campaign reached its halfway point, Conservative PM Stephen Harper had reason to be satisfied with his party’s progress towards a majority government. A slew of negative advertisements had succeeded in portraying Liberal leader Stéphane Dion as a weak and indecisive figure, whose flagship Green Shift tax plan posed a threat to economic growth and national unity. As Conservative poll numbers approached the 40% mark, the Liberals were shedding voters to the left-wing NDP and Green Party, whilst the weakness of the separatist Bloc Québécois suggested that the Conservatives might gain up to 20 seats in Quebec.
Since the end of September, the campaign has been turned on its head by a series of Conservative misjudgments and by Dion’s use of the economic turmoil to revive his flagging party. Conservative proposals to cut funding for the arts and to introduce adult sentences for teenage offenders proved wildly unpopular in Quebec, destroying Harper’s hopes of making large gains there and reviving the Bloc’s fortunes. Liberal foreign affairs spokesman Bob Rae produced evidence that Harper had plagiarised John Howard in a 2003 speech supporting the Iraq invasion; and Dion followed this up by unveiling a five-point plan to deal with the economic crisis.
When Harper suggested that record falls on the Toronto stock exchange offered voters a good chance to pick up some bargain shares, Liberals gleefully seized on his comments as further evidence that the Prime Minister was out of touch with the economic realities of ordinary Canadians. However, the embarrassing Dion interview has stopped the Liberals’ momentum in English Canada, with one or two polls now showing the Conservative lead in double digits. Another Harper minority is now extremely likely, with an outside chance of a majority if the Liberal vote (notably in Ontario) evaporates on the day.
Going into the last two days, the Conservatives thus have an average 7-8 point national poll lead over the Liberals, but the two parties are closer in the seat-rich battleground of Ontario, and the Liberals are now the main challengers to the Bloc in Quebec. Seat-by-seat analyses by the non-partisan Election Prediction Project and Democratic Space suggest that relatively few Conservative-held seats are vulnerable to Liberal challenges, but Canada’s multi-party system makes constituency results unusually volatile, and national-level projection tools such as the Hill and Knowlton Election Predictor suggested that the Liberals could have ended up just a few seats behind the Conservatives if pre-interview trends continued. The NDP seems likely to make a clutch of gains in northern Ontario, but only the party’s most optimistic supporters retain hopes of breaking the 40-seat barrier this time around.
What, then, are the post-election scenarios? A Conservative minority is the best bet, not only because the government has a comfortable poll lead but also because Dion’s efforts to demonstrate his orthodox economic credentials have reduced his room for manoeuvre: the Liberal leader has promised that no government led by him will allow the federal budget to fall into deficit, and has declared that the NDP’s flagship proposal to increase corporate taxes constitutes a deal-breaker in any coalition arrangement. Even so, Bloc leader Gilles Duceppe has hinted that his party might support a Liberal government on an issue-by-issue basis, whilst Dion might decide that concessions to the NDP are preferable to his own political mortality.
Jack Peterson is a regular poster and has been following Canada for PB
- International round-up
Austria - Jörg Haider was travelling at twice the speed limit
Canada (14 Oct) background, polls, betting market
New Zealand (8 Nov) background, polls, betting market
UK - the bank rescue plan may commence tomorrow morning
Zimbabwe - Tsvangirai has threatened to pull out of the power-sharing deal
PB will be covering the election results from Canada early Wednesday morning
Double Carpet
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Having just spent several days in Ontario for during the last 2 weeks I’d concur that it’s likely to be another hung parliament as the Tories seem gaffe prone and the others did better in the debates.
Interestingly my first time using by new biometric passport at Manchester showed that the technology failed completely and they send be back the usual way.
Ave It International thinks it will be a hung parliament in Canada….
Thanks to Peter on previous thread for pointing out that Coral have a Glenrothes market (missing from Mike’s Best Betting section).
Therefore:
Glenrothes by-election - best prices:
SNP 2/5 (Sporting Bet)
Lab 10/3 (Coral)
Con 100/1 (Coral, Ladbrokes and Sporting Bet)
LD 100/1 (Coral and Ladbrokes)
Still no Betfair market on Glenrothes.
SNP are beginning to look good value at that price.
From previous thread:
good point, however Kubica has a chance only if both Massa AND Hamilton are unlucky or make large mistakes. His car is not up to the standard of Ferrari or McLaren and he’s likely to have Raikonnen ahead of him as well.
For those wondering, I’ve not put a bet on them, mostly because (Strictly aside) I don’t want my money tied up for 3 weeks for such a small margin.
Sorry to go a bit off topic so soon, but what “no-brainer” really means is that “I think XXX - whatever it may be” and if you dare to question it, you are incredibly stupid and do not even have a brain.
Got it! It is discussion at the level of the Blue Harpies and other Chavs and Americans.
Many thanks, LS and Nick Palmer. Sorted.
Morris Dancer I have information that Ron Dennis will secure the title for Hamilton by changing the team livery to red with a prancing horse on the bonnet.
Are the Canadian conservatives more like the British Tories or the US Republicans?
7, he’d have to do more than that. A visit to the interrogation centre accompanied by Oberleutnant Helga von Spankinghaus would be the minimum required.
Just seen the Bourdais incident, the commentator (not James Allen, the sensible bloke) reckoned nothing was wrong with it.
BBC Scotland’s Politics Show today - Glenrothes - 4 main party candidates:
http://www.bbc.co.uk/scotland/player/?item=4449241
As Easterross said on this morning’s PB thread:
- “meanwhile on Politics Show Scotland we are having a debate among the 4 main candiates for Glenrothes. Labour man is dreadful, Sarah Palin in drag. Way out of his depth and just keeps repeating he trusts GordonBrown and GordonBrown is great. LibDem man speaks much better than he looks. SNP candidate fairly assured and looks like a professional politician. Tory lad seems down to earth but like Davina in Glasgow East will probably only score brownie points for a future campaign in a safer seat/better prospect. It should be on the Parliament programme later ths afternoon
by Easterross October 12th, 2008 at 1:18 pm
And if you haven’t seen it yet, anyone thinking of betting on Glenrothes simply MUST watch this:
‘Politics Now (Part 1) - Thursday, September 25 ‘
http://video.stv.tv/bc/news-politics-now-version4-edit-20080929/
The Lindsay Roy and Peter Grant interview is from about 5 minutes 30 seconds. Apparently that was Roy’s 3rd attempt -> his first two were unbroadcastable.
10, I hope Labour don’t win - you might die of shock. Is the date the 6th?
5. given how clueless both massa and hamilton have been in the last 3-4 races that is not all that unlikely !
8. I find it very hard to get my head around Canadian politics. Superficially, it looks like British politics, with FPTP elections; a Conservative Party on the Right, vs a Liberal Party on the centre-Left, which one could equate to New Labour, a nationalist party in Quebec, similar to Plaid or the SNP, and a further Left NDP, which one might equate to the Liberal Democrats.
And yet, it’s not like that at all. Canadian politics is actually very volatile, with parties emerging from nowhere (Reform, ADQ) or collapsing very rapidly (Progressive Conservatives, Union National). And at provincial level, political parties often bear no relation at all to their federal counterparts - some provincial Liberal parties are right wing (eg British Columbia) and some provincial Conservative parties are left wing (eg in the Atlantic provinces).
So, in a roundabout way, I don’t think the Canadian Conservatives can be easily compared to either their British counterparts, or the Republicans.
6. I’m happy to have given you the chance to show your true nature. This data is meaningful for my future activities here on PB.com.
12, they haven’t been stellar recently, but standings are as follows:
Hamilton 84
Massa 79
Kubica 72
(Raikonnen’s on 63 and cannot win unless he manages to score 21/20 points in the last two races of the season).
Kubica’s 2 points behind Hamilton even if Hamilton scores none next week and Kubica wins. Next week, if Hamilton finishes ahead of Kubica then Kubica cannot win. If Massa finishes 2 points ahead of Kubica, he cannot win.
I know this happened last year, with Raikonnen coming from nowhere, but Kubica doesn’t have a top tier car, and I can’t see it happening.
As an aside, Quebec must be the only place on the Planet where promising to cut arts funding could cause a party’s poll ratings to decline.
8. Nowadays, I’d say slightly more like the US Republicans.
The Progressive Conservative Party spent most of the twentieth century as the centre-right rivals to the Liberals; and some “Red Tory” PC politicians, notably at provincial level in Ontario, came close to Christian Democratic centrism in their support for the welfare state and government spending. During the 1980s Brian Mulroney led the PCs rightwards towards a Thatcherite/Reaganite agenda of deregulation, capped by the ratification of NAFTA; but this was complemented by fairly strong environmentalist policies and an attempt to pander to Quebec nationalists by renegotiating the 1982 Constitution. As is well known, Mulroney’s experiment in constitutional change ended in diaster with the Meech Lake and Charlottetown Accords and the PC’s drubbing in 1992.
The present Conservative Party of Canada (CPC) mainly comprises members of the Reform Party / Canadian Alliance which came to prominence in the 1990s on the basis of “Western alienation” - a populist assault on the political establishment’s perceived Eastern bias and willingness to grant concessions to francophone Quebec. The Canadian Alliance merged with the Progressive Conservatives in 2003 to form the CPC. However, the minority Harper government has curbed its right-wing populism fairly successfully during its time in office.
http://en.wikipedia.org/wiki/Conservative_Party_of_Canada
http://en.wikipedia.org/wiki/Progressive_Conservative_Party_of_Canada
http://en.wikipedia.org/wiki/Reform_Party_of_Canada
Gordon is on Sky News with suspiciously black hair. The crisis is rejuvenating him; he’s going to look like Jake Gyllenhall by Christmas!
This is simply unbelievable
http://www.americanthinker.com/2008/10/who_wrote_dreams_from_my_fathe_1.html
Sorry, that should of course read “the PC’s drubbing in 1993″.
And post 17 should be viewed in the context of Sean’s wonderfully succinct analysis at 13.
Morris D Martin Brundle, to whom you refer, is an ex-driver of some standing and neither he nor me could see anything wrong. What was poor old Bourdais to do, go into hover mode as he left the pit lane? Stop in awed respect as a red car was approaching.
I have watched F1 for longer than I care to remember - having been brought up near Silverstone in the days where it was still real racers and owners.
But if the current crap continues I will stick to Indy. The stewards are increasingly useless at most F1 tracks, tending to be more PC than Harricot Harperson.
They seem to want to stop racing and overtaking. I think penalising Hamilton was a farce as over hot first cornering causing cars to go off the road has never, as far as I know, been penalised before. He didn’t even hit someone. It may have been a silly rush of blood to the head but racers do tend that way sometimes and that is what makes it interesting.
Similarly I am not sure it was right to penalise Massa for trying to come back at Hamilton? That is racing. Schumacher did that as a habit, starting with Damon Hill in Adelaide, and how often was he penalised?
If they get so prissy that all the cars go round like a millionaires magic roundabout then it will be for kiddies not for me. it has to be sorted and soon, and Mosely is not the man to do it. He seems to me to be more concerned with control than sustainable entertainment.
15 - Nobody doubts that Kubica is an outsider. But to advocate backing both Hamilton and Massa as a “free money” bet is obviously ridiculous when someone else can win!
Can someone answer something about RBS. A few months ago they raised £12b in a rights issue. If the market is to be believed they are now worth less than even that £12b. Where has the money gone, and in this context isn’t the £10-15b being offered by the Govt just a drop in the ocean?
17. It was pretty much a takeover of the PCs, rather than a true merger, though. Some left wing PCs, including a former Prime Minister, refused to have anything to do with it, and established a Progressive Canadian Party which performed dreadfully at the last election.
Are ‘No Overall Majorities’ becoming fashionable, hmmm could be the, ‘Shape Of Things To Come’
19 - People claimed that Irving Berlin had a secret black composer helping him write, we still get those claiming that Shakespeare’s works could only have been written by someone more educated.
There are two factors at work here, firstly pure jealousy, secondly an insidious class or other division from those who refuse to believe that there are no such boundaries in art.
Totally mad and I doubt anyone would believe it, even the writer, but it’s interesting to see it at work.
24. No. Canada is politically where we were in 1910, in so far as a large separatist bloc makes it very difficult to get a majority.
Quebec has 75 of 308 seats (24.4%) in the Canadian House of Commons. By contrast, of Westminster’s 646 seats Scotland has 59 (9.1%) and Wales has 40 (6.2%). That makes a big difference to the likelihood of a blocking separatist minority.
Gordo’s tent gets bigger-n-bigger, seant will be in it soon!
Tory business chief backs Brown bail-out plan
Those are not words I would normally expect to write, but Simon Wolfson (chief executive of Next) did just that on the Andrew Marr prog today.
Sitting alongside the wonderfully dour Jon Moulton on the Marr sofa, I fully expected retail whizzkid Wolfson to stick the boot into the Government for its handling of the economy.
Why? Well, for one thing he co-chaired (with John Redwood) the Conservatives’ Economic Competitiveness policy group last year. The report won lavish praise from George Osborne for its insight and tax-cutting zeal (though the leadership stopped short of endorsing all of its proposals).
For another, Wolfson donated £10,000 of his own readies to Dave Cameron’s leadership campaign and has remained close to the Tory leader ever since.
But instead of going on the offensive, Wolfson proceeded to defend the Government’s £500 billion bail-out plan.
“What we have to recognise and what’s really important is that the money that is going into the banking system from the Government isn’t money that is being spent. It’s money that is being invested. There’s a lot of nonsense being talked about it and my biggest concern is that actually we worry everyone to death and we worry the market to death.
“And actually when you look at what the Government’s been doing, it’s the quickest plan put together by any government across the world. We’ve had Opposition and Government working together. We’ve had the FSA, the Bank of England and the Treasury all working together to deliver what is in fact a very good plan - and will probably make money for taxpayers.”
Now I know Wolfson is a smart guy who is probably more interested in shoring up consumer confidence to protect his own retail business than praising G Brown and A Darling. But still, they were words that may well come to be quoted by Labour.
23. Yes - a fair comparison is the Liberal-SDP merger in 1988. Both were formally constituted mergers, though one party was dominant and the dominated party fractured at the elite level.
19l. It wouldn’t surprise. Nothing much does. That it was Ayer’s hand might raise a few eyebrows in response though.
29. As opposed to a regular Joe Soap ghost writer.
22, you’re right. I hang my head in shame, and will report myself to Oberleutnant Helga von Spankinghaus at once
3: Um, isn’t that a huge arb? Bet £40 on Labour with Coral (potential win £133) and £100 on SNP with Sporting Bet (potential win £40). If Labour wins, you get £33 net. If the SNP win, you lose nothing. Scale up to whatever they’ll let you bet, or put slightly more on the SNP to give you a win either way.
23
Which Party was it that was founded by Keifer Sutherland’s mum, and did she do it in 24hours?
22. The market capitalisation represents the value of all future revenues and net assets. Net assets = Assets - Liabilities.
RBS raised £12 billion, but the market believes that it will make big losses in the future.
The £12 billion is on RBS’s balance sheet as shareholders equity and reserves and forms part of net assets. But the future losses weigh on the share price.
For example assume RBS had no net assets (so all shareholders equity is wiped out by loan losses, but it isnt quite insolvent), but is expected to make profits for the next few years - each year the bank makes £8 billion. So the net value of £8 bn over 10 years at a 5% discount rate is £35 bn. So the market value of its equity would be £35 bn (just taking the 10 year horizon and ignoring market risk).
The present price tells us that the bank is being priced on the basis that it is unlikely to survive or that someone else is going to put money in and take some of the future revenues. So putting in 10-15 bn is enough to put confidence back into the bank.
22 That’s why Fred Goodwin & co have to go, they raised £12.5bn, saying it was more than enough, and now it isn’t. Their shareholders investment has been trashed.
According to Bankers Almanac last December RBS was the no 1 bank by assets in the world, tomorrow its nationalised in all but name.
http://www.bankersalmanac.com/addcon/infobank/wldrank.aspx
27 I really don’t get you, Cameron is backing the plan, mainly because he suggested that the government should look at the swedish solution, which is what they did, and produced something very similar, it is just silly to try and spin this as Gordon and Alistair are the new Keynes or Freidman.
Latest Gallup tracker :
McCain 43% .. Obama 50%
Note - Yesterday - M-42/O-51
Link to follow.
18 “Gordon is on Sky News with suspiciously black hair.”
Darling will be cross that Gordon has been at his eye-brow dye again…
33. Are you thinking of the NDP, founded by Kiefer Sutherland’s grandad (Tommy Douglas) in 1961?
http://en.wikipedia.org/wiki/Tommy_Douglas
39 Ah! I knew a relation had founded a leftwing political party I couldn’t remember which one, I don’t suppose he did it in 24hours though!
Obama is ahead 8787 to 13 Global Electoral College Votes (in the Economist)
http://www.economist.com/vote2008/
27 - There isn’t a shortage of things to criticise about Labour’s economic record. It would seem to be a bit strange to attack the one thing which they (hopefully) have done right!
19, 29. I think Morus’ view was that it was unbelievable bloggers on the right would be grasping at such straws.
Any pointers at what the Footsie will open at tomorrow?
42 - what better way to neutralise your political opponent by agreeing with him?
Sometimes we can get a bit too political over this sort of thing - could be that Wolfson, Cameron etc might simply think it needs to be done because financial institutions going under won’t do anyone any good?
Top BBC political story begins:
“Gordon Brown says he believes confidence in the banking system will be restored by global action “in the next few days”.”
The story ends with selective pro-Labour quoting of the last opinion poll.
What do we think of Brown’s brave prediction?
Link is http://news.bbc.co.uk/1/hi/uk_politics/7665645.stm
46 I hope he is right. I will live with the gloating if he is.
21 - spot on Witan. The Massa penalty was fine but they’ve set a horrible precedent by ruling on a 1st corner incident with Hamilton today, and then the Bourdais farce - laughable in the extreme. The sooner F1 is shot of the Ecclestone Mosley kleptocracy the better in my opinion.
Now back home after 3 wonderful weeks in China, Mongolia and Russia. Interestingly, no large scale coverage in the Russian media when I was in Moscow and St Petersburg of suspended trading in the stock market. Looks like they’re going to delay bad news just as they did with the Kursk and the 1998 financial crisis, with words like crisis and collapse off the radar - old habits die hard. No outward signs of panic from the Russian people though - they’re a pretty stoic bunch after all they’ve gone through.
Am looking for a temporary bottom in the Dow around the 7,000 mark at the end of the 3rd Elliott wave in a series of 5 (FTSE temporary bottom around 3200-3300 at the March 2003 low), before choppy trading just above that level before the end of the year now. I still think the Dow will be around 4,000 and the FTSE at about 2,000 when the market bottoms - 70% declines in catastrophes like this are historically about the norm. Big question is when the mass flight to US Treasuries unwinds, and the associated collapse in the US dollar, and then a final meltdown in the derivatives market? Also does the deflation become entrenched in the economy a la Japan, or do we repeat Weimar, ie print money so hard that eventually it turns to a hyper-inflationary ruin after a period of deflation? - I tend to favour the latter camp tentatively but I think it’s probably too early to tell for sure.
Can someone explain this one to me please.
It is a paragraph from Robert Pestons latest Blog on the BBC website and it goes as follows:
“But its embarrassing even for Barclays. It didn’t want to raise more than £3bn but it has has been pressurised by the Treasury, Bank of England and FSA to raise nearer £7bn.”
What the hell is going on when a bank can be forced to borrow more money that it wants, and pressumably needs, to by the Government? Since this will neccesitate Barclays accepting government placemen on its board isn’t this akin to the government forcing a bank into partial nationalisation when there is no need?
45
Really! the Labour Party should ensure its holding the copyright on its ‘83 manifesto.
http://www.labour-party.org.uk/manifestos/1983/1983-labour-manifesto.shtml
The way Dave is going, he’ll be dusting it off and offering it to the electorate as his, ‘Plan’ lets see if he has more luck with, ‘The longest suicide note in history’
48.
You reckon FTSE 100 will eventually botttom out at 2000.
I’d better get my coat then….
50
http://www.bbc.co.uk/blogs/nickrobinson/2008/10/banks_partnationalisation_good_or_bad.html
I think you need to read this from Nick Robinson
8. Somewhere in between. Definitely a lot more radical social conservatives in the Canadian Conservatives than in the British ones. As much of the old PCs are in the Liberals now as in the Tories (Scott Brison, David Orchard, various others).
46 like voreas I hope he is right, and can put up with the inevitable gloating, repetition of “his bold decision” in every speech, as long as it delivers an escape from what hunchman forecasts. I share his fear that Governments will have pumped so much into their economies by end 2009 that we get an inflationary boom/bust to follow.
Well that’s the Fin de siècle over now - a new world order being born. Enjoyed the Naughty Noughties, most of the nineties weren’t bad. Next few years don’t look much fun though, but better than WWI was in bringing the 20th century into being.
Looking at the US election Obama is struggling with Ohio. Probably on the same level as Indiana and Missouri.
At present he should claim all three. But I reckon they will all be red on Nov 4. He’ll still win though with Kerry plus Iowa, Colorado, Virginia, New Mexico, Nevada, and his big bonuses of Florida and North Carolina.
48 - So is it going to go down to 2000 coz that it was is its true value, or because the market is just going to keep on panicking?
‘Poll reveals young keen on an independent Wales’
http://www.walesonline.co.uk/news/wales-news/2008/10/12/poll-reveals-young-keen-on-an-independent-wales-91466-22015189/
People who vote Tory are the least likely to be in favour of giving more power to the Welsh Assembly, a poll on public attitudes to devolution shows.
But half of Labour supporters surveyed back Wales having a full parliament or independence, a survey for the Assembly Commission has revealed.
http://news.bbc.co.uk/2/hi/uk_news/wales/7665329.stm
I know Robert Peston has got loads of flak but maybe he should become a political commentator when asked is this Gordon Brown’s Falklands moment he answered:-
1) He answered that Brown had been looking at the bailout for the last 2-3 weeks and he may well look good internationally.
but
2) It should not be forgotten that he was a cheerleader for the debt mountain and lightly regulated free markets and certainly has to accept part of the blame.
I think this is genuinely the position and an unbiased view. Morus please note.
15. 21/20? In Formula One anything is possible…
19- its not just unbelievable, its completely unconvincing.
The author of the piece uses as ‘evidence’ that because he wouldn’t know how to properly use the word ‘ballast’ as a metaphor without googling it, that theres no way Obama could have done either. He also repeatedly uses his own book as a ‘control’ (Obama and Ayers both use lots of maritime references whereas I don’t, Obama and Ayers both use more words per sentence than me etc etc).
Evening all
As the first details of the plan to recapitalise the banks leak out the first signs of resistance appear from the blogsphere. There seem to be two strong sentiments out there: - one, why should taxpayers; money be used to bail out the bankers ? and two, why is there so little criticism of Brown’s actions which got us to this point ?
The first point was much in evidence last Wednesday in the blogsphere and was a widely-held sentiment which found no voice in the HoC. IF the plan announced (presumably) pre-opening tomorrow involves the kind of sums being touted, there will be many people not listening to the advantageous spin but will instead be wondering why so much money has been thrown at this.
The second point is the emerging one and the question raised by Heffer yesterday. Crises like this are manna from heaven for struggling Governments. In defence of the Conservatives and Lib Dems, it wasn’t that obvious to come up with a fully-worked and costed alternative plan. To simply decry the use of taxpayers’ money wouldn’t have looked good against the “something has to be done” mood. Though I’m no Tory, criticising Cameron and Osborne is unfair on this.
When I mused on the longer-term economic impact of all this yeaterday, runnymede thought things would return to “normal” after a few years of stringency. He may be right though seminal events like the Great Depression of the early 30s do stay longer in the folk memory.
Some are saying “tax and spend” is dead, others mourn the passing of Thatcherite free-market economics. I would go further - I think this crisis will be as significant for the culture of Government and economy as the 1970s was. 1979 marked the end of post-war concensus economics and Government. It will be interesting to see if 2010 will mark the end of the social democratic free market concensus that has been around since 1990.
58 In his latest blog “What a sorry end to Britain’s longest ever period of unbroken economic growth.” He’s still getting well briefed from his sources though isn’t he.
60 - Did make me wonder who Obama’s ghost writer was though….
37 Gallup tracker: As a Obama supporter, Jack W. is not reporting the following very interesting detail
“Obama’s current advantage is slightly less when estimating the preferences of likely voters, which Gallup will begin reporting on a regular basis between now and the election”.
RV has Obama up by 7, but in the two LV models the advantage is only 4 in one modell, 6 in the other.
Hope springs eternal!
41. I think that poll is somewhat swayed towards the demographic of Economist-reading internet surfers.
50 - Labour’s 1983 manifesto probably would have worked about 10 years earlier. By the time 1983 had come about though, the general public were fed up with that particular brand of politics.
It was suicidal insofar as it didn’t chime with the mood of the country at the time.
Fast forward to 2008, and the general mood right now is, if the banks have to be part-nationalised so be it. Just make sure our money is safe (not really socialism, just capitalism being pragmatic). Think I said yesterday that there is precious little political expediency in “the real world, which explains why poll ratings haven’t really risen or fallen sharply.
One thing to point out about Brown’s likelyhood to gloat - that would be the surefire way of undoing his goodwill he has built up. If he’s got any sense he should do the dour-but-worthy Scot routine.
57. I think the most notable point of that poll was that only a quarter of Plaid Cymru voters want independence. That’s not much of an activist base for it.
I reckon London should vote to go independent, that would f***’em all up!
The risk in the UK plan is that the money raised now is not enough - and the problem here is enough is a moving target - a few months back RBS had enough capital - now it does not . How much is needed depends on the expected loan losses to come - at the moment the losses have been primarily in the US mortgage market but fall in UK house prices and rising unemployment has significantly worsened the UK originated losses . The downturn in the uk has some way to run - but what will sink the lifeboat is if a further losses come from the credit card markets and the private equity leveraged buyouts two areas not causing significant problems at the moment but likely to do so . If the lifeboat sinks we are in real trouble . The Uk amongst major european countries is also , despite labour spin , in about the worst position to start from and that is why we are first in line with the state funding of banks .
63. Out of interest Jan, what is your genuine reason for supporting McCain? The only Europeans I know supporting him are anti-abortionists and neocons who still think Iraq was a good idea.
63 Jan. I report all the polls in the same fashion.
67 - amen brother. We must seal the M25 so our vibrant, cosmopolitan city can finally stand alone without everyone else dragging it down.
We’ll keep Weybridge and Cobham because they’re quite nice bits, although as a peace offering we’ll allow South Mimms to be annexed
66. There won’t even be a referendum on increased powers for the Assembly in the next few years because it’d get beaten. That’s why proponents tried to get it passed without referendum. PC have a huge problem in any seat or area without a significant base 20% or more who have Cymraeg as their first language.
65. That’s a very important point: “socialism” implies an ideology; the current proposals are not motivated by that ideology, but by necessity. Even if the government ends up with a majority stake, I’d expect it to look to sell as expeditiously as possible.
Double Carpet: There was a suggestion that if there was a hung parliament in Canada, the Liberals + NDP + Bloc would force a vote of confidence in the Harper administraton (which they would lose) and then go to the Governor General with a Lib / NDP / Bloc grand coalition or sue the Conservatives for the cost of the election. Is that still an option?
69 I’d say a small majority of Conservatives, of my acquaintance, would support McCain, because they’d instinctively support the Republican candidate, just as they’d instinctively support Sarkozy against Royale. Undoubtedly, non-Conservatives would overwhelmingly favour Obama.
Assuming we survive this without some witless policy foul ups that leave us mired in the great depression - which I dont think will happen, but I suspect things will be hairy for quite a while, it is too early to claim that this represents the end of free market swashbuckling capitalism.
Firstly, what drove this enormous disaster was aggressive interest rate policy by Greenspan and others and the foolishness of regulation. The regulation will be changed, but financial innovation will remain with us - a good thing given that wider credit availability is good for everyone, but especially the poor, who had least access to credit in the past.
Sub-prime turned out to be a disaster, but I predict that it will come back. In some ways this is like the 1987 crash and junk bonds. Junk bonds were developed by Mike Milken when he calculated that “fallen angels” formerly investment grade bonds that had become junk (rated less than BBB) offered higher returns than investing in investment grade bonds even though the defaults were higher amongst the fallen angels, because the ones that survived did so much better. Milken went over the top and was sent to jail, but junk (renamed High yield debt) did very well after 1992.
Sub-prime makes a lot of sense. It is good for the borrowers, who get access to credit, and for the lenders, who make higher returns. Remember sub-prime borrowers borrow from loan sharks, check cashing and pawnbrokers. Getting a subprime loan is far cheaper, but is still a good return for the investors. The problem was far too many people with no chance of paying back were enticed in, the lenders started offering insane stuff like loans with no payments for the first 18 months followed by double payments in the next 24 months. All of this is basically fraud. But offering credit to the poor, using complex trades to offset risk, this remains the future. VaR and BIS II are of course destined for rubbish bin.
But first, the white knuckle ride…
74 How could you sue someone for the cost of an election?
68 - I think the key thing in all this is not the increased capitalisation. It is the guarantees on interbank lending. Get that going again and RBS will be able to “trade” its way out of its problems (although it will take a long time).
75. Yes, I suppose that’s true. But I’m imagining someone as well-informed and intelligent as Jan has more to it than instincts alone.
58 - Noted!
57 - I think the survey is pretty clear that the choices are an Assembly or a Parliament. Independence or reversing Devolution simply aren’t on the table.
63. +6 puts Gallup in line with Rasmussen and Zogby
78. Yes, the interbank lending guarantee was the smartest bit of the whole plan in my book.
74 - Harry - I’m not aware of that, although Jack might be.
Latest ARSE (BUTT)/Daily FAB tracker :
McCain 42.9% .. Obama 50.8%
Note - Yesterday M-42.4/O-51.01
………………………….
ARSE (BUTT) sponsored by the Daily Felines Adore Broxtowe
On a Sunday dog day afternoon an Obama supporter gets an right earfull from a McCain surrogate :
http://adorablay.files.wordpress.com/2007/02/adorabledogncat.jpg
Donations to :
http://www.cats.org.uk/
80. I think the most important question is how much would these views change if Scotland got independence, as Wales would never do it first. I mean if “Britain” is no longer in existence then neither will “British” surely - people will think of the residual state as being England plus a few other bits. And that would make the other bits feel a bit neglected, I reckon.
80 See 72. It’s all academic for the medium term. The WPLP are fervently against it and even if they weren’t if they could barely squeak home when their approval ratings were in the Stratosphere, they are hardly likely to on an increased turnout with their present ratings. If Cameron wins expect it to be forgotten altogether for several years.
84
Well Jack W, at least the BBC is being absolutely and utterly unbiased in its reporting of voter intentions.
http://news.bbc.co.uk/1/hi/world/americas/7665925.stm
Latest Muhlenberg College/Morning Call tracker for Pennsylvania :
McCain 39% .. Obama 51%
http://time-blog.com/real_clear_politics/2008/10/morning_call_pennsylvania_trac.html
76 - Not really in on the complex details of subprime schemes, but i think you must be being deliberately provocative if you think the subprime mortgage market has any future.
It’s one thing to argue that it is preferable for people to borrow from banks than loan sharks. But simple borrowing was not what subprime mortgages were all about. It was simply borrowing in order to specifically fund house purchases. In other words, creating a market for lending and borrowing where no market otherwise existed.
No banker with any sense is going to touch that with a bargepole in the future. Some moneymaking opportunities are better left unexploited.
87 MTF. In that case it has God on its side !!
85 - if Scotland left the Union then Wales would have greater influence at Westminster.
82 Socrates: the interbank lending guarantee was the smartest bit of the whole plan in my book.
Glad you think so. As usual, PB.com got there first:
“It would be more sensible to guarantee inter-bank lending.
by Richard Nabavi October 5th, 2008 at 9:29 pm “
90 I suppose they couldnt find an 105 yr old to balance it up , your not a dual national are you? You could say you were voting McCain…
85,91 Wales will never vote for independence before Scotland, but if Scotland go then expect a massive surge in demands for Welsh independence. But I personally think that this is more likely to be driven by demands for English independence!!
BTW what is the deal with HBOS. With the Govt buying a large stake in it does this mean that the Lloyds merger is officially off?
93 MTF. Wash your mouth out !!
Meanwhile ….
As Jan from Norway indicated upthread Gallup are now publishing three voting models and accordingly from Monday I report all three.
1. The present RV model - O+7 (RV)
2. A past voting LV model - O+4 (LV)
3. A new LV model accounting for increased registration and AA turnout - O+6 (RV+)
http://www.gallup.com/poll/111064/Gallup-Daily-ObamaMcCain-Gap-Narrows.aspx
EU to change accounting rules.
91. So would England. And as the Scottish are closer to the Welsh in their political thinking Westminster would be further from Wales’ wishes. But ultimately, I think that it’s pretty academic. I think these things depend more on vague factors than logical political arguments in most voters’ minds.
92. Credit where it’s due!
15 EU countries to guarantee interbank lending
O/T SportingIndex spread for Labour is now up to 237-243, which means I’m showing a loss at present, having sold Labour at 232. I note that Mike closed his position at a loss earlier today (when the spread was 234-240). I feel that the blip is only temporary, given that bad economic news is bad for Labour, but it does look as though at least in the short term things may go further against me. Tricky one..
Officially being portrayed as “Sarkozy’s initiative”
CMC currently forecasting FTSE up on Monday.
100 Yes, I’m in broadly the same position, Richard. I decided a while back to sit it out and will continue to do so.
Vince Cable:” Government may have to take board seats ”
As I said on previous thread who on earth can the govt put on the boards of British banks to make sure our money is safe?? People from the FSA? the BoE? Labour MPs? I don’t think so Vince!!
97
If you take a look at Richard North’s blog today you will see that this has been on the cards for at least the last year.
http://eureferendum.blogspot.com/2008/10/theyve-known-it-all-along.html
As soon as they brought in the Mark to Market legislation in 2006 they realised they had made a big mistake and left the markets open to just the sort of crazy insolvency situations we have seen over the last few weeks. They have then spent the last 8 months or so trying to rewrite the rules - fiddling whilst Rome burned. Now it is too late they are finally coming out and changing the rules whilst pretending that they weren’t really a problem and this took them all by complete surprise. Complete lying scumbag fething idiots.
32…it represents an “overbroke” book of roughly 94.5% and therefore is in the backer’s favour.
Looks to me as though (subject to events in Asia) the FTSE will open 65-75 points higher and back over 4000.
We’ll see…
100…if in doubt cut your losses.the first loss is the best one! however,if you still trust your judgement then increase your position and sell again.
103 - Thanks, PtP. I’m pretty confident long-term, but nervous in the short term.
105 - Yes, although he’s wrong about the speed. I could have misheard but i think that Barroso said that the rules would be changed for “third quarter reporting” - ie. immediately.
105. But how do we square North’s argument that
…the “risk management” model associated with “mark to market”…. artificially under-valued sound assets, drastically reducing the liquidity of the banks…
…with the surprisingly large losses incurred by Lehman Brothers’ bond holders, which suggest that a large volume of assets may actually have been held at artificially high prices prior to their collapse?
Sky - Lloyds/HBOS deal collapses
Sky - RBS boss Sir Fred Goodwin leaves his post.
Irf the HBOS deal is true then we are on for carnage on the FTSE in the morning.
93 You neglect the language sore point. A large section of the English speaking population think PC look down on them for it. Why else have they neve done anything apart from the one off spike in 99 in areas where there is not 20% or more Cymraeg. Glasgow East was at least in the tradition Glasgow Govan etc. PC have no such precedents. That’s why a By-Election in this Parliament in a Valleys seat would be so fascinating if Labour are still struggling.
As they are 12 hours ahead of us, the NZ stock market has just opened. The NZ dollar has rallied slightly against the US dollar going back above 60 cents.
The NZ50 index closed at 2805 on Friday, down 139. More information here:
http://www.nzx.com/
112 - not necessarily. The latest bailout has effectively replaced the deal, the failure of which was already being priced into the market to some extent already.
104. Tony Blair could use a few directorships to pay his mortgages.
Still, could save Labour in West Yorks.
74, 83. I hadn’t heard of that either. In fact I haven’t heard any suggestions of the Bloc joining a coalition.
116. Yes I am afraid that was my general point - just the sort of scumbags we are likely to get!
112. Oh, sh!t.
I am so glad I’ll be asleep at 8am tomorrow. Not looking forward to checking the numbers when I get up at around lunchtime.
117. There could be a connection, of course…
112 If the Lloyds-HBoS deal has collapsed, the signs were there on Friday:
“Lloyds TSB down 6% today - HBoS down 26% today. There is going to be some serious pressure to unravel - or at least renegotiate - that deal.
by Marquee Mark October 10th, 2008 at 3:03 pm”
110
bear in mind his comment about the timing was written before the announcement and that he was basing his timing on the normal speed at which the EU get anything done. Given that they have known this was a problem for a year and done nothing it is not surprising that one would not expect them to suddenly change the speed at which they do things.
111
I don’t know enough about the specifics of Lehman’s but I do know that lots of people have been saying the Mark to Market rules have caused a lot of unnecessary damage to the markets and that it is these rules that the EU is now finally changing - but a year too late.
123. Yes, lots of people have been saying that, but that does not make it correct, I’m afraid.
I think what we can say is that Lloyds have had a massive escape. They were proposing at one point to pay close on £2 a share for a business that needs up to £10b to survive.
124 Well obviously the EU do or they wouldn’t have spent a year looking to replace them.
This is not 20:20 hindsight. There have been plenty of predictions that the accounting rules would cause just this sort of problem. Since they turned out to be right I am inclined to say the critics were correct.
Isn’t it a public holiday in the US on Monday so will the Dow be shut?
126. That seems rather circular reasoning. You still haven’t established that mark-to-market rules have led to artificially low prices for assets, as has been suggested. They may have forced some losses out in to the open that banks would have preferred hidden (and that perhaps explains some of the recent attacks on the rules) but that is not the same thing.
Indeed there is a body of evidence developing that seems to contradict the notion North et. al are putting forward. Latest estimates of hold-to-maturity losses on subprime assets by S&P suggest the mark-to-market prices may be fairly accurate estimations of ultimate losses, after all. And then we have the surprising scale of the Lehmans losses. And the surprisingly large estimated capital losses of UK banks reported in today’s Times. Evidence the other way seems rather scant, to say the least.
103 PtP - Already moved back to 234-240. When Peter the Punter speaks, markets move!
127 Yes, I believe so - Columbus Day.
2. Genius.
125 Has Robert Peston confirmed the Sky story though?
109 You are becoming a true punter, Richard. Nervous is exactly what you should be!
Seriously, I can’t see Labour doing well long term. Short-term they may do so, but the situation is extremely unpredictable and I’m not going to try and outguess the betting market over the next few weeks.
132
The report is a little confused.
Lloyds had agreed to pay £9.8bn for its rival but there were fears it was paying too much because HBOS shares have plunged.
The Government had encouraged the takeover and had promised to change the law to allow the deal.
But a spokesman for HBOS said the deal “remains in place and is on track”.
12 But that in itself is circular thinking as those very capital losses are based upon the current capital values after they have been artificially forced down by the MtM system. They are indeed surprising because they are not an accurate reflection of the real value of the assets as they stood prior to this current crisis. They are being valued under the very scheme which serves to reduce their value.
125. Not surprised it’s collapsed given the state of things. However, it was a Gordon Special, was it not? - the firm hand of an economic mastermind guiding recalcitrant and purblind companies to fiscal salvation? A lot of positive, nay, admiring comment about PM as fixer IIRC.
Bound to fall apart, then. The Brown jinx rules, OK?
135 Thats should have read 128
129 LOL! When I said short-term, I didn’t mean quite THAT short.
*************** Wake Up************************************
Can no body see what the government is doing? It is delibratly undermining the financial institutions to bolster it’s political standing!
If the HBOS deal falls through, then RBS will also get Nationalised as who the hell would put money into that from the private sector?
*************** Wake Up************************************
Northern Rock was not a consequence of US Sub-prime last year, it was a result of incomptence and a poor corporate plan. Yes, the inter-bank lending was a major part of this but the government and UK regulatory authorities in this country were responsible for corporate oversight. The Tories & LD’s are failing to challange the government on the calculated way the government and its cyphers are delibratly leaking information to create a self-fulfilling prophecy.
Lloyds will be wringing concessions out of the government all of us taxpayers.
Makes perfect sense. It never made sense that they were buying this toxic failed business in the first place.
140
Hmmm 2nd time my fledgling HTML has failed today, apologies. Meant to strike out “the government”
how do you do strikeout then?
135. Where’s your evidence these values are artificially low? As I said, hold-to-maturity estimates are starting to converge with market prices.
You also need to understand that a large chunk of illiquid ‘problem’ assets are not marked to market but rather valued using internal models. That process allows you to write in almost any number you want and may well mean that many assets are being written in at higher than their true value.
Some of the banks want increased leeway to put more assets into this latter category. I wonder why?
O/T Judging by most of the posts commenting on the first thread this morning about the possibility of Gordon Brown deciding to retire on account of his failing eyesight, not many believe that this is likely.
Those who do however, may wish to contemplate a bet on there being a GE next year, which would almost certainly follow on the back of Brown leaving office, especially were Labour to have improved somewhat in the polls.
The best odds available from a conventional bookmaker for a 2009 GE are 7/4 from Ladbrokes or Paddy Power, whereas for small money Betfair’s odds are 4/1 for the first half and 5.2/1 for the second half, resulting in average odds of 2.3/1 to cover the entire year.
If this story has any legs at all, I suspect that events to move quite quickly and therefore a bet on 1st half 2009 represents the better value IMO.
143. The rumour about his failing eyesight got started when Gordon claimed not to be able to see the writing on the wall….
Peston now ludicrously proclaiming the end of Thatcherism.
If any further proof were needed of his gross overestimation of his own importance. What a numpty. It’s like saying that because NICE have recommended against one drug it’s the end of Big Pharma.
127 130
Monday is Columbus Day. US markets have not closed for CD since 1958.
The US Market is open Monday.
Mark to Market.
Lehman proves the US banks - and the UK ones as well - have been hiding losses and far from marking to market have SYSTEMATICALLY deceived the regulators and shareholders. As indeed have UK banks.
It’s rather like Enron: hide losses in complex vehicles..
Mark to market is an illusion: it does not exist. Banks lie.
And to suspend it now means banks can lie even more…
There is precedent. After the 1990s Saving & Loans Fiasco many US banks Wier effectively bust. But they were allowed to conceal losses and wrote them off from following years’ profits…
Any suggestion that Banks’ auditors have a clue is a bad joke.
As for the regulators…
Well, now we are at the nub - several billion, possibly into the trillions of EU and American taxpayer money is going into saving the banks. There can be no plan B from here so fingers crossed and tin hats for the opening tomorrow.
I actually feel sick, its not knowing what next week will look like, let alone next month or year, its crazy I tell you, crazy!
132.
5 live have just reported that Peston has declared the Sky report to be ‘wrong’.
So that’s that, then!
148
Now on BBC ticker that LLOY are demanding renegotiation.
So Brown’s personally brokered deal goes t1ts up.
For future historians, I would like to place on record that at no time in my life have I voted Labour.