Spread punters flee the Tories
October 14th, 2008
The latest prices suggest an overall Tory majority of just 26 seats
After a morning of considerable activity on the commons seats spread betting markets there’s been a sharp move against the Tories and towards Labour as punters reappraise the new situation following the bank bail-out and how it is being viewed both in the UK and overseas.
Only two of the three main markets - Sporting Index and Spreadfair - have been open this morning. IG - which used to regard itself as a big player - simply has not been accepting bets either way and there are no figures to report.
My view, shared by other punters it seems, is that there’s little doubt that Brown and Labour will get polling boosts in the coming weeks and that that will affect views of the general election outcome.
The commons seats spread-betting are where the serious punters go to try to make money by using their political forecasting skills. The amount of money at risk can be far greater than what we see with conventional bookmakers or even the betting exchanges.
It can be a costly business. This morning I had to transfer a fair bit of cash to Sporting Index and IG Index to cover the losses incurred when I closed down my Labour sell and Tory buy positions on Sunday. Thankfully I got in early and since then the Tory price has slipped a further five seats.
This is a complicated form of betting but one that can be immensely rewarding and profitable if you can anticipate trends - particularly the media narrative that has so much impact on the polls.
Today and for the next few weeks at least Brown and Labour are riding a high and it’s going to be hard for the opposition parties to get a look in. Only a mug bets against trends like this.
Mike Smithson
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First. Mike’s story of covering his position shows why I don’t do spread betting! But I understand it’s a good proposition for those with ready cash.
First?
An end to Boom and Bust?
Interesting to read all the bullish Labourites today.
Enjoy it while you can. If you really believe that the debt bubble cirsis has been solved by the creation of a load more debt, well I think you may have another think coming.
Why is every so pleased the FTSE has gone up to 4500 when 3 months ago it was nearly 6000?
Northern Rock trading statement out today, did anyone see it? Mortgage arrears up by 58% in 3 months.
This whole thing has hardly started yet. The Darling plan may have stopped the banking system gurgling down the plughole, for which some credit is due (although he hardly had a choice), but the underlying debt problem has not gone away, and the solution has created huge problems of its own for the future.
3 That’s now officially called “Tory boom and bust” after campbell got at the evidence!
Labour bring back the boys for a reunion tour, and blow me, suddenly they are up in the betting stakes. Is there no end to what Campbell and Mandelson are capable of….
4
Yes
Hopi talks about the “recovery”.. and how Labour should tell us it’s coming.
As the recession is hardly started - officially Labour tell us there is none - it’s a bit premature to talk recovery.
About 18 months and 500,000 job losses premature. in my view..
But then earlier this year Hopi denied we would have a recession….
Prescott was right. Fourth term for labour. Shame the country will be f…. by the end of it.
[6] - I’m guessing that they can’t engineer the return of their beloved leader. Admittedly that’s a fairly loose limit.
Just goes to show the power of the “media narrative” in Mikes words and particularly of the BBC. Just imagine a slightly different narrative within the context of the same events but along the lines of Brown having created a mess and his actions being desperation to be seen to try and solve it rather than a great plan from a saviour. This description of events is equally valid but would have had a slightly different impact on betting/polls.
When did the spread markets ever reflect the polling situation? When the Tories had consistent leads of 20% + the markets never reflected the size of majority that sort of lead would have achieved.
I’ve stated consistently since 2005 that there will most likely be a hung parliament, and I’m sticking with that…
Both the by-elections and the historical range of election outcomes point strongly to it…
I forecast a swing to the Tories of less than 5%, minimal tactical voting, minimal regional effects, and minimal progress in Scotland…
And, again for the record, I have never voted Labour in my life, and am unlikely to do so next time…
Ot
Stock markets .
Prpeare for 2-3 days sideways in my view.. and then another trip- possibly to the lows of last week….
Today’s price action suggests lots of people selling into strength,
But as I’m only a chartist…
12. By-Elections point to a hung parliament? What, like Crewe and Nantwich?
382 from rpevious thread. I agree that if McCain had just “opposed” the package he’d have been trashed. I think his problem was that he had no alternative. There was no “McCain plan”. So he ended up looking like a follower, a line-tower and out of touch. If he’d said No, we want _this_ instead, (which is what paulson is doing now) he would now be gettign the positive reviews the PM is getting now. To put it another way, Mccain could have been the political Lazarus, not Gordon, if he’d thought of it.
Which is also a sort of riposte to those who say “uhh, the GB plan is old news, look at Sweden”. Apparently it wasn’t old enough news for Paulson, Bernanke, Obama or Mccain, eh?
I still think that, even in the short timescale you are dealing with for this spread betting, you are misreading the general feeling in the country and thath the swings to Labour will be no where near as obvious as you anticipate.
Put simply I think that Labour are now at their best possible polling position (at about 10 points behind) and that this will now deteriorate quite rapidly as the immediate fear of total collapse subsides and people turn their attention to both the reasons for this crisis in the first place (which Brown hs a lot to answer for) and the consequences of the ‘cure’ (which is going to be very nasty for a lot of people)
16. People haven’t felt the pinch yet, the earthquake has happened but the tremor’s haven’t hit the general population. As time moves on they will do, as unemployment rises and taxes rise to meet the spiralling budget deficit cause by increased benefits and a massive slump in corporation and other tax revenues they’ll feel the pinch even more. Brown has shown he can ride an emergency, but when the going gets tough he loses it. He doesn’t think more than a week or two ahead, and now has the added problem of no longer having any cash to throw to his supporters.
The recovery? Are they really are that ignorant?
Looking at the media you’d think we’d moved into Putin’s Russia, such is the joy at our soaraway stock market who everyone now seems to be an expert on, having watched it for the first time in their lives , for a few days. You really have to laugh at the goldfish type memory of the 24×7 news agenda and their reporting of this nationalisation as some great sucess. dread to think what next weeks headlines will be.
There looks to be medium-term value in a Tory-buy / Labour-sell position, though the opposite is probably true in the short term (meaning there’s no point taking the medium-term bet either as there should be better prices ahead in due course).
The next few polls should be more favourable to Labour, though still with them behind. They’ve had a good week in the media and the opposition have been quiet (remember Mike’s Cameron/news profile rule).
After that I expect a different picture. As with others, I can see a recession lasting up to a year with unemployment rising by several hundred thousand at least and a sharp rise in negative equity and repossessions. Unlike some others, I don’t expect many tax rises - the government will put off solving the problem until after the election and let borrowing run up even higher. Golden rule? Yeah well, it was only ever a guideline.
341 from previous thread:
‘The missing piece of the jigsaw is the political complexion of the 20% of the constituency outside the Central Fife seat for Holyrood - I don’t know if anyone can fill us in on that.’
Answer is that it’s solidly Labour, much more so than the Central Fife bits. Cardenden and Kinglassie are ex-coal villages that used to be in Gordon Brown’s old Dunfermline East seat; Buckhaven and Wemyss used to be in Kirkcaldy. Labour were comfortably ahead in the relevant wards in 2007, and were miles ahead in them in 2003. The addition of these areas in 2005 (and the loss of Leven East to North East Fife) probably added 4-5% to the Labour majority.
“Thankfully I got in early and since then the Tory price has slipped a further five seats.”
Ay, there’s the rub. Because with a spread of 6 seats, closing and re-opening a position is pricey.
So the question is: Is this a temporary blip, and if so, will it go far enough to justify closing a (currently-loss-making) position?
As I’ve said previously, this looks like an over-reaction to a slightly improved media narrative, against an appalling economic background. And with Brown more firmly established than ever. That doesn’t sound to me as indicating a significant revival for Labour, especially as the spread markets never fully reflected the previous Conservative lead in the first place (i.e. they had already discounted the possibility that things might get better for Labour).
It wos the BBC wot won it.
No doubt Brown will get a short term boost from all this.
But one point to remember is that the Banking rescue is not a positive which has a direct impact on anybody personally. It’s not like a tax cut where people’s pay goes up, or a Winter Fuel payment where money arrives in a person’s bank account, or a new hospital or school or road that people see being built and use.
Instead the Banking rescue is abstract - people may think Brown’s done a good and important job on it but the lack of direct personal positive impact means that it will fairly quickly slip from people’s minds.
Some people may say “oh, but if banks had collapsed it would have had a personal impact on people”. Maybe, but people won’t see it that way - people are concerned with what does actually affect them personally, not theoretical hypotheticals.
18. Absolutely, throughout this crisis the media has collectively failed in its duty to provide a balanced perspective. In a country such as Britain, where millions of people are apathetic to politics and ignorant of the issues, this is very dangerous.
7. err. I think you completely misread what I said. I was saying that people will want a plan for recovery that helps “ordinary families” once the imediate crisis has passed.
If you really want, I’ve some thoughts on what that might look like on my blog. This is not “saying a recovery is coming”, it’s saying “we should be investing fast to stimulate demand”. I nicked this idea from Paul Krugman, it’s not mine, btw.
‘Matrons return to Scotland’s hospitals’
Old-style matrons are set to make a return to hospitals in Scotland as part of a drive to improve standards in wards, the Scottish Government announced today.
Health secretary Nicola Sturgeon said the revamped role for senior charge nurses would tackle infections and provide leadership.
The Royal College of Nursing in Scotland said the move was “pivotal” to improving care.
http://www.theherald.co.uk/news/news/display.var.2460357.0.Matrons_return_to_Scotlands_hospitals.php
http://news.bbc.co.uk/2/hi/uk_news/scotland/7669300.stm
23. That’s exactly it!
Interesting as well Job losses as HBOS & RBS are still going to occur! They will blame the government! Could tip some interesting seats that as the jobs that go will be in places where thousands of people are employed.
Labour are still screwed in 18 months’ time. Fully agree with Richard @ 16 - “Put simply I think that Labour are now at their best possible polling position”.
When people vote in May 2010, it’ll be against a backdrop of higher unemployment, negative equity and a government in power for 13 years (plus a third Mandelson resignation). Two weeks’ grandstanding and boasting from Brown in October 08 will look like the hot air it really is.
25. Where are these investment funds going to come from? The budget deficit will be 7% or so of GDP next year even without any stimulus package. And public debt levels could reach wartime levels as bank liabilities are added in. The scope for any kind of stimulus is severely limited - it actually looks more likely that the government will be forced to curb spending.
The underlying picture of a Tory majority of over 100 still hasn’t changed. Even the most favourable poll for Labour still gives the Tories a 50 seat majority. I think this is the time to buy Conservative, not to sell them.
28. Don’t want to get into it here, but i’ve discussed this veryquestion on my blog. Gosh, I sound like Benedict!
18: If you think the BBC’s being pro-Brown, take a look Paul Krugman (the economist who won a Nobel prize the other day) in the New York Times:
http://www.nytimes.com/2008/10/13/opinion/13krugman.html?em
Has Gordon Brown, the British prime minister, saved the world financial system? …
But the Brown government has shown itself willing to think clearly about the financial crisis, and act quickly on its conclusions. And this combination of clarity and decisiveness hasn’t been matched by any other Western government, least of all our own. …
Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis.
I’m not going to pretend to understand this crisis, and I think the man’s an authoritarian scumbag, but I think you should seriously consider the possibility that on this occasion Gordon Brown may have actually done a good job.
Had to laugh at the Daily Mail today who cried foul over bonuses being paid to rich bankers - then listed four people who had successfully steered their banks clear of the crisis!
19 David Herdson “Unlike some others, I don’t expect many tax rises - the government will put off solving the problem until after the election and let borrowing run up even higher.”
I’m sure that you are right as to what the government would like to do, but I’m not sure they’ll get away with it. Government borrowing has just gone through the roof - indeed, into the stratosphere. In the coming months, revenues are going to fall, in all sorts of ways. (I was at a local meeting yesterday where one of the district councillors said that there had been a huge fall-off in planning applications, and therefore in the fees which go with them. But the costs of running the planning department are largely fixed. Multiply effects like that through local an national government, including stamp duty, VAT, etc etc, and the total shortfall on the revenue side will be huge.) Meanwhile increased unemployment will cause spending to increase.
There is a limit to how much the government can increase borrowing without provoking inflation, increases in interest rates, and an effective devaluation of sterling. Expect large tax increases and severe spending cuts.
Just a quick point, thanks to Mike (not) for pointing out that I was the first to mention what great value Labour were in Glenrothes a few days ago.
And I still think Labour are going to lose the next election, if the Tories don’t get a majority they may as well disband, I mean seriously.
Edmund I am very cautious about seeing economists and authors who win the nobel prizes as oracles. There is quite a lot of politics in the selections whereas for science it tends to be much more based on real scientific merit.
33. And with taxes already on the high side coupled with increasing inflation, I expect people to become very unhappy as time progresses.
33. And with taxes already on the high side coupled with increasing inflation, I expect people to become very unhappy as time progresses.
34 - So if the Conservatives get one short of an overall majority, they ought to disband? I’m not sure I follow your detective work, sergeant.
But kudos to you for being the first to spot the value for Labour in Glenrothes.
31. No, he hasn’t. Action should have been taken months ago - in the end it was forced on a government that was more interested in internal quarrels than the national interest by a near financial catastrophe.
The fact that other governments may have been even more idiotic is neither here nor there.
14. Yes, placed in its historical context, C&N does point to a Hung Parliament…
A 17.6% swing was good, but not that good to be confident of a Tory majority…
I think the Tory spread could get as low as 310-315 but when it does all should pile in.
We saw last week what happens when markets overreact.This will be no different.
In the meantime a sidebet on a June 2009 GE should be considered as a value bet.
GB might just think its his best chance especially as the pensioners and other on state benefits will be gaining around 5.2pct in April.
What about all the tax rises to come? How is this mammoth debt to be serviced? Real austerity looms.
Mr Smithson, it would be a very good time to have another of your polls on what the readership think would be the result of the next general election.
34 - “And I still think Labour are going to lose the next election, if the Tories don’t get a majority they may as well disband, I mean seriously.”
Just like Labour should have done in 1992…
31. I think you should seriously consider the possibility that on this occasion Gordon Brown may have actually done a good job:
Actually if anybody has done a good job it is the civil - service who suggested it!
31. Yes, but, if you’re gonna link to articles already linked to several times, so am I:
http://timesonline.typepad.com/comment/2008/09/boom-and-bust.html
I think the markets are over-reacting to Brown and Labour’s performance. In the Dog and Datastick people aren’t sitting over their pints, shaking their heads and chuckling in wistful awe at Gordon’s economic mastery of Swedish bail-out systems. They’re just scared. At the moment, some of them, especially the intrinsic lefties, are scared enough to return to Labour.
When these people realise that the End Times have not arrived, just a bloody nasty downturn, all those gloating Labour remarks about “an end to boom and bust” are gonna be poured, by the bucketload, over Labour heads. And the polls will adjust.
Indeed I already sense the first hint of a slightly tainted media narrative for Labour - the first articles saying “hold on, exactly how much is this gonna cost, who is gonna lose their jobs, what does it mean for national debt” etc etc.
Add in the inevitable dash of Mandelson anti-magic - already at work, the man is media poison - and you have the recipe for a pretty shortlived Labour recovery.
34 So do you suggest Labour do the same if they fail to get a majority? Twat.
[40] - The “historical context” isn’t complete yet Rod. The Parliament isn’t over. Add in a few more disastrous by-elections for Labour over the next 12 months and your statistics would swing in the Tories direction.
31: ‘…take a look Paul Krugman…’
I get the feeling Krugman’s main motive is to take a pop a Henry Paulson - if a small fish like Brown can up with something what have our lot been doing.
46 Yes, seanT. One of those quotes, by an acknowledged financial genius, sums up the current situation which Labour are facing perfectly:
“Our approach is to reject the old vicious circle of the ’80s–rising debt, higher long-term interest rates, higher debt repayment costs, lower growth, higher unemployment, then enforced cuts in public spending. That was the old boom and bust.” Gordon Brown: November 2000
21…a 6 seat spread makes seat betting a complete mug’s game!
48. I agree they could, but the “historical context” again points against it, since we are now in the final furlong to the election, when the inexorable swingback begins…
I’ll call C&N as the peak of Tory by-election fortunes…
FWIW, I have thought for a long time that the Tory ceiling next time is 300 seats, and could well be less…
50, incidentally, what did happen to Guido’s article about mysteriously missing quotes? Has he been enjoying a visit to Room 101 and learnt that he was in error to criticise the Supreme Leader?
Where is Jack to tell us the Rasmussen numbers?! (Its Obama +5, unchanged from yesterday by the way)
If I have understood the concept of spread betting correctly, the movements reflect SOME punters’ premonition of a short term swing in sentiment towards Labour (and, therefore, the potential for a short term profit) and have little or nothing to do with their view of the ultimate outcome of the General Election in 18 months time.
What will the national mood be in 2010 - the mood that your apolotical friends chime with when discussing politics for 5 minutes in the pub. “Brown messed up the economy but saved us from complete disaster”? I suspect the saving from complete disaster bit will be easily forgotten, but the legacy of debt and unemployment will be ever-present.
So Krugman won an economics prise ? So did these guys..
http://en.wikipedia.org/wiki/Long-Term_Capital_Management
[50] - I’m interested as to where it all went wrong, since Brown at least said the right things. The standard Tory line would be that Brown spent too much, but Larry Elliot in the Guardian has suggested that it was because the tax estimates were always too optimistic.
Why would that be?
I would have thought that the Treasury would be able to accurately estimate their own tax revenues with all the experience they have. So where did they go wrong? Or was there actually over-spending, in terms of spending more than Brown expected to spend?
Obviously I don’t think they should actually disband, they still have a base, but it does bring up a serious question.
Where do the Tories go if they lose the next election? Cameron isn’t their ‘Kinnock’, he’s their ‘Blair’.
Who’s next? Osborne? Or do they play the long game with Camo?
49. Yes - much as I admire Krugman’s work as an economist, we shouldn’t forget that he also frequently has his partisan political hat on.
50. Nice quote. What has happened of course is that by being forced into an expensive bank bailout by previous dithering, the government has now narrowed even further the already very limited scope it had to cushion the coming downturn with an expansive fiscal policy.
Paul Krugman is a well known Bush hater who sees the world through the same end of the telescope as Gordon Brown so his warm words should be seen with that in mind. I am at a loss to understand how nationalising the banks you have been regulating for the last 12 years is a sign of genius. Surely it is the biggest failure of economic stewardship in British post war history.
55…you can keep your bet running until the result of the election is known,if you so wish.
O/T for Coldstone - Not so Wonderful life…
you mentioned on the last thread your view that “It’s a wonderful life” explains all there is to know about America and capitalism. And that you think the Baileys of this world are right.
In the Washington Post’s sunday edition, a funny but smart article took the totally opposite view: this movie is the root of all Anerica’s problems, from subprime mortgages to gas-guzzling.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/10/AR2008101002267_pf.html
20. “Labour were comfortably ahead in the relevant wards in 2007, and were miles ahead in them in 2003.”
It sounds like you know what you’re talking about, although looking at Fife Council’s election results page it looks like the towns you mentioned are split between at least four local government wards, so I’m don’t see how it’s possible to say with confidence what the position was in 2007 (perhaps it would be possible for 2003 because the wards were smaller, but the SNP were doing less well in any case). For what it’s worth the councillor breakdown in 2007 was -
Leven, Kennoway and Largo - 2 SNP, 1 Labour, 1 Lib Dem
Buckhaven, Methil and Weymss villages - 2 Labour, 1 SNP, 1 Independent
Glenrothes West and Kinglassie - 2 SNP, 2 Labour
Lochgelly and Cardenden - 2 Labour, 1 SNP
So on the face of it, a mixed bag. But even if you’re right about the extra bits of the constituency being worth an extra 4-5% for Labour, that would bear out what I said on the previous thread that the SNP must have been at least level-pegging (and possibly ahead) in Glenrothes at the Holyrood elections eighteen months ago. In other words, to win the by-election they don’t actually need a further swing - they just need to maintain their position from last May.
59. If Cameron goes in off the black at the next GE then strap in for the Boris Johnson Experiment.
The Labour Party simply CANT be allowed to get away with this. Even media friends must surely realise that Brown has now put the country in hock for decades, and that fundamentally our banking sector has been ALLOWED to become insolvent, under a regulatory regime set up by Brown.
The public are now realising that the bubble has burst on them and that whilst their house “prices” were a matter of opinion, and are now falling, the debt, as ever, was real and now has to be paid.
The recent drop in support for the Tories, temporary or otherwise, does flag up the attraction of a bet on a “No Overall Majority” outcome at the next GE, on which I posted last night as follows:
“Less than 4 weeks ago, I was buying “No Overall Majority” at the next GE at 3.9/1, but that was when the Tories were enjoying 18%-20% leads in the polls and the prospect of a comfortable three figure overall majority.
With their lead now at around 10% and headed south, Betfair’s current odds of 2.75/1 look very much better value.”
by Peter from Putney October 13th, 2008 at 11:12 pm
52. Given though, that we are running into a recession, over the next 12 months, there must a considerable chance that no swing back to the government (or even a swing against them) will occur.
59 Don’t forget charlie that the Tories are coming from an awful long way behind - to get a majority would mean an unprecedented turnaround in UK politics. I still think they will but this churn underlines my point made over many months - there is no great desire for a Cameron government yet, simply a desire to see the back of Brown.
It is also unsurprising that, given the dog whistle core vote speech Brown made at conference, the national percentage of vote has increased as Labour voters increase in certainty to vote. As many have said, the underlying factors are still there. I would not bet against a Tory majority, but I’m not sure I’d bet for one either - YET.
65. God knows what the next budget will be, but I can tell you one thing. The scrounge culture that has become so hated (whether it exists as badly as some claim or not) will come in for a lot of bashing, but I can’t see how Brown can cut it.
SeanT up above said “I think the markets are over-reacting to Brown and Labour’s performance. In the Dog and Datastick people aren’t sitting over their pints, shaking their heads and chuckling in wistful awe at Gordon’s economic mastery of Swedish bail-out systems.”
On Friday the consensus in the House of Windsor pub in Witney was that Gordon had contrived the whole thing in order to get re-elected. Right, so he he can line up Bush, Congress, the EU and bankrupt a country just to get re-elected. Were that he was so powerful?
It just showed me how much people like conspiracy of the sad truth that it is usually cock up
67. The voters, like unsophisticated gamblers, will chase their losses, and stick (relatively-speaking) with Labour…
Max 5% swing to the Tories. Hung Parliament.
Thanks to antifrank for giving me the credit on the Glenrothes bet, shame our genial host doesn’t do the same once in a while
Whilst the longer term prognosis for the Government is uncertain to say the least the next month or so could be a reasonable one. Currently it does seem to many in the media as if GB is leading the world and this is clearly feeding through into the polls. Also as Mike S mentioned this morning the Glenrothes byelection might not be the disaster predicted (the recent polling evidence, though thin, does suggest that Labour has recovered most strongly in Scotland). So with DC out of the media and the government not loosing as expected a byelection it seems to me that a modest improvement in the labour seats position is to be expected in the run up to christmas. Whether this will be sustained or have any relevence to the actual outcome of the GE is a moot point but in general the way to make money on the spreads is by short term buying and selling.
12 and 41. I think you are right. There will be a swing back to Labour in a campaign. FPTP is in Labour’s favour if they manage to get close to the Tory share. If he misses June 2009, he will be boxed in, and we will effectively have either a 4 month campaign (to October 2009); or a 9-12 month campaign (April-June 2010). What a horrible thought!
I have to say that I am rubbing my eyes at this thread.
In the last published opinion poll the Tories were at 43%.
In this morning’s Times, Peter Riddell, no less, opines:
“The Gordon Brown bounce is real but it is neither large nor unconditional enough for Labour to entertain realistic hopes that it has turned the corner.”
http://www.timesonline.co.uk/tol/news/politics/article4938770.ece
The debate on here appears completely disconnected from current polling and appears largely to be based upon posters’ assumptions (guesses) as to what might come next - assumptions (guesses) that have no support in previous opinion polls at all. The next few opinion polls will be interesting, to say the least.
72, you were certainly ahead of the bookies. Personally, I’d lay it now (if you can) so you profit either way, but that’s just me.
“The Labour Party simply CANT be allowed to get away with this.” at 65.
Why not, the Tories performed a huge scam from 1979 to Black Wednesday. So far in 11 years we have had nothing like the inflation, unemployment,inequity and downright criminal damage to society seen in those years
Thus far the right wing ranters have not said how they would have reacted had GB brought in more regulation before the credit crunch. OH they would have howled their indigation like dogs on a moor - James Burdett, Runnymede etc
Me, I’m enjoying the sunshine, because the economy is going to get decidely tough in the next 18 months. You dogs will have plenty to howl about
65. you can’t stop idiots “becoming insolvent” without extremely strict oversight!
Obviously:
The thumping recession coming in the next few weeks will be pinned on Brown. Blaming delinquent jimbobs in america is wearing thin.
58.Timothy (likes zebras).
It’s not the spending that got us into the debt disaster. It was the Greenspan put (google it) and the unduly low interest rate policy of central banks. (Chinese disinflation + fact that central banks dont target asset inflation.)
Is Gordon responsible for this? Not really, like everyone else he went along with the consensus, he definitely spent too much post 2004, but in policy error terms its minor in comparison to the monetary policy error. But then again, most booms just happen because the man in charge doesnt know what is really going on. So Gordon does get the blame.
Financial regulation also plays its part - catastrophically bad ideas - BIS II, etc. Gordon was a cheerleader for this. Again as were most other people. But being in charge he again gets the blame. Gordon is a smarmy liar - he was the king of light touch regulation, for him to try to pretend the crisis has nothing to do with him is repellent. Yes, the trigger had its roots in the US. But British banks are in this mess because of UK regulation done on Brown’s watch.
I see the MSM are avoiding the fact that HBOS and Lloyd are the two biggest losers in the market again. Seems that the market are loving the idea of the government merging the two banks and nationalizing them.
73. “the recent polling evidence, though thin, does suggest that Labour has recovered most strongly in Scotland”
Is this myth ever going to stop? We’ve had five Scottish sub-samples since the Brown conference speech, and no fewer than three have had the SNP still ahead. To use the most recent YouGov sub-sample as a reference point, it had Labour at 36% in Scotland - three points down on its 2005 election showing. The UK-wide figure for Labour was 33% - also three points down on 2005. So where is the slightest evidence that Labour’s recovery is any stronger in Scotland, either in relative or absolute terms?
Have we forgotten that we’re slipping into a massive debilitating recession?
If you’re not pricing that in. Markets don’t react, they overreact. And that’s what they’re doing here.
The moment people next go to the supermarket, people will realise that bailing out the rich doesn’t mean anything to them.
I think you’re being led by market overreaction, Mike, and we surely expect more insightful behaviour than that from you.
79. Even if the Bust isn’t too much to do with Brown, he took for credit for the boom, therefore he must take the blame for the bust.
72. Charlie , when your tip proves to be bad advice, you will get plenty of comment.
Although it is quite correct that Labour will close the gap, this can’t be a long-term trend short of an economic miracle to coincide with the rescue package. Recession is coming and people will feel the impact soon enough. Brown can’t avoid that, and in some respects the Labour Party may be sealing its own defeat by not getting rid of him now - it may be too late next year.
Mike, is there any way you can deny this? If not then you should be advising people to get ready to buy Conservative and sell Labour over the next few weeks (months at most).
77. But you can hardly deny the Conservatives left our economy in much better shape than they found it. Labour will do the reverse.
Ken, your high standards are slipping
Banks succeed - well done the Banks
Banks fail - its the regulators fault
The banks aggressively marketed dodgy products using marginal costings, the Banks paid themselves too muchn the Banks, or at least two of them, would have gone bust had not the govt stepped in.
The Banks would have been apoplectic (rather like Tim Congden yesterday if anyone saw that)had Gordon stepped in earlier. Both the banks and the public had to look over the edge into the abyss frankly - for the change any action to succeed
[79] - Ken, I’m not really trying to get my head around who to blame for the bank collapse, though I tend towards blaming the whole lot of them for their deregulation is good consensus.
I am concerned about the British public finances, because I can see that, at some point, it is going to require public spending cuts and tax increases to bring back under control. Although the bank bailout has made things worse, they were already dire, and really they shouldn’t have been.
Year after year Brown predicted that the PBSR was going to fall, and it kept on growing. Where did his sums go wrong?
#80 Taxpayer now sitting on a paper loss of £2.7 billion on the HBOS deal. HBOS are toxic for LLoyds - many LLoyds shareholders more than likely despair of Victor Blank and this deal.
82. the idea of trips to the supermarket illustrating the country in recession has not so far become a reality - it was just spin.
Edmond in Tokyo The idea to invest in the banks
came from Warren Buffet, who went to downing street
before he did this. Warren Buffet did the same thing and put money in Goldman Sachs, as usual Gordon is good at pinching other peoples ideas
86. “But you can hardly deny the Conservatives left our economy in much better shape than they found it.”
That was just the pure luck of the electoral cycle. If they’d been kicked out of office in 1993/94 the economic legacy would have looked rather different.
81. Sub samples are meaningless, but the evidence of the full Scottish samples was that when Labour was in the hole, they were performing much more strongly in Scotland relative to the Tories.
Tory gains in Scotland will be near non-existent, and any Labour recovery will dash SNP hopes of the long-awaited “breakthrough”, due to the highly unstable nature of the Labour-SNP battleground.
Ouch, Mike. A mug you say! No, the Tories are guaranteed winners. This is a Brown bounce, just like last summer. It’s all downhill from here. If I had the money available to risk I would. You shoul.
92. Even in 1993 / 94 the economy was in much better shape than 1977 / 78.
Just think. Nearly 20 years of a Labour Government. Gordon Browns, Ed Balls et all for another 6 to 7 years. Life is so depressing at the moment.
82. To be fair, Mike has
a) to come up with an idea for a new thread every few hours, not always easy
and
b) is saying that there may be quick money to be made on changing opinions in the political spreadbet market (I understand that how it works) i.e. he’s specifically NOT saying that the Tories are now less likely to win an eventual election
95 In terms of its long-run growth potential, certainly.
From the late Forties till the early Eighties, our economy grew more slowly than the OECD average. Since then, our economy has grown more rapidly than the OECD average.
86, certainly you left the economy on an upswing.
After a major recession that was deeper and longer than that of most of our competitor countries, and which you took us in to after you already had the best part of a decade to ’solve’ our economic problems…
Sean Fear
Yes I can argue exactly that. Most of the benefit to the economy in the 80’s and 90’s came because of the additional competition brought about by being in the EU
Economies always lag behind action. Dennis Healey started the improvement (please note there was no need to go to IMF - it was a huge civil service error in calculation. We did not draw on the money).
The Tories sold off assets - you can only do that once - but it gives a nice glow for a while. By the ’90’s you had run out of assets to flog - hence the Railways mess.
We have marginally out performed our rivals - like France, but nothing like that which the rhetoric claims. They will now catch up over the next few years
And yes this is now a far better organised country than 1997 - better hospitals (I am a heavy user so I know), better schools (I am a heavy user so I know). Most of all I hear the local Tory leader reflectikng Labour values, by caring about low cost houses, something he would never have done uneder Mrs T. It is the indirect leadership as much as legislation that counts. Cameron is reflecting a Labour social settlement
Well, Spreadfair implies Broxtowe Labour Hold, so who am I to quibble?
But I do agree with some of the notes of caution.
Contributions of Conservative posters here seem to tacitly concede that Brown and Darling are seen to have done a good job on the financial crisis (some are even willing to say that they *actually* did a good job), and have moved to the next line of defence, that things are gonna be tough for a while and people will react against the Government accordingly.
I’d agree with the first part - even if there is now absolute normality is the financial markets (which is surely far too optimistic), there must have been a lot of damage done in recent weeks, and the PBR is bound to show tax revenue well down. The next year is going to show inflation improving, but other news is bound to be bad.
The second part seems a bit more doubtful. The Tory message is very much ‘we’ll make good times better’ - share the proceeds of growth, tra-la, improve the environment, build new high-speed trains, freeze council tax, slash IHT, etc. Gordon and Alastair don’t do this sort of happy tweeting very naturally, but they absolutely personify the ‘we are the austere stern-faced captains who will see you through difficult times’ theme. If people think that times are tough, they might like to have some cheery types like Osborne promising good stuff, or they might find them implausible.
That said, those spread market changes look a bit sudden to me, and if we don’t have some good polls and hold Glenrothes I can see them jolting back a bit.
93. “they were performing much more strongly in Scotland relative to the Tories.”
Relative to the Tories? If that’s the only definition of success, I think just about every party has been ‘performing much more strongly in Scotland’, and has been doing so consistently for over twenty years.
The issue of the SNP’s potential ‘breakthrough’ depends on your definition. If they got up to twelve seats that would be a historic high, and that wouldn’t be beyond their grasp even if they slipped slightly from their recent giddy heights.
75: ‘The next few opinion polls will be interesting, to say the least.’
Wouldn’t it be a hoot if Labour’s position worsened? Seriously, that’s in no way beyond the realms of possibility. Okay, the BBC’s ‘Operation Save Gord’s Bacon’ has finally got some traction after months of stalling and stuttering, but I feel it’s going to take more than a national overdose Peston’s elongated vowels to persuade the masses than Gordon is anything other than a bit of a twit.
There is always the argument to consider that uncertain times drive voters into the arms of socialism, which could be at play, but it is rare for voters to rally to the flag of a long-governing party when a downturn hits. One can always argue about who is and isn’t to blame in the ebb and flow of semi-global economies, but the standard response of voters is to blame the party in power, especially when there is no ambiguity as to who is/was in charge. In the UK, there is really no ambiguity, so it is tough to see how Labour can really benefit from the crisis that has already happened and that which is yet to come.
59 - If by that you mean Cameron is the best Tory leader we have had - he isn’t. The reason he is doing so well is that he is a superstar compared to Brown. That is what is all important. Hague was unlucky in that he was up against Blair at the peak of his form, before the spin and lies over Iraq and the economy unravelled.
Cameron isn’t as good as Blair, but he is perceived to be because of the ineptitude of his opponent. This is what makes the Tories so strong. They are not reliant on a single personality like Blair.
Blair is the only electable Labour Prime Minister in the last 30 years. In that time the Tories have had a number of leaders who could have been elected when placed against Brown; Thatcher, Major, IDS, Hague, Fox, Davis and now Cameron would all win general elections against Brown. All these people still continue to be involved with the Conservatives; the only experience Labour have is Blair and Brown; Blair has run off and burnt his bridges, Brown is intent on self-destruction. There isn’t a single Labour MP who could win an election for Labour party leader, let alone PM.
So no, the future for the Tories is not based on one election. The future for Labour ends in 2010.
86
The Conservatives certainly changed the economy, by the ‘Thatcher Revolution’ whether they’ve improved it, as Mao said when asked how he thought the French revolution had affected the world ‘It’s to soon to say’
105 - “Thatcher, Major, IDS, Hague, Fox, Davis and now Cameron would all win general elections against Brown.”
Not Hague and Fox. Or even Davis.
104. “There is always the argument to consider that uncertain times drive voters into the arms of socialism”
In that case there’s certainly no danger of a Labour revival.
106- I believe that line is attributed to Chou Enlai, not Mao.
107. “Not Hague and Fox. Or even Davis.”
You missed out IDS! Not sure about Fox, but I think Hague and Davis could defeat Brown. The stock of both is considerably higher now than it once was.
Cameron: “When the house is on fire it’s all hands to the hose”
12:30 | 14/10/2008
David Cameron, Conservative leader
Jeremy Vine Show, Radio 2
Mr Cameron said that he believed the bank rescue plan was “right for Britain”, and admitted that economic mistakes have been made in the 1980s and the “noughties”.
“The mistake in the eighties was turning on the tap called money and leaving it running too long. The mistake in the noughties was turning on the tap called borrowing and leaving it on too long.”
Asked whether the banking rescue plan was right he said, “I think it is right for Britain. It does seem as if some important steps have been taken forward. When the house is on fire it’s all hands to the hose.”
Asked whether he could have a significant role in solutions to the crisis he said, “The financial crisis is still a crisis. I don’t think it leaves us with nothing to say. I think I do have a role in helping to explain why banks do play an important part in a free enterprise economy.”
He criticised Gordon Brown saying, “He took the Bank of England out of the scene of regulating the debt in the economy. That was a mistake.
“Over the past decade the regulators haven’t regulated properly, the government hasn’t governed properly. There are lessons for all of us to learn. I will be coming forward with our own proposals.
“Even on a good day Gordon Brown, perhaps under torture, would admit mistakes have been made.”
He added that he had “never been dazzled by the City”.
103 Robusticus “I feel it’s going to take more than a national overdose Peston’s elongated vowels to persuade the masses than Gordon is anything other than a bit of a twit.”
I find myself in the unusual position of defending the BBC here, because Robert Peston said today:
“Soon we’ll have the full set of Northern Rock, Bradford & Bingley and HBOS - which will be seen by many as confirmation that the near-catastrophic failure of macro-economic management by Bank of England and Treasury over the past few years was to allow house prices to rise and rise and rise and rise and rise.”
http://www.bbc.co.uk/blogs/thereporters/robertpeston/
109
You may be right! Those Chinese they all ……. arrr perhaps not.
105. not IDS or Hague! what have you been smoking?
104. despite all the comparisons people love to make on this site and elsewhere with history, there is actually minimal evidence available of what people vote for when a recession occurs with a long-governing party in power. and what evidence there is is decidedly mixed.
103 - I do not expect Labour’s position to worsen. There are, however, a lot of people out there who are really angry with what the Government has done though, as that well-known right-wing headbanger John Rentoul has noted:
http://www.independent.co.uk/opinion/commentators/john-rentoul/john-rentoul-the-week-gordon-met-his-erm-958582.html
“I expect that the Tories’ focus groups reflect the views of the members of the public buttonholed by TV cameras on the street last week: they blame the Government and are especially furious that they, as taxpayers, should be asked to bail out the greedy bankers who were allowed to break the economy.”
There is every possibility of a continuation of the trend of Tory consolidation and a return from minor parties to Labour.
Whatever else happens, I think time for Dave to move Osborne to party sec, and make Ken Clarke shadow chancellor.
Such a move would negate moves back to Labour’s being ‘only’ ten points behind or so, before the recession really begins to bite and Gordon starts raising taxes sharply.
It doesn’t take a genius to solve a problem by throwing 40 billion at it. I daresay if I gave Leicester City £40 billion they would eventually be comfortably mid-table in the premiership.
116. Ken has not sufficiently recanted his love for moules et frites for that to happen.
110 - sorry, I have a mental blackout when I see the letters IDS together
I’ve no doubt that Hague (especially), Fox and IDS would become big hitters in government, but there’s nothing to make me think that any of them could win power in the first place.
116. “Whatever else happens, I think time for Dave to move Osborne to party sec, and make Ken Clarke shadow chancellor.”
Clarke has always said he’d refuse any front-bench job in opposition other than leader, hasn’t he?
Blimey, something must be up, theres a lot of tense Tories on here today.
116. some of Clarke’s views are too risky - there is still a big european elephant in the Tory room.
http://www.realclearpolitics.com/epolls/2008/president/us/general_election_mccain_vs_obama-225.html
The latest Battleground poll has Obama 13 points up
Obama 53 (+2) McCain 40 (-3)
The trackers now give Obama leads from 2 - 13 points.
@118:
Normally, Kenneth’s rabid Europhilia would be a problem for me too. These, however, are interesting times.
And seeing him on QT last week just reminded be once again that he could dance under water and not get wet.
Given the current climate, it’s a bloody tragedy that we’re wasting the greatest living Tory Chancellor’s talents.
re 82. “I think you’re being led by market overreaction, Mike, and we surely expect more insightful behaviour than that from you.”
I think the market has some way to go. All it needs is one poll to put the general election back into hung parliament territory and we we will be heading towards 330 seats.
Given this last week I think that there’s a good chance that Labour being only 7-8% behind is possible.
I got the hell out of my positions on Sunday and was proved totally right. I’m now buying Labour at 239 seats and selling the Tories at 340 seats.
117 I doubt it… Lol
DOW & FTSE crashing again - The US dont like SuperGordons ‘plan’
Sky was reporting earlier that America is far from pleased with the UK bailout model and screams of socialism are coming from all sectors.
121. years of telling themselves there would eventually be a recession, and it would benefit them, have not borne fruit.
imagine yourself spending years hoping the whole country would go t*ts up for your benefit, and then the whole country goes t*ts up, and you lose out.
100 Healey can certainly be given credit for reining in public spending.
As for trying to argue that things like ending exchange controls, ending prices and incomes policies, curbing inflation, cutting marginal rates of tax, trade union reforms, privatisation etc. etc. were somehow irrelevant to the improvement in our economic performance, relative to other wealthy nations - well, it’s a bit like trying to argue that dinosaurs roamed the Earth 4,000 years ago.
122, hahaha. Didn’t Labour think that the Tories would split over Lisbon? Instead, Labour had a small split and the Lib Dems engaged in pathetic contortionism.
87 John Wheatley - I dont understand your point about banks. Bad regulation and the rescue are unconnected. Here is a bit from the last post from the last thread
… The credit goes to Brown and Darling for doing it. For those who ask if Brown pushed prices down of the banks or didnt act quickly enough, this is nonsense. If Darling and Brown had dumped £50 billion in the banks 2 weeks ago, the uproar would have been much larger. It is only because 1) The UK has a powerful executive govt with a legislative majority 2) The banks were perceived to be on the verge of failure, that criticism has been muted and that this was achievable. …
Yes, the damage would have been far less if the UK government had put together its package a month ago when the crisis hadnt really blown up. Just after Lehman. But the point is - it would have been politically unacceptable.
Brown though was in charge during the Age of Irresponsibility. He must shoulder the blame for having embraced market pricing of risk, the ignoring of liquidity risk and counter party risk. It’s his fault because he is the peron at whose desk the buck stops. And he was king of light touch regulation. Now of course he pretends to be King of strong regulation, but really he is the fool who embraced light touch regulation.
by Ken October 14th, 2008 at 2:29 pm
Illusory bank profits of prior years = bad regulation = banks thinking they were successful = Brown crowing about City.
Brown rescuing banks = good, but one cannot forget the above bit.
121. wander over to conhome. They’re in full on “heads must roll” mode in the comments.
Anyway Mike might even start a new thread based on this?
http://londonersdiary.standard.co.uk/
That should get us all jumping!
[116] - Ken doesn’t want to be shadow chancellor, he wants to be leader or nowt.
Last weeks council byelections showed no evidence whatsoever of any Labour recovery in support . There were 4 where we have a direct comparison with support in 2005 and now as there was a previous election on GE day 2005
Kent CC Herne Bay
2005 Lab 3207 23.1%
2007 Lab 458 5.3%
now. Lab 537 10.4% The increase from 2007 at least partly due to the absence last week of the Herne Bay Independents
Bristol UA St Georges West
2005 Lab 2218 46.9%
2007 Lab 1118 38.2%
now. Lab 816 30.1%
Cheshire Knutsford
2005 Lab 1478 21.6%
2008 May 769 18.2%
2008 now 342 12.2%
Isle Of Wight Mount Joy
2005 Lab 221 18.9%
now, Lab 38 6.0%
125. Ken will never be trusted with any front bench position until he publicly wipes his fat @rse on the EU flag while holding a framed front page of the 1st November 1990 issue of the The Sun.
New SUSA polls for Ohio and Pennsylvania
Ohio - Obama 50 (+2) McCain 49 (-4) Changes on 28-29/9
Pennsylvania - Obama 55 (nc) McCain 40 (nc) Changes on 5-6/10
http://www.surveyusa.com/client/PollReport.aspx?g=f459ed4f-3465-434c-9116-8dc250b1fbc0
http://www.surveyusa.com/client/PollReport.aspx?g=a98f6f52-fb6d-4800-9f4e-d55dcb6589f2
124 - would be too easy to throw back “same old Tories” if KC got a high profile opposition role. Would be better served right now as an advisor to Osbourne, and a higher profile role back in government if it happened.
Always wonder what would have happened had Clarke become Tory leader in 1997 or (more likely) 2001
“I think the markets are over-reacting to Brown and Labour’s performance.”
I think people misunderstand markets. The stockmarket is not a barometer of the nation’s economic health. It does not necessarily rise when the economic outlook is good, and fall when it is bad. On the contrary, it rises when stocks look attractively valued relative to their prospects and to alternative investments.
So, right now, the stockmarket may be rising because valuations are - on some measures - at multi-decade lows, despite the fact that investors are well aware that a multi-year recession is on the cards.
Or, stockmarkets could be on the up because yields on government bonds (despite all the concerns on this board about increased government borrowing) have fallen sharply in the last year, and no longer look attractive relative to divided yields. (Royal Dutch Shell pays 6% and has a rising dividend, while 3 year government bonds pay you only a smidgen over 4%.)
Personal view - as a fund manager - is that last week ‘the markets’ were very concerned that we could see a wholesale collapse of the financial system. This would be a bad thing. If, on the other hand, we merely see a multi-year recession and reduced credit, well that wouldn’t be good, but it wouldn’t be the end of the world.
Just my 2c
116 “Whatever else happens, I think time for Dave to move Osb