The importance of options: no need to BRIC it (part deux)

Liam Halligan comments on currency games in Japan. The Japanese have been trying to reduce the overblown value of their currency to help exporters. The reason it has strengthened is because currency investors wanted to find a currency outside the Euro or Dollar in which to hedge. The upside of the strengthening might be the ability of Japanese firms to make investments abroad. It is an old game which is being played with a new intensity in the modern era. 

(click timestamp below to read more)

Gordon did it

Personally I think that Keith Marsden is being charitable to Gordon Brown when he observes in the Wall Street Journal that "Mr. Brown cannot honestly deny all responsibility for Britain's recession". Brown created an open goal for the unstable or the unscrupulous in the banking sector- a man who spent much of his life mind you in outright opposition to the free economy. Gordon's ability to smile when it began to collapse was indicative of a man who fed the weaknesses knowing that he couldn't lose- Gordon is the biggest chancer of all.

"The Government needs to get tough. The nation's top bankers must be called to a private room and be forced to put their cards on the table – fully disclosing their exposure to sub-prime liabilities in the UK and elsewhere. It should be made clear that any executive who withholds information, which it can later be proven they knew, will be subject to criminal prosecution.

Once the exposures are clear – or clearer – we need further consolidation. The weaker banks that have made the worst decisions must be subsumed by stronger, more prudent institutions. That's how capitalism works, or is supposed to work. But ministers and regulators are blocking this fundamental purging process, preventing credit markets from rebooting and storing up untold problems for the future."

At last my own preferred outline articulated. Link here

Since we need a "tough government" and not a stalinist one, we had better get a new one. Fast.

Can we burn the fiddlers yet?

"Swedish unemployment suddenly jumped from 5.9 per cent to 8.1 per cent"

Seasonally adjusted?

Anatole Kaletsky sounds an optimistic note concerning the world economy. Personally I'm a pessimist, but mainly relating to the UK economy. Others around the world will continue to grow as the banks reign in UK spending and the housing market goes way way down.

Yet what is interesting to me about the Swedish statistics is that they are so dramatic. I suppose it could be a routine matter, relating to the end of university courses in June/July, but if so then why is it highlighted?

The more I see of statistics in governments, the more I question. Of course I know there are lies, damned lies, etc, but I think that that very truism has been exploited to the limit. After all, when statistics are massaged- and dahhling they obviously are- you're left to "trust" the masseurs. But the truth is that at the end all statistics mean something concrete to someone somewhere and are not just means of manipulating paltry currents of franchise- ie. voters.

An interesting thing that Kaletsky points to is the division between economists and financiers- the latter being the pessimists- " The consensus view among economists, as opposed to financiers, at present is that the United States is experiencing, at worst, a mild recession"... . It occurs to me that that's because financiers are the ones who are performing the sums and to whom these sums have real-life consequences. Declining fortunes are real-life enough. Future income opportunities are real-life enough.

It all brings me nicely to Richard North's post about data manipulation. It rather disappoints me (naive as I must be) that people resort to crude data manipulation. It's a brutal but effective way of coralling those you distrust and dislike, and it doesn't require a terrible deal of intellect. Most boring and most damaging- I think it will be seen as most criminal too, in the long run.

The billion dollar bluffs

Iran's leadership must be laughing in its boots at the results of their missile trickery the other day. Oil hits a new high, Fanny Mae and Freddy Mac plunge towards the rocks (these laughably named mortgage lenders).

Did you know that Osama Bin Laden targeted high oil prices in his scheme to lay the West low? Well, he did (yes, I read Drudge too).

I wouldn't mind putting a little flutter myself- on the bearded one actually being harboured in Iran. The old Sunni-Shia-elite two step.

Seriously worrying, but good writing.


Ambrose Evans-Pritchard has a startlingly good analysis in the Telegraph of the financial crisis hitting world markets. Bottom line: the Fed did not panic.

Economic woes.

There is a list of things as long as your arm that could outline what Gordon Brown has done to bring the British economy to its current perilous pass. Of course, listing them here would require a little too much Googling for today... (If the state of Gordon-critiquing were better I am sure I would have them off the top of my head by now. (dis)Honourable mention here for the BBC for being such a good shill for Gordon over the years. It's what they do, you know).

The Telegraph notes, in an article typically headlined according to the personality involved, "The banking crisis of 1973 was one of the key factors that led to Mr Heath's government losing the 1974 election."

Mmm. 1973. Here we go again.

Scary and real

I had this article about Britain's coming disillusion pointed out to me, and it really struck home. The fiddling of figures in the UK has reached desperate proportions; the imperative to deceive out of control. From immigration to education to unemployment there has been a general whitewash of data, leading to a bubble of false confidence and false alarms to go with it.

All due to burst sometime soon, according to a book written by former Guardianistas Elliot and Atkinson, reviewed by Jeff Randall.

Yes, they're Daily Mail themes, and yes, such things sell books, and no these authors are not the only two good apples in the rotten basket. In fact though, the greatest disservice done by our fetid media, as well as our fetid politicians, is that they have so promiscuously oversold the truth, mingling it with their little lies to such a point where truth and lies are indistinguishable. I won't be reading the book, I don't think, but it seems to me that it's a truth in this case only slightly oversold.