Tuesday, March 03, 2009

Doom and Gloom ...

The FT finished on Friday only about 50 points above its November low, the Dow's just hanging on above 7000.

Yesterday it dropped another 5% to a new low for this crisis. But given that the 2003 bottom (3300-ish ?) was caused by evaporating dot-com illusions, whereas this one's more down to various major structural unpleasantnesses, I'd have thought shares have a way to go - say to 2500-ish ?

It strikes me that someone like myself - on a smallish pension but with a chunk of savings in the bank - has only one chance to preserve any value. I need the FT100 to get down to 2500 as quickly as possible (at which point I get out of cash and into shares) before Gordon's printing-presses render both pension and savings worthless.


Wednesday's meeting of the Monetary Policy Committee will be shown the letters and then King will be allowed to take the Bank into the unknown. Normally the nine members of the MPC discuss interest rates, but having cut them to just 1 per cent this month, they have almost reached the end of that road. Now, instead of debating the price of money, the MPC will concentrate on the amount of it.

Quantitative easing allows the Bank to buy gilt-edged securities or corporate bonds from City institutions or through the market. As the Bank will not itself borrow the £100bn or more necessary, it is in effect printing money.



"There will be blood" says Niall Ferguson :

“There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable. The question is whether the general destabilization, the return of, if you like, political risk, ultimately leads to something really big in the realm of geopolitics. That seems a less certain outcome. We've already talked about why China and the United States are in an embrace they don't dare end. If Russia is looking for trouble the way Mr. Putin seems to be, I still have some doubt as to whether it can really make this trouble, because of the weakness of the Russian economy. It's hard to imagine Russia invading Ukraine without weakening its economic plight. They're desperately trying to prevent the ruble from falling off a cliff. They're spending all their reserves to prop it up. It's hardly going to help if they do another Georgia.”

“I was more struck Putin's bluster than his potential to bite, when he spoke at Davos. But he made a really good point, which I keep coming back to. In his speech, he said crises like this will encourage governments to engage in foreign policy aggression. I don't think he was talking about himself, but he might have been. It's true, one of the things historically that we see, and also when we go back to 30s, but also to the depressions 1870s and 19980s, weak regimes will often resort to a more aggressive foreign policy, to try to bolster their position. It's legitimacy that you can gain without economic disparity – playing the nationalist card. I wouldn't be surprised to see some of that in the year ahead.

It's just that I don't see it producing anything comparable with 1914 or 1939. It's kind of hard to envisage a world war. Even when most pessimistic, I struggle to see how that would work, because the U.S., for all its difficulties in the financial world, is so overwhelmingly dominant in the military world.”
Nothing, to be honest, that thee or me couldn't speculate on. Everyone knows that you need "a grand theme to appeal to the masses" at such times. The question is, what will that be? I can't see the EU, or even Putin (at present) annexing the Ukraine. In the UK I think we'll see more reality TV shows as HMG desperately try to keep the circuses running.

But there will be political consequences nonetheless. I particularly admire the attempts of the 'Scottish Government' to raise political awareness (and boost Carlisle and Berwick supermarket sales) by raising the price of alcohol. In today's Britain, a sober man will be an angry man.

The Economist has noted, two years on, the Government's retreat (which I blogged here) from the policy of engagement with (i.e. state funding of) the Muslim Council of Britain.

Now that system, and its unspoken compromises, lies in ruins. It was jettisoned in the autumn of 2006, when the government downgraded existing ties with the Muslim Council of Britain (in which movements close to the Muslim Brotherhood and the Islamists of Pakistan were strongly represented) and tried to find different interlocutors.
They've also noted that they've found no suitable replacement.

Nearly three years on, the government’s biggest problem is that it is struggling with two big questions at once. One is the set of problems described under the catch-all term of “cohesion”—narrowing the social, economic and cultural gap between Muslims (especially in some poor urban areas of northern Britain) and the rest of society. The second is countering the threat from groups preparing to commit violence in Britain or elsewhere in the name of Islam.

Alas, as I've pointed out many a time, the govts attempts at 'cohesion' merely show modern British culture - or lack thereof - in all its threadbare shame - not exactly an enticing prospect. This story will run and run.

The mother of Henry Webster speaks out :

It was January 11, 2007, when Henry, then 15 and a ginger-haired star rugby player, popular with his class mates and with no history of being disciplined for poor behaviour, arrived at the tennis court at The Ridgeway School in Swindon to settle, "one on one", an argument with a fellow pupil. Only it was a baying mob and not a single opponent waiting for him.

What happened next, witnessed by more than 100 pupils – and even filmed by one on a mobile phone – was an ambush so vicious that, at the subsequent court case, the judge described it as a ''savage and sustained attack".

It was, said Judge Carol Hagen when she passed sentence on 13 boys and young men who set upon Henry, a ''miracle'' that Henry had survived.

Though the 13 Asian teenagers and young men who attacked Henry – all members of a gang who called themselves the ''Asian Invaders'' – were given sentences of between eight months and eight years for grievous bodily harm and conspiracy to commit GBH, no independent inquiry into how Henry was brutally assaulted, while at school, in an attack that was described in court as ''something out of a Quentin Tarantino film".

During the trial, Judge Hagen was highly critical of the school, asking why there were no staff present in the tennis courts at the end of the school day, since it was known there had been trouble earlier in the day.

For the past 14 months Henry's mother has battled for a full inquiry and, after gaining support from the Government, has now won the right to a Serious Case Review on the attack.

The inquiry, which does not seek to apportion blame but to investigate what happened and evaluate what lessons can be learned, is expected to last four months and will, for the first time, lift the lid on alleged racial tensions within a school.

''I've fought hard to find out all the facts,'' said Mrs Webster, who is also suing The Ridgeway School for neglect. ''And it's been an excruciating wait.

"The school might say otherwise but the fact is that the attack on my son was a racial one. The school knew there were tensions – there have been numerous similar attacks before but nothing was ever done.

"Everything was swept under the carpet. Neither Henry or I am racist. But I feel my son was badly failed by a school that believes racism is only ever something that is carried out by white pupils."

It took a sustained campaign before the review was instigated by Mr Balls, the Secretary of State for Children, Schools and Families.

After a meeting with Mrs Webster he wrote to her saying that it was ''unacceptable that there has not been any full investigation of such a serious incident which left your son with permanent injuries".

Henry was repeatedly kicked, punched and battered before being beaten on the head with a claw hammer, fracturing his skull in three places and leaving him with permanent brain damage.

The Swindon local authority referred the case to their Local Safeguarding of Children Board, which has now sanctioned the review.

The headteacher of The Ridgeway School, Mr Steven Colledge, has said that he welcomes the investigation.

The case has highlighted the extent of racist incidents in our schools and, in particular, the reluctance on the part of some to treat attacks as racist when they are carried out by minority cultures.

Mrs Webster was not aware that, when those who carried out the crime came to court, it was up to the prosecution to cite the attack as racist.

Had that been proved, the sentences meted out – especially to Wasif Khan, 19, described in court as ''the hammer man'' and who was jailed for eight years for wielding the weapon that fractured Henry's skull – may well have been much stiffer.

What is particularly worrying, however, for parents in Swindon, is the light the case has shed on the number of racists attacks in the city's schools and how such incidents escalate.

Between November 2006 and November 2008 police dealt with 337 crimes – 137 of them violent incidents – at Swindon schools.

The highest number of those attacks, some 58, occurred at Churchfields school while 52 were recorded at Ridgeway school.

In the past 12 months, admittedly, perimeter fences and bans on mobile phones has helped the school reduce its number of violent crimes.

Henry, bleeding heavily from his head, was taken to hospital and, within 35 minutes, police had rounded up several of the gang members. It was Joe, Henry's younger brother, who telephoned his mother.

He had been standing at a bus stop when a passing pupil told him Henry had been beaten up. ''You can't imagine how it feels to see your son soaked in blood,'' Mrs Webster said, tears threatening.

''I just couldn't believe that no one from the school had called me to say there had been trouble earlier. All the pupils knew something was going on.

"When I was with Henry at the local hospital's accident and emergency unit one of Henry's friends telephoned me to say the same thing had happened to him some time before but he had managed to get away.

"All the children knew that these 'Asian invaders' were terrorising white pupils.''

For Mrs Webster the Serious Case Review will, she hopes, give some insight into how such a violent attack happened on the school premises.

''As far as I can see there was no control and no discipline,'' she says. ''Bullying and violence were rife when Henry was attacked and I want the school to admit that.''

Mr Colledge, the headteacher of The Ridgeway School, was unavailable for comment.

17 comments:

Michael said...

Aside from the military might of the USA, there's another reasonably good reason why major wars are less likely. I think this is because many modern leaders of the major nations tend to meet each other much more frequently and have a number of forums they attend together. This was not the case before World Wars 1 and 2 to anything like the extent is is now.

It speaks volumes that Putin, of all people, was speaking at Davos. In addition, modern economies are much more interconnected than they were - trade has been globalised and more countries require foreign links and investment. However, the likes of an aggrieved Iran, Pakistan and N Korea do have the potential to cause a lot of damage.

Anonymous said...

Niall Ferguson

The powers that be have started panicking about the dangers of a BNP breakthrough. It reads to me that Niall is providing some intellectual muscle.

Anonymous said...

This attack on the 15 yr old kid is almost unfathomable. Imagine if you were at that school and heard that 13 boys and men had arrived “tooled up” and almost killed your classmate. I had plenty of punch ups at school (20 yrs ago) but that was lack eyes and bloody noses stuff and I was always more worried about what my parents would say about the rip in my uniform, or worse, letter from the Rector (Scottish Headmaster).

I am now a copper and hitting someone on the head with a claw hammer (esp. if that person has been rendered helpless by a serious gang bashing) can only be an attempted murder….what other intent could he possibly have had? What effect did he think being repeatedly hit on the head with a hammer would have had on the victim? I’m not a doctor but I know that death is a likely result of hitting someone on the head with a clawhammer.

8 yrs (out in less than four) is offensive. It should have been life for all those carrying weapons and 15 (time served-none of this time off nonsense) for the rest. They went there with the premeditated intent of seriously injuring or killing their victim (evidenced by their prior arrangements and pre-arming).

If it were 13 white men assaulting an Asian school kid in the same manner their feet would not have touched the ground. Imagine the headlines. This poor woman had to fight tooth and nail to have the obvious (racial element) even considered.

Robert said...

"...I don't see it producing anything comparable with 1914 or 1939. It's kind of hard to envisage a world war. Even when most pessimistic, I struggle to see how that would work, because the U.S., for all its difficulties in the financial world, is so overwhelmingly dominant in the military world.”..."

Will the U.S. still be so dominant 10 years hence? Especially after years of a possibly defense-slashing Democratic administration? And presumably no one will suddenly rise to power in some other state, having determined that force is the only way out of his country's troubles?

It was hard to envisage a world war looking ahead from March 1933 either. But are we living "1932-1933"? And is the "cliff" a few years down the road?

dearieme said...

I agree that pensioners will want to time nicely a dash from cash to stuff. Whether stuff had best be shares or property or commodities or bog-rolls and tinned beans, GAK.

As for the rest, I suspect that It's Too Late.

JuliaM said...

"This attack on the 15 yr old kid is almost unfathomable."

As is the 'sentence' given to one of the perpetrators:

"Marcus Davey, prosecuting, told Swindon crown court that on the second date he was due to do community service, May 22, a probation officer called his address and was told that Khan was asleep and that no one would wake him."

Ahhhh, bless....

Homophobic Horse said...

"It's hardly going to help if they do another Georgia.”

Durrrr I dunno know Neall, maybe if NATO arms and trains Ukrainian army for the next 10 years and then lets them loose on ethnic Russians in Ukraine, Russia will just have to pull another one of those craaaaazy stunts.

" one of the things historically that we see, and also when we go back to 30s, but also to the depressions 1870s and 1980s, weak regimes will often resort to a more aggressive foreign policy, to try to bolster their position. It's legitimacy that you can gain without economic disparity – playing the nationalist card. "

Durrrrr, one of things that most worry globalists today is the idea of countries pulling up the drawbridges. Not the threat of aggressive nationalism.

The worst kind of nationalism, the "we have a holy mission to civilise the world" kind of nationalism epoused by America, which meets its nadir in the figure of Barack "We are the World" Obama is the most dangerous we face today. It's dangerous because it blends singular hubris and aggression with the monolithic prerogatives of globalisation. Another serious threat is the EU. These are the regimes that will be discredited and threatened by prolonged economic crisis.

Homophobic Horse said...

Economic crisis threatens the Euro

Sgt Troy said...

"Nearly three years on, the government’s biggest problem is that it is struggling with two big questions at once. One is the set of problems described under the catch-all term of “cohesion”—narrowing the social, economic and cultural gap between Muslims (especially in some poor urban areas of northern Britain) and the rest of society."

economically this is quite impossible, funny money economy is finito, so sharply falling GDP meets fast rising population. One of the last places of choice to import colonists from must be Mirpur in any case

One of the last bits of teaching I did I was in a room with maybe 25 of them, holding it pretty well, then I had a moment of revelation, "I've seen that one before".

Then looking into their dull eyes, I realised that was the case for most of them. I thought, "fxxk me, there's only about half a dozen sub-types"

First cousin marriage of course.

Socially, culturally......no way. Most of our sruff is apparently haram - they are deeply unprepossessing people

Sgt Troy said...

"These Muslims are kept in the dark, kept in their place and as a result are both ignorant and easily filled with hostility and rubbish about democracy – something yearned for by millions of Muslims in undemocratic states. The idea of freedom and liberty is more alarming still for them and middle-class Muslims too. Their natural inclination is to bow to authority within families, communities, mosques, and political institutions. "

http://www.independent.co.uk/opinion/commentators/yasmin-alibhai-brown/yasmin-alibhaibrown-why-muslims-will-not-fight-for-freedom-1635153.html

One is almost tempted to have a bit of sympathy for YAB, she is obviously painfully aware of the limitations of her own people. Then of course one remembers that she is a strident hag coloniser herself, then the empathy switches to the Last King of Scotland

Martin said...

“I was more struck Putin's bluster than his potential to bite, when he spoke at Davos. But he made a really good point, which I keep coming back to. In his speech, he said crises like this will encourage governments to engage in foreign policy aggression. I don't think he was talking about himself, but he might have been" -

Niall Ferguson, 2009.

"THERE IS NO such thing as the future. There are only futures, plural. Historians are supposed to confine themselves to the study of the past, but by drawing analogies between yesterday and today, they can sometimes suggest plausible tomorrows.

Seven years ago, the economist Brigitte Granville and I published an article in the Journal of Economic History titled "Weimar on the Volga," in which we argued that the experience of 1990s Russia bore many resemblances to the experience of 1920s Germany.

No historical analogy is exact, needless to say. Russia's currency did not collapse as completely as Germany's did in 1923, though the annual inflation rate did come close to 300% in 1992. Our hunch, nevertheless, was that the traumatic economic events of the 1990s would prove as harmful to Russian democracy as hyperinflation had been for German democracy 70 years earlier.

"By discrediting free markets, the rule of law, parliamentary institutions and international economic openness," we concluded, "the Weimar inflation proved the perfect seedbed for national socialism. In Russia, too, the immediate social costs of high inflation may have grave political consequences in the medium term. As in Weimar Germany, the losers may yet become the natural constituency for a political backlash against both foreign creditors and domestic profiteers."

Seven years later, the man who succeeded Boris N. Yeltsin as our article was going to press is doing much to vindicate our analysis. " -

Niall Ferguson, 'Reviving the evil empire', 'Los Angeles Times', May 28 2007.

Niall never to amaze me.

dearieme said...

"Niall never to amaze me".
Manages or fails?

Homophobic Horse said...

Niall is writing propaganda. He even admits to it's obvious historicist fallacies to make it more achingly sincere.

Read up on the Turkophiles, of Gladstone's era, read up another era's bullshit to see just how stupid people can be.

Martin said...

Dearieme,

Fails, goddammit!

Sgt Troy said...

http://isupporttheresistance.blogspot.com/

Mark said...

'one of things that most worry globalists today is the idea of countries pulling up the drawbridges. Not the threat of aggressive nationalism'.
Spot on.
Furthermore, whenever our 'leaders' prattle about 'international co-operation' adjust your bullshit monitor accordingly.
In Broon's mouth now 'international co-operation' probably means the upcoming G20 conference he's hosting next month. One of the side effects of the G20 meeting may actually be to increase discord WITHIN the EU- as none of the accession states will get a hearing at this festival of 'internationalism'.

Anonymous said...

See 'Street Jihad'