Irrelevant

Much fuss, sorry I mean analysis, I'm sure will be made of Osborne's pre-budget report today or the Autumn Statement as it's now known because the Tories promised to abolish the PBR. Promises, promises eh? Oh and the Tories also pledged to report to Parliament first not leak stuff beforehand, something they criticised Labour for. That'll be yet another promise broken then.

Anyway, some are referring to it as Brown's 13th budget, which indicates not only the lack of substance - tinkering about the edges - but deliberately making it more confusing: such as flipping between using Office for Budget Responsibility figures on growth and debt but using Treasury figures on the deficit. Witterings from Witney has also come to similar conclusions - labelling Osborne as an economic prat. I must say I can't disagree.

Yet it doesn't matter what the forecasts are - they've been wrong four times in the last 18 months already - the continuing eurozone crisis renders any such predictions as null and void.

Interestingly though Ed Balls, in response to the Chancellor's statement gave a great demonstration of a political dog whistle:

"If we are all in it together, why is it families, women and children always pay the most?"

See what he did there? The vast majority of men have families too, in some form or another, including the multi-millionaires: Osborne, Clegg and Cameron. So the statement is factually correct and logically he's referring to almost everyone in the country but the implication Balls' wants to give is entirely different.

Talking of agendas, out of all the 'announcements' made by Osborne see what the BBC has gone with just before tomorrow's strike:

Every Man For Himself

At first it was a drip drip, but now the messages warning of an Euro breakup - or euphemistically called 'a major event' - is gathering pace. The Financial Times warns that there are only 10 days left:

Italy’s disastrous bond auction on Friday tells us time is running out. The eurozone has 10 days at most.

The Organisation for Economic Co-operation and Development (OECD) gives very chilling forecasts that the Eurozone is rapidly deteriorating (my emphasis):

THE OECD says the eurozone crisis is now one step away from plunging advanced economies into an abyss of recession and even depression, with waves of bankruptcies and wealth destruction in Europe.

"The euro area crisis represents the key risk to the world economy at present," the OECD said in an unusually stark outlook report.

"A large negative event would... most likely send the OECD area as a whole into recession."

"If not addressed, recent contagion to countries thought to have relatively solid public finances could massively escalate economic disruption,"

Not only that but there's a large scale 'quiet' bank run on Eurozone banks and a very visible one a la Northern Rock in an another EU country - Latvia. Money is pouring out of the Eurozone at an alarming speed and the Euro banks are rapidly reaching a liquidity crisis. Welcome to credit crunch 2.0.

Those warnings continue with Zerohedge's post here (my emphasis):

Moody’s and others are indicating that time is running out and it may be a matter of days. ICAP, the currency trading facilitator, said it is testing its systems for a return to the drachma or even the Deutsche mark. Italian PM Monti admitted that the breakup of the Eurozone has been broached at meetings with top leaders.

This morning European stocks and U.S. futures are spiking sharply. The pundits are trying to pin the spike on everything from Black Friday sales to an IMF bailout of Italy. We think the spike is the reaction of a very oversold market to the resurfacing of the Sarkozy based rumor of a treaty deal for fiscal linkage. But, even if it’s true, can it be implemented quickly enough for a situation thought to be days away from crisis or climax?

Normally I'm reluctant to take the apocalyptic view, however clearly there seems panic behind the scenes. As this piece for the Telegraph asks, why haven't the supposed FCO warnings of possible riots and chaos in the event of a Euro collapse been published officially?

The radio silence from the EU (apart from some recent desperate unworkable announcements) lead to the suspicion that, like a falling dictator who quickly takes as much money as possible before he scarpers, the EU etc are desperately sandbagging to save themselves.

In short now it's every man for himself.

Update: Just seen that Richard North has more.

RIP Speedo

As a football fan, to say I'm stunned by today's news that Gary Speed has died is an understatement. He had a wonderful career epitomised by honest hard-work, endeavour and intelligent movement that allowed him to drift into scoring positions at the last minute. I've had the privilege of seeing him play on a number of occasions.

He also had a beautiful wife and two children...and yet...it still apparently wasn't enough. It just shows that you can never truly know someone, and undoubtedly there will be many many hurt people tonight who believed they could have helped if only he'd approached them.

Despite all the headlines of the danger of drugs and knife crime, suicide is a much bigger killer of men, particularly young men, and one that could be largely prevented if not for the stigma of its causes. If nothing else hopefully today's tragic news will help reverse that.

My condolences go to his wife and his two children at this terrible time.

RIP Mr Speed

"Awful Auction"

From the Financial Times:

Bond yields on short-term Italian debt rose above 8 per cent on Friday as Rome was forced to pay euro-era high interest rates in what analysts called an “awful” auction.

Italy raised its targeted €10bn in an auction of two-year bonds and six-month bills but at sharply higher yields.

“Rates have skyrocketed. It’s simply not sustainable in the long run,” said Marc Ostwald, strategist at Monument Securities in London.

It's all falling apart, but those that advocated this stupid, ridiculous and unworkable currency will get away scot free; it's the rest of us that will suffer the consequences when it all goes wrong.

What To Believe?

The Euro crisis naturally is rumbling on, and in the Noddygraph we have this from Benedict Brogan predicting Euro armageddon but don't panic 'call me Dave' is (sort of) on the case:

The Economist, with its cover of a euro coming down in flames, asks "Is this really the end?" and answers that, basically, yes it is. A senior minister explained to me a few days ago that contingency planning is now well under way, and takes in both preparations at home for a shock on the banks and work with consulates and embassies abroad, specifically in the eurozone, to anticipate social and banking disruption when it all goes wrong.

See, now I have a dilemma with this report. On the one hand Government ministers would be bloody stupid if they weren't conjuring up contingency plans for a Euro collapse, yet on the other hand they are bloody stupid. And to top it off Benedict Brogan is an apologist for Dave, whose 'lack of talents' knows no bounds. So what to make of it? One gets the feeling, that I've expressed before on here, that groundwork is being prepared for the blame game.

The reality seems pretty clear; the Euro crisis is coming to a conclusion, despite the EU rhetoric. The fundamental differences between German and France have not been resolved yet the 'record' has not changed for months, so one is inclined to accept this final paragraph from Brogan:

The betting in Team Dave seems to be that the game is as good as up for the single currency. "It's in our interests that they keep playing for time because that gives us more time to prepare," the minister told me. Anyone who has any kind of exposure to the euro – a euro mortgage for example, or a euro account, or euro contracts – should be taking advice now on how to mitigate the risk: politicians in the eurozone have their heads in the sand, and won't admit that behind the scenes officials across europe are scrambling to fill the sandbags while there is still time.

But then we remember that Mr Brogan writes crap like this and this and this. So what to believe? Probably like a broken watch which is still right twice a day, Brogan may have it correct this time, but if so, that instils another rather large concern - we're facing the biggest mass sovereign default in history, so if Cameron is really organising the sandbagging, then God help us.

On Standby

Out of necessity I've had to purchase a new idiot's lantern. It's nothing particularly special, I don't really watch much television but I'm pretty pleased with it.

Naturally the box was festooned with copious environmental messages, most of them images with red lines through, telling you not what to do such as; don't dispose of in a wheelie bin, or throw it at your neighbour's cat - that sort of thing. On the box also was a large logo with the words "Planet First: Making the world a greener, cleaner place to live".

Inside the box, the 'think of the polar bears' theme continues. Included is a foil sticker which contains an EU energy rating and has energy consumption figures on it. Mine is rated 'A' so apparently that's good (it looks remarkably similar to those foil club badges in Panini football sticker albums).

And so onto the instruction manual. Now, don't expect it tell you how to set the tv up, because it won't, there's the e-manual on the tv to do that - saves paper you see. So you have to turn the set on in order to get instructions on how to plug the tv in. Instead, in the paper version, we get more environmental messages such as the carbon footprint and the following advice:

Do not leave your tv in standby mode for long periods of time, as a small amount of electric power is still consumed.

So all well and good, I've bought a new tv and have nice warm feeling inside that I've done my bit for the environment.

However, there's a problem...

There's one feature my shiny new tv doesn't have that all my previous ones did...an on/off button. It doesn't have one, no push button, no rocker switch, no nothing. That then leaves only two options. Either unplugging the set, which means clambering around the back, fighting the cable spaghetti to unplug it from a four gang socket (for Mrs TBF this is a complete non starter). Or...wait for it...leave it on standby...permanently.

Genius, eh?

Quote Of The Day

From today's German paper Bild, with the headline:

Britain, America and the EU: All want our [Germany's] Cash,

...the last paragraph says, translated from German courtesy of Google translate (my emphasis):

In plain English: The French want to go to big money - and that may be in Europe at the end, only the German one.

Who Will Blink First

As Eurozone contagion swirls around Germany, Merkel has apparently made her position clear with what appears to be a Shermanesque statement:

"I am firmly convinced that the mandate of the European Central Bank cannot, absolutely cannot, be changed."

So now what? There are two stark options for Merkel; integration or break-up. Instead what we have here is a game of brinkmanship being taken right to the wire where all of our lives are being messed about on a whim. We've been here before, but it won't affect them it will instead affect us.

We should not be accepting this.

Last Man Standing

Contagion contagion everywhere; Spain is being hit with ever higher borrowing costs, so has Belgium, and Italy - bond yields which are again above the 7% level - and Portugal and so on. The markets have already assumed that France will lose its treasured AAA status. Then this morning contagion has hit the last man standing - the benchmark - Germany. 'A disaster' is what the German bond auction is being called (my emphasis):

LONDON, Nov 23 (Reuters) - German government bonds fell sharply on Wednesday after investors shunned the country's auction of new 10-year debt, signalling that the fast-spreading euro zone crisis was eroding the safe haven status of German debt.

Germany drew significantly less [sic] bids than the amount on offer for its Bunds, with investors deterred by very low yields. The euro zone powerhouse was caught between the best and worst possible scenarios on the euro zone crisis.

"It is a complete and utter disaster," said Marc Ostwald, strategist at Monument Securities in London. "If Germany can only manage a 0.65 cover in actual terms for what is going to be their next benchmark then what hope for everybody else?"

"It really tells you that the Bund yields are at the completely wrong level ... never mind that they are a safe haven. There's certainly a partial element of 'they (investors)would rather not have euros' in there."

The decisions by Germany are essential to the survival or otherwise of the Euro. As argued before on this blog, Germany faces an impossible position; it wants the survival of the Euro but is unable to take the steps necessary to ensure this. In a great piece Acting Man calls it An Intractable Problem.

The EU of course is arguing for more integration via Eurobonds as a solution:

The EC is launching a consultation to assess if the 17 eurozone countries can issue the bonds to raise cash.

Mr Barroso's 'stability bonds' plan would see much more investigation and control of the budgets of countries within the eurozone, to avoid a repeat of the bailouts and crises affecting the region.

But the EU must know that this would be illegal under German Constitutional Court rulings, it makes one wonder whether not only is this the last desperate throw of the dice for more integration but the laying of the groundwork for the blame game when it all goes pear shaped - that it was Germany's fault for not listening to the EC and its 'messiah' Barroso. The collapse of the Euro will cause enormous political ramifications and fallout.

The Financial Times has interesting piece that the markets have effectively 'smoked out' a stealth operation by the Bundesbank to try to control the German bond market, which spectacularly failed this morning:

That, alongside the fact that the Bundesbank is retaining an ever greater share of bonds from auction, suggests only one thing to the logical mind. It is the Bundesbank which is cornering the bund market on purpose. And it’s doing so to ensure that the one last repo rate in Europe that can be controlled remains suppressed.

The rate is important to suppress because almost all interbank funding is now done on a secured basis against the best quality collateral. Which implies two important points: 1) that the ECB itself has lost control and depends almost entirely on the Bundesbank to enforce its low rate policy target and 2) that the Bundesbank is having to retain more bunds from the market than ever before just to ensure the last functioning repo rate in Europe doesn’t spiral out of control.

That, we would say, is a big deal.

Whatever the case, Wednesday’s auction suggests the Bundesbank’s stealth operation has finally been outed. The question is, will the Bundesbank now be broken too?

One thing is for sure, though, now that Eurozone contagion has infected Germany, it's game over.

ClimateGate II

This subject is not really my speciality but here we go again, And here; even the BBC is doing a slightly better job than last time (not difficult and 'slightly' being the operative word which underlines the seriousness in which the BBC are taking it)

Apparently the UEA says (my emphasis):

"If genuine, (the sheer volume of material makes it impossible to confirm at present that they are all genuine) these emails have the appearance of having been held back after the theft of data and emails in 2009 to be released at a time designed to cause maximum disruption to the imminent international climate talks".

That will naturally be reported, by the MSM, as an entirely different type of data theft in comparison to this, this and this.