those trapped in the past are the command economy junkies. Look at your proposals - to regulate, tax, move little pieces of money around and solve precisely nothing. If you want to have people with more to live on cut back the taxes and regulation and let them keep more of their own money; change the tax codes to allow companies to earn more and employ more people.; quit deluding yourself that every time you dabble you make things better.
So, how ARE Osborne's funding for lending /FirstBuy/HomeBuy schemes doing?
A bit early to tell given that the equity loan scheme only came into effect on April 1st.
But here is the industry insider view:
Housing associations operating as help to buy agents are recruiting extra staff to meet demand for the new scheme aimed at helping people get on, or move up, the housing ladder.
Agents have reported a spike in interest for the product in the first month - in some cases double its predecessor, firstbuy.
Under the equity loan scheme, which came into effect on 1 April, the government will lend a buyer up to 20 per cent of the value of a new build home if they have a minimum 5 per cent deposit. It replaced firstbuy and is available to all, not just first-time, buyers.
Moat, the help to buy agent in Essex, Kent, Sussex and south London, and Catalyst Housing, which covers Oxfordshire, Buckinghamshire, Berkshire and Surrey, are recruiting extra people owing to the scheme’s popularity.
Orbit, the largest help to buy agent, which operates across the west midlands, Norfolk, Suffolk, Bedfordshire and Cambridgeshire, is expanding its 30-person team by 10 per cent and is ‘quite prepared’ to add more staff if necessary.
It received just under 250 help to buy equity loan reservations in the first couple of weeks of April - more than the 206 firstbuy reservations it received during the whole of March.
Orbit anticipates 3,000 help to buy completions this year, compared with 1,500 completions for homebuy and firstbuy products last year.
Margaret Snook, head of Orbit’s homebuy agency, said: ‘We are getting about double the amount of cases we would have expected at a busy period for firstbuy, so it does really seem to be taking [off].’
So I would say the early signs give cause for Osborne to be "cautiously optimistic".
Moving taxation from income to property should also be in the mix. The Tories are stuck in the past on that one too.
Yes if that's what being proposed. However so far Ed's proposal isn't to move the mix, just to up taxes.
Ed isn't leading on this, he's allowing the Lib Dems to make the moves on property taxes. Miliband will focus on living wage/housebuilding thats where the big benefit savings are.
Except they won't be. His proposals are to take an over regulated sector and add more regulation.
The UK not only needs more houses, but needs to let inflation reduce the value of the current stock until it falls into affordability. All the parties are shit scared of tackling this nettle.
And Mumps can swell the testes terribly,although temporarily.
I got a long telephone call moaning about a German customer who was reluctant to pay his Euro bills which diverted me from following up on your pitiful knowledge of school matrons.
I can tell you tim that if Matron decides to inject you don't argue.
With Matron acting in loco parentis and parents paying a thousand pounds a week to keep Johnny at school the options for pupil or parent saying "No!" are very limited.
"Berlusconi is saying he'll sign up if the property tax is repealed: Letta wants it "tweaked". No deal and there will be another General Election with Berlusconi riding high in the polls."
As far as I can see Berlusconi is the one who wants to avoid an election. I don't really understand why, but from the word go in February his fixation has been to secure the junior spot in a grand coalition, rather than return the polls.
Perhaps it's because a new election would be an all-or-nothing proposition for him - he might win, but if he lost the consequences for him in his legal battles could be devastating.
By the way, congratulations to Malcolm for expertly dealing with all the customary drivel about Scotland from AlanBrooke and Carlotta earlier in this thread. It really is getting tedious now.
However, it seems to be going down well on cif. Typical comments:
"Cameron and Osborne in one photograph...It's incredible how much ineptitude and absolute revulsion can be captured in one picture...I'm surprised the lens didn't throw up, or get blinded by the sun reflected off Shiny-face's head."
"Thatcher's spawn - smug, self-satisfied with an overinflated estimation of their worth and talent and arrogant sense of entitlement - wilful blindness to the fact they are in positions of power through their connections and the skewed life chances of this class-riddled country rather than ability, simultaneusly blaming the poor and vulnerable for their own predicament. Everyone hates them, even natural Tory voters who are flocking to UKIP in their droves"
those trapped in the past are the command economy junkies. Look at your proposals - to regulate, tax, move little pieces of money around and solve precisely nothing. If you want to have people with more to live on cut back the taxes and regulation and let them keep more of their own money; change the tax codes to allow companies to earn more and employ more people.; quit deluding yourself that every time you dabble you make things better.
So, how ARE Osborne's funding for lending /FirstBuy/HomeBuy schemes doing?
A bit early to tell given that the equity loan scheme only came into effect on April 1st.
But here is the industry insider view:
Housing associations operating as help to buy agents are recruiting extra staff to meet demand for the new scheme aimed at helping people get on, or move up, the housing ladder.
Agents have reported a spike in interest for the product in the first month - in some cases double its predecessor, firstbuy.
Under the equity loan scheme, which came into effect on 1 April, the government will lend a buyer up to 20 per cent of the value of a new build home if they have a minimum 5 per cent deposit. It replaced firstbuy and is available to all, not just first-time, buyers.
Moat, the help to buy agent in Essex, Kent, Sussex and south London, and Catalyst Housing, which covers Oxfordshire, Buckinghamshire, Berkshire and Surrey, are recruiting extra people owing to the scheme’s popularity.
Orbit, the largest help to buy agent, which operates across the west midlands, Norfolk, Suffolk, Bedfordshire and Cambridgeshire, is expanding its 30-person team by 10 per cent and is ‘quite prepared’ to add more staff if necessary.
It received just under 250 help to buy equity loan reservations in the first couple of weeks of April - more than the 206 firstbuy reservations it received during the whole of March.
Orbit anticipates 3,000 help to buy completions this year, compared with 1,500 completions for homebuy and firstbuy products last year.
Margaret Snook, head of Orbit’s homebuy agency, said: ‘We are getting about double the amount of cases we would have expected at a busy period for firstbuy, so it does really seem to be taking [off].’
So I would say the early signs give cause for Osborne to be "cautiously optimistic".
Why ? Why is house price inflation good ? If the money was going into something productive then the slack in the economy would pick up, wages would rise and people would buy houses. Once again this is just a mindless gimmick from Gordon's Mini-me which hopes to plaster over the failure to reform the banking sector.
"There is a ritual, and even a specialised vocabulary, for midterm local elections in the UK. In advance, they are always a “crucial test” of the government’s popularity, and the opposition’s ability to turn poll ratings into votes. Next comes expectation management, when incumbent parties brief that they will lose practically all their councillors, and the challengers claim they expect to gain hardly any, in the forlorn hope of bamboozling political reporters.
Then comes the count, always a “grim night” for the governing party on which it loses “swaths” of seats in “former strongholds”, despite claims that its vote is “holding up well” in much of the country – though clearly less so in places that are “difficult territory for us”. Finally comes the “aftermath”, in which the losing party claims to have listened and “learnt lessons”, while privately holding an “inquest” into its “disastrous performance”.
Moving taxation from income to property should also be in the mix. The Tories are stuck in the past on that one too.
Not unreasonable per se but how about reducing them on wealth creation and saving. It's too little saving, especially long term saving, and too much splurging that's landed us in the smelly stuff in the first place.
those trapped in the past are the command economy junkies. Look at your proposals - to regulate, tax, move little pieces of money around and solve precisely nothing. If you want to have people with more to live on cut back the taxes and regulation and let them keep more of their own money; change the tax codes to allow companies to earn more and employ more people.; quit deluding yourself that every time you dabble you make things better.
So, how ARE Osborne's funding for lending /FirstBuy/HomeBuy schemes doing?
A bit early to tell given that the equity loan scheme only came into effect on April 1st.
But here is the industry insider view:
Housing associations operating as help to buy agents are recruiting extra staff to meet demand for the new scheme aimed at helping people get on, or move up, the housing ladder.
Agents have reported a spike in interest for the product in the first month - in some cases double its predecessor, firstbuy.
Under the equity loan scheme, which came into effect on 1 April, the government will lend a buyer up to 20 per cent of the value of a new build home if they have a minimum 5 per cent deposit. It replaced firstbuy and is available to all, not just first-time, buyers.
Moat, the help to buy agent in Essex, Kent, Sussex and south London, and Catalyst Housing, which covers Oxfordshire, Buckinghamshire, Berkshire and Surrey, are recruiting extra people owing to the scheme’s popularity.
Orbit, the largest help to buy agent, which operates across the west midlands, Norfolk, Suffolk, Bedfordshire and Cambridgeshire, is expanding its 30-person team by 10 per cent and is ‘quite prepared’ to add more staff if necessary.
It received just under 250 help to buy equity loan reservations in the first couple of weeks of April - more than the 206 firstbuy reservations it received during the whole of March.
Orbit anticipates 3,000 help to buy completions this year, compared with 1,500 completions for homebuy and firstbuy products last year.
Margaret Snook, head of Orbit’s homebuy agency, said: ‘We are getting about double the amount of cases we would have expected at a busy period for firstbuy, so it does really seem to be taking [off].’
So I would say the early signs give cause for Osborne to be "cautiously optimistic".
Why ? Why is house price inflation good ? If the money was going into something productive then the slack in the economy would pick up, wages would rise and people would buy houses. Once again this is just a mindless gimmick from Gordon's Mini-me which hopes to plaster over the failure to reform the banking sector.
It is indeed counter-intuitive, Mr. Brooke.
But a stable property market and unimpaired mortgage books are preconditions for reforming the banking sector and getting credit flowing through bank distribution systems.
The large mortgage books held by the 'high street' banks are the main reason for the BoE (through the PRA) requiring the banks to raise an additional £25 billion of capital to protect depositors and taxpayers from further systemic collapse in the financial markets.
The options to raise this additional capital are very limited. Until the banks are restructured they will not be able to attract capital from the financial markets. The government (i.e. the taxpayer) is in no position to bung them £25 bn in extra capital. So the only feasible solution is for the BoE to buy chunks of mortgage books off the banks balance sheets, thereby reducing increased capital requirements, increasing funds available for lending, improving share value and ROE, enabling both the sale of bank shares by the government at good value and the ability of the banks to attract market funds.
Mortgages sitting on the central government books (following transfer from the BoE) could then be either securitised and exchanged for 'cash now' on the international financial markets or run down to term at a profit by the government (as is happening today with the NR & B&B books). As the central government is not a licensed deposit taking institution the additional capital requirements will not be imposed on the subsidiary companies holding the mortgage books (e,g, UK Asset Resolution).
For all the above to work requires house prices to remain stable. This does not mean that they need to rise in real terms like the boom years of the noughties just that they need to hold their nominal values and not crash by near 10% a year as is happening on the continent.
The equity loan and guaranteed schemes launched by Osborne are designed to hold up demand and prices thereby creating favourable conditions for buyers to commit and constructors to construct.
As always this is a balancing act rather than a choice of extremes. The Osborne measures are stimulating and kickstarting what should be an organic process. There is an exit strategy built in through the limited terms of the schemes and other monetary tweaks can be deplpyed in the unlikely event that we see the housing market overheat.
those trapped in the past are the command economy junkies. Look at your proposals - to regulate, tax, move little pieces of money around and solve precisely nothing. If you want to have people with more to live on cut back the taxes and regulation and let them keep more of their own money; change the tax codes to allow companies to earn more and employ more people.; quit deluding yourself that every time you dabble you make things better.
So, how ARE Osborne's funding for lending /FirstBuy/HomeBuy schemes doing?
A bit early to tell given that the equity loan scheme only came into effect on April 1st.
But here is the industry insider view:
Housing associations operating as help to buy agents are recruiting extra staff to meet demand for the new scheme aimed at helping people get on, or move up, the housing ladder.
Agents have reported a spike in interest for the product in the first month - in some cases double its predecessor, firstbuy.
Under the equity loan scheme, which came into effect on 1 April, the government will lend a buyer up to 20 per cent of the value of a new build home if they have a minimum 5 per cent deposit. It replaced firstbuy and is available to all, not just first-time, buyers.
Moat, the help to buy agent in Essex, Kent, Sussex and south London, and Catalyst Housing, which covers Oxfordshire, Buckinghamshire, Berkshire and Surrey, are recruiting extra people owing to the scheme’s popularity.
Orbit, the largest help to buy agent, which operates across the west midlands, Norfolk, Suffolk, Bedfordshire and Cambridgeshire, is expanding its 30-person team by 10 per cent and is ‘quite prepared’ to add more staff if necessary.
It received just under 250 help to buy equity loan reservations in the first couple of weeks of April - more than the 206 firstbuy reservations it received during the whole of March.
Orbit anticipates 3,000 help to buy completions this year, compared with 1,500 completions for homebuy and firstbuy products last year.
Margaret Snook, head of Orbit’s homebuy agency, said: ‘We are getting about double the amount of cases we would have expected at a busy period for firstbuy, so it does really seem to be taking [off].’
So I would say the early signs give cause for Osborne to be "cautiously optimistic".
Why ? Why is house price inflation good ? If the money was going into something productive then the slack in the economy would pick up, wages would rise and people would buy houses. Once again this is just a mindless gimmick from Gordon's Mini-me which hopes to plaster over the failure to reform the banking sector.
The target of these schemes is to stimulate demand for new built housing. If successful the total stock of housing will be increased which is a good and necessary thing in many parts of the country. It will also stimulate construction which is currently about 18% off peak, employment and consumer demand. Whilst I think we need to be careful about stimulating consumer demand whilst still running a large trade deficit these are on balance also good things.
If the money simply causes more asset inflation by increasing the number of potential buyers in the market without increasing the supply the schemes will have been a failure but the very preliminary indications are that the policy will have some effect in the desired areas.
I agree with you that the need for such schemes is caused by the failure to bite the bullet on the banks and restore credit facilities to the economy. It would have been better to have done this 2 years ago but any attempts to sort the banks out now will take at least a couple of years to increase credit. If these schemes fill the gap so be it, as long as they do not become an alternative to addressing the real problem.
those trapped in the past are the command economy junkies. Look at your proposals - to regulate, tax, move little pieces of money around and solve precisely nothing. If you want to have people with more to live on cut back the taxes and regulation and let them keep more of their own money; change the tax codes to allow companies to earn more and employ more people.; quit deluding yourself that every time you dabble you make things better.
So, how ARE Osborne's funding for lending /FirstBuy/HomeBuy schemes doing?
A bit early to tell given that the equity loan scheme only came into effect on April 1st.
But here is the industry insider view:
Housing associations operating as help to buy agents are recruiting extra staff to meet demand for the new scheme aimed at helping people get on, or move up, the housing ladder.
Agents have reported a spike in interest for the product in the first month - in some cases double its predecessor, firstbuy.
Under the equity loan scheme, which came into effect on 1 April, the government will lend a buyer up to 20 per cent of the value of a new build home if they have a minimum 5 per cent deposit. It replaced firstbuy and is available to all, not just first-time, buyers.
Moat, the help to buy agent in Essex, Kent, Sussex and south London, and Catalyst Housing, which covers Oxfordshire, Buckinghamshire, Berkshire and Surrey, are recruiting extra people owing to the scheme’s popularity.
Orbit, the largest help to buy agent, which operates across the west midlands, Norfolk, Suffolk, Bedfordshire and Cambridgeshire, is expanding its 30-person team by 10 per cent and is ‘quite prepared’ to add more staff if necessary.
It received just under 250 help to buy equity loan reservations in the first couple of weeks of April - more than the 206 firstbuy reservations it received during the whole of March.
Orbit anticipates 3,000 help to buy completions this year, compared with 1,500 completions for homebuy and firstbuy products last year.
Margaret Snook, head of Orbit’s homebuy agency, said: ‘We are getting about double the amount of cases we would have expected at a busy period for firstbuy, so it does really seem to be taking [off].’
So I would say the early signs give cause for Osborne to be "cautiously optimistic".
Why ? Why is house price inflation good ? If the money was going into something productive then the slack in the economy would pick up, wages would rise and people would buy houses. Once again this is just a mindless gimmick from Gordon's Mini-me which hopes to plaster over the failure to reform the banking sector.
It is indeed counter-intuitive, Mr. Brooke.
But a stable property market and unimpaired mortgage books are preconditions for reforming the banking sector and getting credit flowing through bank distribution systems.
The large mortgage books held by the 'high street' banks are the main reason for the BoE (through the PRA) requiring the banks to raise an additional £25 billion of capital to protect depositors and taxpayers from further systemic collapse in the financial markets.
The options to raise this additional capital is very limited. Until the banks are restructured they will not be able to attract capital from the financial markets. The government (i.e. the taxpayer) is in no position to bung them £25 bn in extra capital. So the only feasible solution is for the BoE to buy chunks of mortgage books off the banks balance sheets, thereby reducing increased capital requirements, increasing funds available for lending, improving share value and ROE, enabling both the sale of bank shares by the government at good value and the ability of the banks to attract market funds.
Mortgages sitting on the central government books (following transfer from the BoE) could then be either securitised and exchanged for cash now on the international financial markets or run down to term at a profit by the government (as is happening today with the NR & B&B books). As the central government is not a licensed deposit taking institution the additional capital requirements will not be imposed on the subsidiary companies holding the mortgage books (e,g, UK Asset Resolution).
For all the above to work requires house prices to remain stable. This does not mean that they need to rise in real terms like the boom years of the noughties just that they need to hold their nominal values and not crash by near 10% a year as is happening on the continent.
The equity loan and guaranteed schemes launched by Osborne are designed to hold up demand and prices thereby creating favourable conditions for buyers to commit and constructors to construct.
As always this is a balancing act rather than a choice of extremes. The Osborne measures are stimulating and kickstarting what should be an organic process. There is an exit strategy built in through the limited terms of the schemes and other monetary tweaks can be deplpyed in the unlikely event that we see the housing market overheat.
It is all sensible and sound economics.
No Mr Pole, not so. The banks need to have their balance sheets cleaned up and then be recapitalised. Preferably RBS and HBOS will be broken up into numerous smaller banks which reengender competition on the high st. Osborne lacks the courage to do this, preferring instead to salami slice the loss over several years instead of taking the hit and letting the economy get moving. His approach ultimately will cost more.
Wood argues that for all the criticism levelled at the Eurozone and particularly Spain, Italy, Portugal and Greece, they've actually gone through the austerity process while Britain, for all its talk, gloating and pontification, has done virtually nothing and has barely started.
It's a powerful argument slating Osborne and the Coalition for failing to carry through the promises of 2010 but also challenging the two Eds by saying that in effect the Coalition, from 2010-15 has more or less pursued the same economic policy that a re-elected Labour Government would have followed from 2010.
Stodge, sorry for the long reply but some scribblings I made last night but never posted seem very relevant in response the Berenberg fellow much loved as a dial-a-quote by Bloomberg as well as City AM. I shall post in sections to make the ramblings more digestible
In July 2010, Jürgen Stark, the chief economist of the ECB announced: “The worst is over … the IMF is underestimating the strength of the economy in Europe.” He was wrong. The Eurozone has since suffered continual episodes of crisis each punctuated by the great and good - Lagarde, Monti, Hollande and Schäuble - asserting the worst, this time, is over.
Recently the seas have been relatively calm. Consensus thinking has been that Merkel will keep the EU ship steady in the run-up to her re-election; that France needs time to survive the erratic navigation of Hollande; that Italy will patch together a short term government but remiain in the doldrums; and that Spanish banks will just, only just, avoid going under.
But now the markets and international economic agencies are beginning to have doubts.
All of the above depends on Germany, the ECB, the IMF and international bond investors being prepared to pump stimulus into the crisis countries. But over the past two weeks there have been worrying noises coming from Germany and the other key players.
Germany
First, Merkel intervened to counter market speculation that the ECB would cut its interest rates from 0.75%. At a banking conference she made the following comments:
"The ECB is obviously in a difficult position. For Germany it would actually have to raise rates slightly at the moment, but for other countries it would have to do even more for more liquidity to be made available and especially for liquidity to reach corporate financing."
Then Jens Weidmann, the head of Germany's Bundesbank, stated his opposition to further expansion of the ECB's Outright Monetary Transactions (OMT) programme, the equivalent of BoE and Fed Quantitative Easing. Weidmann was quickly supported by Philipp Rösler, the German Economy Minister, who explained that Germany feared it would dampen EU Member states' willingness to implement fiscal reforms.
Yesterday further German discomfort was revealed when Handelsblatt printed a leaked document sent by Weidmann to the German Constitutional Court, which is due to rule on the legality of the European bailout fund (ESM) and OMT programme in June. In the document, it was revealed that Weidmann had rejected the offer of bond purchases by the ECB and that he was warning that the purchase of stressed countries' sovereign debt could "compromise the independence of the central bank".
And as if that wasn't enough, Jörg Asmussen, Germany's Board Member on the ECB repeated comments made earlier in the week that cuts in interest rates were not being passed onto the periphery where they are most needed and that keeping rates too low for too long could eventually lead to distortions adding for good measure the statement that “monetary policy is not an all-purpose weapon for any kind of economic illness".
So no one should be left in any doubt that Germany is continuing to take a hard line on Eurozone fiscal consolidation and is strongly resisting the provision of further stimulus through interest rate reduction and additional QE. The message to the crisis countries is clear: delay fiscal targets if you wish but do not expect any extraordinary monetary stimulus from the ECB.
Germany is not however deaf to the pleas and needs of the crisis countries. Wolfgang Schäuble, the CDU Foreign Minister, this week offered Spain a bilateral investment deal with Germany, pre-empting EU Commission action. Announcing the offer in Berlin, Schäuble said: “I’ll suggest, after having spoken with businesses and the banks, let’s not wait for the commission. Let’s have a bilateral program right away. How can we in Germany promote investment and financing of small and medium enterprises in Spain in a partnership to advance more quickly?”.
Schäuble was also careful not to criticise the Spanish government's decision to delay meeting its fiscal targets, saying this was a matter for the EU commission rather than Germany, but otherwise giving Spain comfort, saying: “If the economy deteriorates, you don’t reinforce the economic downturn through deeper cuts”.
So it seems Germany is prepared to give time to Spain (and the others) and to invest directly in its economy, but it will not support plans to increase multilateral lending.
Some of the fiercest criticism of George Osborne can be found (surprisingly) in City AM which portrays itself as the voice of the City of London.
In last Monday's edition, Robert Wood, chief UK economist at Berenberg Bank, pointed out that Osborne's policy was a fusion of the much-vaunted Plans A and B. He pointed out that not only will public sector borrowing NOT fall between 2011-14 on current performance, it will still be £108 billion in 2014-15. Public debt will still be 100.8% of GDP in 2015.
Wood argues that for all the criticism levelled at the Eurozone and particularly Spain, Italy, Portugal and Greece, they've actually gone through the austerity process while Britain, for all its talk, gloating and pontification, has done virtually nothing and has barely started.
It's a powerful argument slating Osborne and the Coalition for failing to carry through the promises of 2010 but also challenging the two Eds by saying that in effect the Coalition, from 2010-15 has more or less pursued the same economic policy that a re-elected Labour Government would have followed from 2010.
At the same conference in London at which Asmussen laid down Germany's hard line, David Lipton, the Obama appointed Deputy Managing Director of the IMF, argued a contrary position:
“There is ... a risk that Europe could fall into stagnation, which would have very serious implications for households, companies, banks and other bedrock institutions,” David Lipton told the conference.
“To decisively avoid that dangerous downside, policymakers must act now to strengthen the prospects for growth,” he said.
Commentators have been pointing to a split within the IMF between the doves (the Obama supporting Krugmanites) and the hawks (the Rogoffites lead by Lagarde).
This of course explains the media speculation about the IMF "criticising" Osborne and the UK last week. As Christine Lagarde delivered the official IMF line in support of Osborne and the UK from the IMF conference platform, Olivier Blanchard and David Lipton gave side interviews to UK journalists to promote their minority cause. Remember we only heard anodyne on record statements, not the conspiratorial off record directions.
The doves were clearly expecting a poor GDP Q1 growth figure from the UK and were seeing the opportunity to use it to advance the cause of monetary stimulus. But the UK turning in 0.3% growth - unexpected and welcome in the European context - was enough to strengthen the Merkel-Cameron-Lagarde austerity line, at least for the time being. Germany also, against its own economist's predictions, very marginally upgraded its annual growth forecast from 0.4% to 0.5%.
As a result, the IMF are now far less likely to overtly criticise the performance of the UK economy in their upcoming visit and report. The task of those within the IMF arguing for less austerity and more spending has been made more difficult.
Bond investors
Perhaps the most surprising repositioning of the week came from the long reigning king of bond investors. Bill Gross, the founder of PIMCO, the company managing over 3 trillion US dollars of investment funds, argued that “The U.K. and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in ythe short term, is the way to produce real growth. It is not, You’ve got to spend money.” And yet at the same time Gross was saying this, his London bond investment fund, under Ed Balls's brother Andrew, announced that PIMCO was selling Italian and Spanish Eurobonds in order to balance PIMCO's portfolio risk.
The endgame
So it seems that everyone agrees that more money needs to be spent in Europe to avoid catastrophe but no one is prepared to dip into their own pockets to provide it. Not Germany, not the ECB and not the international bond investors. Even the doves in the IMF are left isolated.
Meanwhile Spain struggles with over 6 million unemployed (27.2%); is into its seventh quarter of continuous recession; has rising debt of over 95% of GDP; expects continued contraction of employment and GDP throughout 2013; and, has reached the political limits of imposing austerity. Rajoy, Spain's PM has asked the EU commission for two years relief on their agreed fiscal consolidation targets. This will no doubt be granted but where is the growth coming from to even stabilise the Spanish economy during their fiscal holiday?
If Germany and the UK are struggling to achieve organic growth in the current climate, what chance do the weaker peripheral Eurozone countries have? Germany may have offered to invest in a few tapas bars and buy a few empty seaside villas but far, far more investment is needed to avert total collapse.
But no one seems prepared to lend. There is no money left. Or more correctly, there is no confidence left that money lent will be returned.
And that is why we should all be regarding the protestations of a Eurozone recovery with the deepest suspicion. It is looking increasingly likely that 2013 may well be the year in which the Eurozone finally implodes rather than recovers.
But then, "The worst is not so long as we can say this is the worst [is over]."
Are the SNP going to be forced to commit to supporting the party with most votes or seats? Thought not - they are Labour-lite.
Or Tartan Tories, mad socialists, Fascists etc. Such a ruch cornucopia to pick from.
The only way the SNP would get 30+ seats at Westminster is if there's a Yes vote, so their future relevance to any coalition would be somewhat limited. Still, it would be entertaining to see Labour holding their noses and emphasising how much they and the SNP have always had in common.
I always liked the nickname The Cameron Highlanders for the SNP.
"Berlusconi is saying he'll sign up if the property tax is repealed: Letta wants it "tweaked". No deal and there will be another General Election with Berlusconi riding high in the polls."
As far as I can see Berlusconi is the one who wants to avoid an election. I don't really understand why, but from the word go in February his fixation has been to secure the junior spot in a grand coalition, rather than return the polls.
Perhaps it's because a new election would be an all-or-nothing proposition for him - he might win, but if he lost the consequences for him in his legal battles could be devastating.
By the way, congratulations to Malcolm for expertly dealing with all the customary drivel about Scotland from AlanBrooke and Carlotta earlier in this thread. It really is getting tedious now.
James, I think it is just a question of timing the strike. There doesn't appear to be much appetite in Italy for another election (or at least few believe it would deliver a more stable political position than exists today just a change of faces).
Of course, Silvio has other reasons for wanting the immunity from criminal prosecution that comes from office, but I guess he doesn't want to be seen as too eager on this.
i'm busy watching Quincy MD - what a great show that was. And WAAAAY ahead of its time given the plethora of forensic autopsy shows on TV today... I can think of least 5 running now :^ O
@Stodge: Thus, for all David's earnest rhetoric about how much of a problem all this is for the Liberal Democrats, it is potentially a much thornier problem for David Cameron and Ed Milliband (or whoever leads the Conservative and Labour parties on May 8th 2015). Needless to say, any party (and I don't exclude UKIP though I consider the possibility remote) winning an overall majority (however small) in the next Commons (or coming within say less than five seats of a majority given Sinn Fein non-attendance) will render the entire discussion moot and I suspect that's what many people in all parties and no party really want.
If UKIP won the 2015 general election it would probably mean the end of the Tory party as we know it today. It would certainly be the end of Cammo and Osbo and herald the coming of Boris. I would also be a happy man.
But lack of investment is partly a product of house price inflation. Look at stable German house prices and their business investment rates. The madness of pumping govt money into Buy To Let subsidies as Osborne is planning just sucks more investment capital into a housing bubble.
German house prices are an oddity, in that I think you're right they've been boomless at the least for ages though I suspect their relationship to German investment rates is to say the least complex. Bear in mind too Germany has a stable or falling population, we don't, so there is real long term demand behind some ( I stress some ) of the UK's rise. I think in fact on present projections ( again pinch of salt it could change ) the UK population will surpass Germany's in just over 20 years.
OT Watched All The President's Men for the Nth time last night and what a cracking film it is - the total absence of computers/just typewriters is increasing weird - that it was made in 1976 is just mind-bending, that's almost 40yrs ago.
PS Woodward and Bernstein only revealed their Deep Throat source 33yrs after the event - wow.
I was wandering around Dundee City Centre today and there is a big turnout by the "Yes" campaign with quite fancy leaflets, balloons and quite a lot of supporters. As I fear will frequently be the case they had the field to themselves.
The "no" campaign will presumably largely be organised by Labour but it is a concern how severely their ground campaign has fallen away in recent times, certainly in places like Dundee which is an SNP hot spot.
There seemed to be a lot more people not taking their leaflets than wanting them but in fairness that is the experience of anyone trying to hand stuff to shoppers on a weekend. Are we really going to have more than a year of this? Blimey.
Fortunately for us our demographics, thanks to immigration and a rising birth rate, are in a much better position than Germany's over the next few decades.
"Germany's birthrate is the lowest in Europe - and falling fast"
Yes true enough. A falling populace creates its own issues ( who pays the taxes for pensions etc ) just ask the Japanese. Immigration certainly helps in that sense to supplement the low(ish) birth rate here. So at the least I can look forward to a nice young foreign nurse spoon feeding me my Farley's rusk in my dotage....
Do you disagree that the media might be misreading the re-introduction of the Dreamliner, or do you disagree that the airlines are probably doing the right checks themselves?
And now you've disagreed with one that pointed it out and another of mine saying what a great movie All The President's Men is. And that the journalists protected their sources for 33yrs.
What are you Disagreeing with here? People who don't agree with your Id? or because you can't separate your personal feelings from an opinion on any subject at all?
What a sad state when your emotions can't break from your opinions. BenM and I are at totally different ends of the political scale but we are cordial and occasionally agree. He is a fine example of the WW1 football Christmas trench players.
Do you disagree that the media might be misreading the re-introduction of the Dreamliner, or do you disagree that the airlines are probably doing the right checks themselves?
I mistrust the so called aviation journalists, who know nothing, or very little, and tend to suck up to the plane manufacturers and airlines- whom I also distrust- who give them their version of the facts. I wouldn't travel on a Dreamliner if my life depended on it. And it might!
One interesting point in the German opinion polls that Andy referred to yesterday is that the Pirate Party (who were at well over 10% not so long ago) are no longer even registering at all. If AfD have now supplanted the Pirates as the "sixth force" that could be worrying for Merkel, because I would assume the Pirates' support disproportionately comes from people who would otherwise vote SPD or Green, and that AfD's support comes disproportionately from people who would otherwise vote CDU or FDP.
You disagreed with a post enquiring about who'd be the first to make 2000 posts? And about Quincy MD? A TV show that's c40yrs old?
My suggestion for a GetALife button is gaining traction.
Oh just ignore him, he's just on for a squabble, the stereotypical Glaswegian as a fight looking to for somewhere to happen.
I skip 99% of @JamesKelly's posts as he represents less of the SNP's voters than Owen Jones.
He's not mainstream SNP at all from what I've read - he's far left and determined to be separatist whatever the price. He's been totally against everything until Alec changed his position - its laughable. I pay no attention to his opinions at all and that he repeatedly abuses me as a *Floating Voter* which I clearly am just demonstrates his insecurity.
If he pens yet another 20000 blog about his hurt ego when anyone dares to disagree with him - well, it just says it all. Normal folk just see it as water off a ducks back.
"If he pens yet another 20000 blog about his hurt ego when anyone dares to disagree with him...normal folk just see it as water off a ducks back"
Says the woman who has spent the afternoon writing copious essays all about me...clicking a disagree button. You couldn't make it up.
I may think that what you say makes you look a fool, Plato, but I defend to the death your right to say it. And you'd be very welcome to come to an SNP conference one day - you can enjoy the company of all those right-wing non-separatists you have so shrewdly discerned in our ranks. If you can find them - they're a wee bit shy.
One interesting point in the German opinion polls that Andy referred to yesterday is that the Piate Party (who were at well over 10% not so long ago) are no longer even registering at all. If AfD have now supplanted the Pirates as the "sixth force" that could be worrying for Merkel, because I would assume the Pirates' support disproportionately comes from people who would otherwise vote SPD or Green, and that AfD's support comes disproportionately from people who would otherwise vote CDU or FDP.
The Pirate Code is more what you'd call "guidelines" than actual rules.
Do you disagree that the media might be misreading the re-introduction of the Dreamliner, or do you disagree that the airlines are probably doing the right checks themselves?
I mistrust the so called aviation journalists, who know nothing, or very little, and tend to suck up to the plane manufacturers and airlines- whom I also distrust- who give them their version of the facts. I wouldn't travel on a Dreamliner if my life depended on it. And it might!
The airlines are also under not a little pressure from the US and Boeing. The Japanese, to their credit, have asked for further tests. But the fundamental problem is that the amount of testing required is massive - the chances of problems showing up in a couple of flights are minuscule.
This is not the first problem Boeing have had with the 787's electrical systems - they had a fire during a test flight in 2010. I have severe doubts about whether, even with these changes, they understand the electrical systems well enough.
The 787's electrical systems are very different from those of any other airliner. I fear Boeing may have bitten off more than they can chew.
And the FAA have also shown themselves to be more than a little incompetent in this whole mess. Continuing to allow ETOPS 180 (i.e. extended flights over water) with the battery problems not root-sourced is crazy in my eyes.
Letta is meeting Napolitano right now. He entered Quirinale 1 hour ago.
I think the government should born now...maybe tomorrow....
Journalists told to be ready for 5PM
Andrea
If Silvio does manage to return to government (under Letta) then Cameron should appoint SeanT as Her Britannic Majesty's Ambassador to the Italian Republic.
Silvio wants to give it back....but does the state really have the money required to send it back? I think the likely scenario is having that abolished but not returned back.
Any sensible person can see that it makes sense for all of the UK to continue with Sterling, given the amount of trade etc. Anybody of another opinion is either stupid or just anti Scottish independence and petty minded. Simple.
So for all the years Eck was banging on about Scotland using Euros, was he
a. stupid b. Anti Scottish c. petty minded d. Simple e. All of the above
Any sensible person can see that it makes sense for all of the UK to continue with Sterling, given the amount of trade etc. Anybody of another opinion is either stupid or just anti Scottish independence and petty minded. Simple.
So for all the years Eck was banging on about Scotland using Euros, was he
a. stupid b. Anti Scottish c. petty minded d. Simple e. All of the above
Speaking at the Centre of European Policy Studies in Brussels before his visit to the United States Alex Salmond MSP, Leader of the Opposition in the Scottish Parliament, outlined why he thought sterling was damaging to Scotland.
"And Scotland's interest involves joining the Euro sooner rather than later. For many years now, the pound sterling has been a millstone round Scotland's neck. Sterling is costing Scotland jobs and prosperity in manufacturing, agriculture and tourism. Yet far from addressing the high value of sterling, the Bank of England push up interest rates to 5.5%, putting more pressure on exports and jobs."
I'm finding Ed Miliband's latest wheeze for conjuring money out of nowhere quite amusing. Using the tax system to favour Goldman Sachs and Clifford Chance, and penalise the companies which provide their cleaners, is certainly a novel way of promoting social justice and boosting the economy.
Also, doesn't he know we are members of the EU, and therefore he doesn't have the option of using public procurement to further his pet projects?
Rob, politicians do have to change their stance sometimes for pragmatic reasons when the circumstances change. For example, only a few short years ago David Cameron wanted to "let sunshine win the day". Now he has a firmly anti-sunshine stance.
That doesn't mean he isn't the same man with the same right-wing neo-Thatcherite principles. It simply means that he's not dogmatic about whether he uses the forces of light or the forces of darkness as a means to that end.
I see John Ashton has decided to attack private schools for spreading measles. Plus gypsies and foreigners. Nice touch.
'He said the risk was similar to that from groups such as gypsies and travellers, who have previously spread the disease
"Layered on top of that you have got a lot of children from abroad, especially from the Far East, from countries such as Hong Kong and China, and there are few checks being done to establish their immunisation records."
Of course, there are no 'pupils from overseas with unknown health records' in state schools, are there?
Rob, politicians do have to change their stance sometimes for pragmatic reasons when the circumstances change. For example, only a few short years ago David Cameron wanted to "let sunshine win the day". Now he has a firmly anti-sunshine stance.
That doesn't mean he isn't the same man with the same right-wing neo-Thatcherite principles. It simply means that he's not dogmatic about whether he uses the forces of light or the forces of darkness as a means to that end.
I remember on PB a lot of discussion about how Cameron was a bigot because of his previous stance on gay marriage. So he isn't allowed to change his views on that, but Salmond is on which currency is best for Scotland?
"I remember on PB a lot of discussion about how Cameron was a bigot because of his previous stance on gay marriage. So he isn't allowed to change his views on that, but Salmond is on which currency is best for Scotland?"
Let me get this straight - you've taken something said by other people, compared it to something I've just said, and concluded that I'm being inconsistent.
Do you disagree that the media might be misreading the re-introduction of the Dreamliner, or do you disagree that the airlines are probably doing the right checks themselves?
I mistrust the so called aviation journalists, who know nothing, or very little, and tend to suck up to the plane manufacturers and airlines- whom I also distrust- who give them their version of the facts. I wouldn't travel on a Dreamliner if my life depended on it. And it might!
The airlines are also under not a little pressure from the US and Boeing. The Japanese, to their credit, have asked for further tests. But the fundamental problem is that the amount of testing required is massive - the chances of problems showing up in a couple of flights are minuscule.
This is not the first problem Boeing have had with the 787's electrical systems - they had a fire during a test flight in 2010. I have severe doubts about whether, even with these changes, they understand the electrical systems well enough.
The 787's electrical systems are very different from those of any other airliner. I fear Boeing may have bitten off more than they can chew.
And the FAA have also shown themselves to be more than a little incompetent in this whole mess. Continuing to allow ETOPS 180 (i.e. extended flights over water) with the battery problems not root-sourced is crazy in my eyes.
At least Boeing are concurrently revamping the tried and tested 747 (as the new-build 747-8 series).
"I remember on PB a lot of discussion about how Cameron was a bigot because of his previous stance on gay marriage. So he isn't allowed to change his views on that, but Salmond is on which currency is best for Scotland?"
Let me get this straight - you've taken something said by other people, compared it to something I've just said, and concluded that I'm being inconsistent.
Oh-kaaaay...
I was addressing the concept of a politician being able to change his mind, and how some people don't seem to accept it is possible except for purely political reasons. I think both are nice example of how someone has looked at the facts and reconsidered their own opinion.
Second amusement of the day: the idea that the Conservative Party can dictate what the Sun and Telegraph say about UKIP. It's particularly funny that this suggestion comes from the same people who have been telling us that the Conservatives are hopeless at PR, haven't a clue about politics, couldn't buy a pasty, etc etc
Second amusement of the day: the idea that the Conservative Party can dictate what the Sun and Telegraph say about UKIP. It's particularly funny that this suggestion comes from the same people who have been telling us that the Conservatives are hopeless at PR, haven't a clue about politics, couldn't buy a pasty, etc etc
We can recall after the 1st leadership debate in 2010 , the Conservatives calling in their tame newspaper contacts to a succession of meetings at CCHQ one after the other asking them to run a smear campaign against Nick Clegg .
The Professor's comments about private schools incubating measles didn't make a whole lot of sense to me.
My three children were vaccinated before they went to school so what school they went to is irrelevant. I imagine that the vast majority of those children who have been vaccinated (like mine) will have been done by the NHS. And the schools were scrupulous in asking for vaccination records and offering teenage vaccinations etc.
Rather than make what seems to me to be a non-issue about private schools he should be concentrating on those idiot parents who don't vaccinate at all.
"Enrico Letta was born in Pisa, a city in Tuscany, in Central Italy, to Anna Banchi and Giorgio Letta. His father Giorgio was a professor of probability calculus at the University of Pisa, member of the Accademia dei Lincei and of the Accademia nazionale delle scienze. His uncle, Gianni Letta, is one of Silvio Berlusconi's senior aides "
As we say in Italy " Better a death in the family than a Pisan at the door . "
Deputy PM and Home Office: Angelino Alfano (PDL) Economy: Fabrizio Saccomanni (director of Bank of Italy) Development: Flavio Zanonato (PD) Transports: Maurizio Lupi (PDL) Health: Beatrice Lorenzin (PDL) Justice: Anna Maria Cancellieri (Home Office Sec under Monti) Work: Enrico Giovannini (National Statistics Institute President) Education: Maria Chiara Carrozza (PD, Rector of a University) Culture: Massimo Bray (PD) Agriculture: Nunzia di Girolamo (PDL) Environment: Andrea Orlando (PD) Foreign: Emma Bonino Defence: Mario Mauro (Monti's List, former PDL) EU Affairs: Enzo Monavero Milanesi (same position held under Monti) Regional Affairs: Graziano Del Rio (PD) Territorial Cohesion: Carlo Trigilia Relationship with Parliamenet : Dario Franceschini (PD) Reforms: Gaetano Quagliariello (PDL) Integration: Cécile Kyenge Kashetu (PD) Equal Rights, Youth, Sport: Josefa Idem (PD, former Olympic Gold) Public Administraton: Giampiero D’Alia (UDC)
Anyone who listened to this excruciating piece of propaganda from Justin Webb a few years back (during the Bush years, no less) will find the idea that the BBC is anti-American laughable -
Any sensible person can see that it makes sense for all of the UK to continue with Sterling, given the amount of trade etc. Anybody of another opinion is either stupid or just anti Scottish independence and petty minded. Simple.
So for all the years Eck was banging on about Scotland using Euros, was he
a. stupid b. Anti Scottish c. petty minded d. Simple e. All of the above
Scott as ever you are living in the past, just because we used to put children up chimneys and down mines does not mean we should continue doing it forever. Unlike you people are able to assess things and change direction , it is called reality.
Comments
But here is the industry insider view:
Housing associations operating as help to buy agents are recruiting extra staff to meet demand for the new scheme aimed at helping people get on, or move up, the housing ladder.
Agents have reported a spike in interest for the product in the first month - in some cases double its predecessor, firstbuy.
Under the equity loan scheme, which came into effect on 1 April, the government will lend a buyer up to 20 per cent of the value of a new build home if they have a minimum 5 per cent deposit. It replaced firstbuy and is available to all, not just first-time, buyers.
Moat, the help to buy agent in Essex, Kent, Sussex and south London, and Catalyst Housing, which covers Oxfordshire, Buckinghamshire, Berkshire and Surrey, are recruiting extra people owing to the scheme’s popularity.
Orbit, the largest help to buy agent, which operates across the west midlands, Norfolk, Suffolk, Bedfordshire and Cambridgeshire, is expanding its 30-person team by 10 per cent and is ‘quite prepared’ to add more staff if necessary.
It received just under 250 help to buy equity loan reservations in the first couple of weeks of April - more than the 206 firstbuy reservations it received during the whole of March.
Orbit anticipates 3,000 help to buy completions this year, compared with 1,500 completions for homebuy and firstbuy products last year.
Margaret Snook, head of Orbit’s homebuy agency, said: ‘We are getting about double the amount of cases we would have expected at a busy period for firstbuy, so it does really seem to be taking [off].’
So I would say the early signs give cause for Osborne to be "cautiously optimistic".
The UK not only needs more houses, but needs to let inflation reduce the value of the current stock until it falls into affordability. All the parties are shit scared of tackling this nettle.
I can tell you tim that if Matron decides to inject you don't argue.
With Matron acting in loco parentis and parents paying a thousand pounds a week to keep Johnny at school the options for pupil or parent saying "No!" are very limited.
As far as I can see Berlusconi is the one who wants to avoid an election. I don't really understand why, but from the word go in February his fixation has been to secure the junior spot in a grand coalition, rather than return the polls.
Perhaps it's because a new election would be an all-or-nothing proposition for him - he might win, but if he lost the consequences for him in his legal battles could be devastating.
By the way, congratulations to Malcolm for expertly dealing with all the customary drivel about Scotland from AlanBrooke and Carlotta earlier in this thread. It really is getting tedious now.
http://www.guardian.co.uk/commentisfree/2013/apr/27/conservatives-more-unpopular-than-they-realise
However, it seems to be going down well on cif. Typical comments:
"Cameron and Osborne in one photograph...It's incredible how much ineptitude and absolute revulsion can be captured in one picture...I'm surprised the lens didn't throw up, or get blinded by the sun reflected off Shiny-face's head."
"Thatcher's spawn
- smug, self-satisfied with an overinflated estimation of their worth and talent and arrogant sense of entitlement - wilful blindness to the fact they are in positions of power through their connections and the skewed life chances of this class-riddled country rather than ability, simultaneusly blaming the poor and vulnerable for their own predicament.
Everyone hates them, even natural Tory voters who are flocking to UKIP in their droves"
then the slack in the economy would pick up, wages would rise and people would buy houses. Once again this is just a mindless gimmick from Gordon's Mini-me which hopes to plaster over the failure to reform the banking sector.
"There is a ritual, and even a specialised vocabulary, for midterm local elections in the UK. In advance, they are always a “crucial test” of the government’s popularity, and the opposition’s ability to turn poll ratings into votes. Next comes expectation management, when incumbent parties brief that they will lose practically all their councillors, and the challengers claim they expect to gain hardly any, in the forlorn hope of bamboozling political reporters.
Then comes the count, always a “grim night” for the governing party on which it loses “swaths” of seats in “former strongholds”, despite claims that its vote is “holding up well” in much of the country – though clearly less so in places that are “difficult territory for us”. Finally comes the “aftermath”, in which the losing party claims to have listened and “learnt lessons”, while privately holding an “inquest” into its “disastrous performance”.
http://lordashcroftpolls.com/2013/04/britons-still-dont-believe-that-the-tories-are-on-their-side/?utm_source=rss&utm_medium=rss&utm_campaign=britons-still-dont-believe-that-the-tories-are-on-their-side&utm_source=Lord+Ashcroft+Polls&utm_campaign=83c29b8a1a-RSS_EMAIL_CAMPAIGN&utm_medium=email
Not sure if the marginals poll he refers to is new.
But a stable property market and unimpaired mortgage books are preconditions for reforming the banking sector and getting credit flowing through bank distribution systems.
The large mortgage books held by the 'high street' banks are the main reason for the BoE (through the PRA) requiring the banks to raise an additional £25 billion of capital to protect depositors and taxpayers from further systemic collapse in the financial markets.
The options to raise this additional capital are very limited. Until the banks are restructured they will not be able to attract capital from the financial markets. The government (i.e. the taxpayer) is in no position to bung them £25 bn in extra capital. So the only feasible solution is for the BoE to buy chunks of mortgage books off the banks balance sheets, thereby reducing increased capital requirements, increasing funds available for lending, improving share value and ROE, enabling both the sale of bank shares by the government at good value and the ability of the banks to attract market funds.
Mortgages sitting on the central government books (following transfer from the BoE) could then be either securitised and exchanged for 'cash now' on the international financial markets or run down to term at a profit by the government (as is happening today with the NR & B&B books). As the central government is not a licensed deposit taking institution the additional capital requirements will not be imposed on the subsidiary companies holding the mortgage books (e,g, UK Asset Resolution).
For all the above to work requires house prices to remain stable. This does not mean that they need to rise in real terms like the boom years of the noughties just that they need to hold their nominal values and not crash by near 10% a year as is happening on the continent.
The equity loan and guaranteed schemes launched by Osborne are designed to hold up demand and prices thereby creating favourable conditions for buyers to commit and constructors to construct.
As always this is a balancing act rather than a choice of extremes. The Osborne measures are stimulating and kickstarting what should be an organic process. There is an exit strategy built in through the limited terms of the schemes and other monetary tweaks can be deplpyed in the unlikely event that we see the housing market overheat.
It is all sensible and sound economics.
If the money simply causes more asset inflation by increasing the number of potential buyers in the market without increasing the supply the schemes will have been a failure but the very preliminary indications are that the policy will have some effect in the desired areas.
I agree with you that the need for such schemes is caused by the failure to bite the bullet on the banks and restore credit facilities to the economy. It would have been better to have done this 2 years ago but any attempts to sort the banks out now will take at least a couple of years to increase credit. If these schemes fill the gap so be it, as long as they do not become an alternative to addressing the real problem.
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In July 2010, Jürgen Stark, the chief economist of the ECB announced: “The worst is over … the IMF is underestimating the strength of the economy in Europe.” He was wrong. The Eurozone has since suffered continual episodes of crisis each punctuated by the great and good - Lagarde, Monti, Hollande and Schäuble - asserting the worst, this time, is over.
Recently the seas have been relatively calm. Consensus thinking has been that Merkel will keep the EU ship steady in the run-up to her re-election; that France needs time to survive the erratic navigation of Hollande; that Italy will patch together a short term government but remiain in the doldrums; and that Spanish banks will just, only just, avoid going under.
But now the markets and international economic agencies are beginning to have doubts.
All of the above depends on Germany, the ECB, the IMF and international bond investors being prepared to pump stimulus into the crisis countries. But over the past two weeks there have been worrying noises coming from Germany and the other key players.
Germany
First, Merkel intervened to counter market speculation that the ECB would cut its interest rates from 0.75%. At a banking conference she made the following comments:
"The ECB is obviously in a difficult position. For Germany it would actually have to raise rates slightly at the moment, but for other countries it would have to do even more for more liquidity to be made available and especially for liquidity to reach corporate financing."
Then Jens Weidmann, the head of Germany's Bundesbank, stated his opposition to further expansion of the ECB's Outright Monetary Transactions (OMT) programme, the equivalent of BoE and Fed Quantitative Easing. Weidmann was quickly supported by Philipp Rösler, the German Economy Minister, who explained that Germany feared it would dampen EU Member states' willingness to implement fiscal reforms.
Yesterday further German discomfort was revealed when Handelsblatt printed a leaked document sent by Weidmann to the German Constitutional Court, which is due to rule on the legality of the European bailout fund (ESM) and OMT programme in June. In the document, it was revealed that Weidmann had rejected the offer of bond purchases by the ECB and that he was warning that the purchase of stressed countries' sovereign debt could "compromise the independence of the central bank".
And as if that wasn't enough, Jörg Asmussen, Germany's Board Member on the ECB repeated comments made earlier in the week that cuts in interest rates were not being passed onto the periphery where they are most needed and that keeping rates too low for too long could eventually lead to distortions adding for good measure the statement that “monetary policy is not an all-purpose weapon for any kind of economic illness".
So no one should be left in any doubt that Germany is continuing to take a hard line on Eurozone fiscal consolidation and is strongly resisting the provision of further stimulus through interest rate reduction and additional QE. The message to the crisis countries is clear: delay fiscal targets if you wish but do not expect any extraordinary monetary stimulus from the ECB.
Germany is not however deaf to the pleas and needs of the crisis countries. Wolfgang Schäuble, the CDU Foreign Minister, this week offered Spain a bilateral investment deal with Germany, pre-empting EU Commission action. Announcing the offer in Berlin, Schäuble said: “I’ll suggest, after having spoken with businesses and the banks, let’s not wait for the commission. Let’s have a bilateral program right away. How can we in Germany promote investment and financing of small and medium enterprises in Spain in a partnership to advance more quickly?”.
Schäuble was also careful not to criticise the Spanish government's decision to delay meeting its fiscal targets, saying this was a matter for the EU commission rather than Germany, but otherwise giving Spain comfort, saying: “If the economy deteriorates, you don’t reinforce the economic downturn through deeper cuts”.
So it seems Germany is prepared to give time to Spain (and the others) and to invest directly in its economy, but it will not support plans to increase multilateral lending.
---------------------------------------------------------------------------
The IMF
So where does this leave the IMF?
At the same conference in London at which Asmussen laid down Germany's hard line, David Lipton, the Obama appointed Deputy Managing Director of the IMF, argued a contrary position:
“There is ... a risk that Europe could fall into stagnation, which would have very serious implications for households, companies, banks and other bedrock institutions,” David Lipton told the conference.
“To decisively avoid that dangerous downside, policymakers must act now to strengthen the prospects for growth,” he said.
Commentators have been pointing to a split within the IMF between the doves (the Obama supporting Krugmanites) and the hawks (the Rogoffites lead by Lagarde).
This of course explains the media speculation about the IMF "criticising" Osborne and the UK last week. As Christine Lagarde delivered the official IMF line in support of Osborne and the UK from the IMF conference platform, Olivier Blanchard and David Lipton gave side interviews to UK journalists to promote their minority cause. Remember we only heard anodyne on record statements, not the conspiratorial off record directions.
The doves were clearly expecting a poor GDP Q1 growth figure from the UK and were seeing the opportunity to use it to advance the cause of monetary stimulus. But the UK turning in 0.3% growth - unexpected and welcome in the European context - was enough to strengthen the Merkel-Cameron-Lagarde austerity line, at least for the time being. Germany also, against its own economist's predictions, very marginally upgraded its annual growth forecast from 0.4% to 0.5%.
As a result, the IMF are now far less likely to overtly criticise the performance of the UK economy in their upcoming visit and report. The task of those within the IMF arguing for less austerity and more spending has been made more difficult.
Bond investors
Perhaps the most surprising repositioning of the week came from the long reigning king of bond investors. Bill Gross, the founder of PIMCO, the company managing over 3 trillion US dollars of investment funds, argued that “The U.K. and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in ythe short term, is the way to produce real growth. It is not, You’ve got to spend money.” And yet at the same time Gross was saying this, his London bond investment fund, under Ed Balls's brother Andrew, announced that PIMCO was selling Italian and Spanish Eurobonds in order to balance PIMCO's portfolio risk.
The endgame
So it seems that everyone agrees that more money needs to be spent in Europe to avoid catastrophe but no one is prepared to dip into their own pockets to provide it. Not Germany, not the ECB and not the international bond investors. Even the doves in the IMF are left isolated.
Meanwhile Spain struggles with over 6 million unemployed (27.2%); is into its seventh quarter of continuous recession; has rising debt of over 95% of GDP; expects continued contraction of employment and GDP throughout 2013; and, has reached the political limits of imposing austerity. Rajoy, Spain's PM has asked the EU commission for two years relief on their agreed fiscal consolidation targets. This will no doubt be granted but where is the growth coming from to even stabilise the Spanish economy during their fiscal holiday?
If Germany and the UK are struggling to achieve organic growth in the current climate, what chance do the weaker peripheral Eurozone countries have? Germany may have offered to invest in a few tapas bars and buy a few empty seaside villas but far, far more investment is needed to avert total collapse.
But no one seems prepared to lend. There is no money left. Or more correctly, there is no confidence left that money lent will be returned.
And that is why we should all be regarding the protestations of a Eurozone recovery with the deepest suspicion. It is looking increasingly likely that 2013 may well be the year in which the Eurozone finally implodes rather than recovers.
But then, "The worst is not so long as we can say this is the worst [is over]."
Of course, Silvio has other reasons for wanting the immunity from criminal prosecution that comes from office, but I guess he doesn't want to be seen as too eager on this.
Would be interesting to hear Andrea's comments.
Thus, for all David's earnest rhetoric about how much of a problem all this is for the Liberal Democrats, it is potentially a much thornier problem for David Cameron and Ed Milliband (or whoever leads the Conservative and Labour parties on May 8th 2015). Needless to say, any party (and I don't exclude UKIP though I consider the possibility remote) winning an overall majority (however small) in the next Commons (or coming within say less than five seats of a majority given Sinn Fein non-attendance) will render the entire discussion moot and I suspect that's what many people in all parties and no party really want.
If UKIP won the 2015 general election it would probably mean the end of the Tory party as we know it today. It would certainly be the end of Cammo and Osbo and herald the coming of Boris. I would also be a happy man.
PS Woodward and Bernstein only revealed their Deep Throat source 33yrs after the event - wow.
The "no" campaign will presumably largely be organised by Labour but it is a concern how severely their ground campaign has fallen away in recent times, certainly in places like Dundee which is an SNP hot spot.
There seemed to be a lot more people not taking their leaflets than wanting them but in fairness that is the experience of anyone trying to hand stuff to shoppers on a weekend. Are we really going to have more than a year of this? Blimey.
You disagreed with a post about Quincy MD? A TV show that's c40yrs old?
My suggestion for a GetALife button is gaining traction.
Do you disagree that the media might be misreading the re-introduction of the Dreamliner, or do you disagree that the airlines are probably doing the right checks themselves?
Well, it is the most important electoral choice any of us will ever make. Glad to hear that Yes Scotland are making their presence felt in Dundee.
Yeah, Plato, you show him! Ignore that thing he didn't say!
Only Plato could start an argument with a disagree button.
And now you've disagreed with one that pointed it out and another of mine saying what a great movie All The President's Men is. And that the journalists protected their sources for 33yrs.
What are you Disagreeing with here? People who don't agree with your Id? or because you can't separate your personal feelings from an opinion on any subject at all?
What a sad state when your emotions can't break from your opinions. BenM and I are at totally different ends of the political scale but we are cordial and occasionally agree. He is a fine example of the WW1 football Christmas trench players.
He's not mainstream SNP at all from what I've read - he's far left and determined to be separatist whatever the price. He's been totally against everything until Alec changed his position - its laughable. I pay no attention to his opinions at all and that he repeatedly abuses me as a *Floating Voter* which I clearly am just demonstrates his insecurity.
If he pens yet another 20000 blog about his hurt ego when anyone dares to disagree with him - well, it just says it all. Normal folk just see it as water off a ducks back.
Letta is meeting Napolitano right now. He entered Quirinale 1 hour ago.
I think the government should born now...maybe tomorrow....
Journalists told to be ready for 5PM
Says the woman who has spent the afternoon writing copious essays all about me...clicking a disagree button. You couldn't make it up.
I may think that what you say makes you look a fool, Plato, but I defend to the death your right to say it. And you'd be very welcome to come to an SNP conference one day - you can enjoy the company of all those right-wing non-separatists you have so shrewdly discerned in our ranks. If you can find them - they're a wee bit shy.
This is not the first problem Boeing have had with the 787's electrical systems - they had a fire during a test flight in 2010. I have severe doubts about whether, even with these changes, they understand the electrical systems well enough.
The 787's electrical systems are very different from those of any other airliner. I fear Boeing may have bitten off more than they can chew.
And the FAA have also shown themselves to be more than a little incompetent in this whole mess. Continuing to allow ETOPS 180 (i.e. extended flights over water) with the battery problems not root-sourced is crazy in my eyes.
If Silvio does manage to return to government (under Letta) then Cameron should appoint SeanT as Her Britannic Majesty's Ambassador to the Italian Republic.
Will you be getting your Mansion tax back?
Silvio wants to give it back....but does the state really have the money required to send it back? I think the likely scenario is having that abolished but not returned back.
a. stupid
b. Anti Scottish
c. petty minded
d. Simple
e. All of the above
http://www.thecommentator.com/article/3371/exclusive_leaked_documents_reveal_tory_spinners_in_intensive_anti_ukip_media_briefings
Speaking at the Centre of European Policy Studies in Brussels before his visit to the United States Alex Salmond MSP, Leader of the Opposition in the Scottish Parliament, outlined why he thought sterling was damaging to Scotland.
"And Scotland's interest involves joining the Euro sooner rather than later. For many years now, the pound sterling has been a millstone round Scotland's neck. Sterling is costing Scotland jobs and prosperity in manufacturing, agriculture and tourism. Yet far from addressing the high value of sterling, the Bank of England push up interest rates to 5.5%, putting more pressure on exports and jobs."
I'm finding Ed Miliband's latest wheeze for conjuring money out of nowhere quite amusing. Using the tax system to favour Goldman Sachs and Clifford Chance, and penalise the companies which provide their cleaners, is certainly a novel way of promoting social justice and boosting the economy.
Also, doesn't he know we are members of the EU, and therefore he doesn't have the option of using public procurement to further his pet projects?
That doesn't mean he isn't the same man with the same right-wing neo-Thatcherite principles. It simply means that he's not dogmatic about whether he uses the forces of light or the forces of darkness as a means to that end.
'He said the risk was similar to that from groups such as gypsies and travellers, who have previously spread the disease
"Layered on top of that you have got a lot of children from abroad, especially from the Far East, from countries such as Hong Kong and China, and there are few checks being done to establish their immunisation records."
Of course, there are no 'pupils from overseas with unknown health records' in state schools, are there?
http://www.independent.co.uk/life-style/health-and-families/health-news/reservoirs-of-disease-private-school-pupils-at-much-greater-risk-of-getting-measles-than-those-in-state-sector-says-leading-doctor-john-ashton-8590903.html
Let me get this straight - you've taken something said by other people, compared it to something I've just said, and concluded that I'm being inconsistent.
Oh-kaaaay...
My three children were vaccinated before they went to school so what school they went to is irrelevant. I imagine that the vast majority of those children who have been vaccinated (like mine) will have been done by the NHS. And the schools were scrupulous in asking for vaccination records and offering teenage vaccinations etc.
Rather than make what seems to me to be a non-issue about private schools he should be concentrating on those idiot parents who don't vaccinate at all.
"Enrico Letta was born in Pisa, a city in Tuscany, in Central Italy, to Anna Banchi and Giorgio Letta. His father Giorgio was a professor of probability calculus at the University of Pisa, member of the Accademia dei Lincei and of the Accademia nazionale delle scienze. His uncle, Gianni Letta, is one of Silvio Berlusconi's senior aides "
As we say in Italy " Better a death in the family than a Pisan at the door . "
Economy: Fabrizio Saccomanni (director of Bank of Italy)
Development: Flavio Zanonato (PD)
Transports: Maurizio Lupi (PDL)
Health: Beatrice Lorenzin (PDL)
Justice: Anna Maria Cancellieri (Home Office Sec under Monti)
Work: Enrico Giovannini (National Statistics Institute President)
Education: Maria Chiara Carrozza (PD, Rector of a University)
Culture: Massimo Bray (PD)
Agriculture: Nunzia di Girolamo (PDL)
Environment: Andrea Orlando (PD)
Foreign: Emma Bonino
Defence: Mario Mauro (Monti's List, former PDL)
EU Affairs: Enzo Monavero Milanesi (same position held under Monti)
Regional Affairs: Graziano Del Rio (PD)
Territorial Cohesion: Carlo Trigilia
Relationship with Parliamenet : Dario Franceschini (PD)
Reforms: Gaetano Quagliariello (PDL)
Integration: Cécile Kyenge Kashetu (PD)
Equal Rights, Youth, Sport: Josefa Idem (PD, former Olympic Gold)
Public Administraton: Giampiero D’Alia (UDC)
"Maybe they couldn't find anyone willing to defend drone attacks?"
Well that's encouraging.
http://news.bbc.co.uk/1/hi/6547881.stm