Are we sleep-walking out of Europe ?

Eloise posted:

She's already positioned several handy fall guys ... Hunt she can blame for NHS, Jonson, Fox and Davis positioned to take the fall for any Brexit troubles. 

I think Hunt is generally seen as being "mostly harmless", but I did laugh when I saw how TM had dropped Johnson, Fox & Davis right in the mire. An absolute masterstroke.

And to celebrate the Westminster machinations, I today got the complete set (DVDs) of "The Thick of It", which we will watch after we've finished the evergreen "Yes (Prime) Minister"! 

Suzy Wong posted:

Eloise posted:

She's already positioned several handy fall guys ... Hunt she can blame for NHS, Jonson, Fox and Davis positioned to take the fall for any Brexit troubles. 

I think Hunt is generally seen as being "mostly harmless", but I did laugh when I saw how TM had dropped Johnson, Fox & Davis right in the mire. An absolute masterstroke.

No more than they deserve.

The EU is probably not going to survive, and it is not going to be the Brexit that causes it to break up.That will properly be laid squarely at the feet of the technocrats who run the EU, and their central banking cabal buddies. Chris LaGarde and Mario Draghi will have a lot more to do with it than Farage, et al ever will.

I keep writing about the bond and currency markets here, because that is the REAL problem. Worrying about the Brexit is akin to worrying that someone just threw up on the carpet while the house is in the midst of a 3-alarm fire. The Brexit isn't going to cause your children economic woes, it is the irresponsible actions of the central bankers (the so-called "experts")  and their lackey politicians from every political stripe that are going to lead to a real economic disaster.

Because Draghi & Kuroda have stripped away all yield, investors are being forced to buy overvalued bonds that will never pay off. This is especially true in Japan, which continues unabated in its drive to become the world's first bankrupt old age colony.  Japanese investors are buying foreign bonds like never before, and paying ridiculous valuations for them. (Recall that bond prices are inversely related to yield.)

For example; 4 year old German debt is selling at 200% of par: Even if the financial and currency markets survive this mess, you can rest assured that the German government is never going to pay back more than 100 cents on the dollar at maturity.

And much of this money in search of yield is now piling into US Treasuries, which puts Janet Yellen right in the dunce seat where she belongs. (Another so-called "expert".) She and her posse of Keynesian clowns insist that 7-8 years of zero interest rates haven't produced any bubbles - WTF does she think is happening in the bond market right now?

And similarly the corporations, in a frantic effort to keep the party going because of bad central banking policy, are destroying their balance sheets and eating their seed corn in a search for yield. Ditto all these bond fund managers who will lose their jobs if they sit on cash.

You don't need a PhD in economics to figure out this is not sustainable (in fact, those are the @ssholes behind the entire mess), and that it must unravel. Right now, either the stock market or the bond market is lying, because they both can't be telling the truth. Look for a HUGE move down in the stock market within the next year or so (probably a lot less than a year)...then the bond market will inevitably follow.

In the final analysis, the global bond market is a giant volcano of noncollectable capital gains. Can you say "multi-trillion dollar bond implosion"? You'd better try, because its eventual arrival is almost a certainty. And when it does, those who caused it (see above) will point to anything else as the cause except their own asinine policies.And trust me, these criminals will figure out a way to hand us the bill, with our retirement and pension funds at the top of the list. Of course they'll cloak it in language that makes it seem like it's for "our own good" but in reality they will just be stealing the money to buy their debt...it's already happened in a few countries.

No, the Brexit isn't going to cost you your pension, or your job, or your savings, or your children's' futures. That pooch has already been screwed...and the EU will almost certainly be a casualty of the meltdown.

http://www.bbc.co.uk/news/uk-england-36820756

A small military aircraft carrying newly-appointed Foreign Secretary Boris Johnson has had to make an emergency landing on its way to Brussels.

Presumably Boris had to make a quick Brexit

Suzy Wong posted:

MDS posted:

Suzy Wong posted:

and Hippo Head for England Manager?........

Still waiting on KevinW's views on that one. 

Guys - I would actually be quite happy of ol' Hippo took over. He would be an upgrade on Hapless Hodgson (who wouldn't). At least he'll know who his best team are, and play a system. It might not be pretty but it might also mean we were not humiliated on a regular basis.

Allardyce also gets the best out of mediocre teams, and the England squad, stuffed as it is with Spuds bottlers and assorted donkeys from Arsenal and Man City, is nothing if not mediocre.

Dr Mark posted:

A very interesting post, and certainly one point of view. You may well be an 'Expert' in Economics, and more qualified to comment on these matters than I. However, I would like to comment on one or two of your specific assertions.

"The Brexit isn't going to cause your children economic woes",

This is a subjective assessment. Many 'experts' (and don't decry them simply because they are labelled as 'experts') believe that Brexit will cause us (those who live in the UK) and our children economic woes by the bucket-load. There are many reasons why I, with some regret and as someone who voted to remain, believe that Brexit will have both a short and medium term adverse effect on our economy.   

"it is the irresponsible actions of the central bankers (the so-called "experts")  and their lackey politicians from every political stripe that are going to lead to a real economic disaster".

We could argue about the merits of this particular view of our economic future. I certainly agree that the recent financial crises was largely triggered by the huge amount of collateralised debt, and the shady (or downright illegal) trading practices relating to these by people with influence in some of the large (primarily US based) banks (in particular 'Lehmans'). A large part of the problem was not simply that 'all bankers are evil', as some would have us believe. Rather, it was that many financial institutions simply did not fully understand the complexity, and the underlying risk profiles associated with these financial instruments. Since the crash, financial institutions have spent huge amounts of money investing in extremely complex risk analytics and assessment systems associated with derivatives and other extremely complex instruments in order that they have a much better understanding of all of the underlying risks to which they might be exposed by investing in these instruments.       

"Because Draghi & Kuroda have stripped away all yield, investors are being forced to buy overvalued bonds that will never pay off"

No one is "forcing" investors to by overvalued bonds, or any other form of investment instrument for that matter.  

"Ditto all these bond fund managers who will lose their jobs if they sit on cash".

Certainly not the case in the (responsible) financial institutions in which I have worked. I hasten to add that my work was in the IT field, helping to select and implement trading and risk analytic systems, and not as a fund manager, hence why I do not consider myself to be an 'Expert'.

"In reality they will just be stealing the money to buy their debt"

Another fairly contentious statement, and I am not really sure to whom your 'they' refers. But then, I could make the equally contentious and admittedly outrageous statement that - isn't this the obvious end-game of a 'Capitalist' system? Everyone is in the game for what they can personally get out of it, so good luck to them! After all, possibly the most famous of all of Thatcher's quotes was "There is no such thing as Society"   

Not a view with which I concur.

One of my major concerns at the moment is that Theresa May is beginning to look and act more and more like Thatcher on a daily basis. She makes some conciliatory noises akin to Thatcher's ("where there is despair, may we bring hope") opening remarks, and then proceeds to appoint more and more contentious far right members to her cabinet.

Kevin-W posted:

Suzy Wong posted:

MDS posted:

Suzy Wong posted:

and Hippo Head for England Manager?........

Still waiting on KevinW's views on that one. 

Guys - I would actually be quite happy of ol' Hippo took over. He would be an upgrade on Hapless Hodgson (who wouldn't). At least he'll know who his best team are, and play a system. It might not be pretty but it might also mean we were not humiliated on a regular basis.

Allardyce also gets the best out of mediocre teams, and the England squad, stuffed as it is with Spuds bottlers and assorted donkeys from Arsenal and Man City, is nothing if not mediocre.

Big Sam would definitely be an improvement on Hodgson.  I guess we wouldn't be very sophisticated and Andy Carroll's chances of selection would improve. A decision needs to be taken quickly. I think the first qualifier for the 2018 World Cup is in September.  

PS apologies to Don for briefly drifted off topic.

I don't think even Pep Guardiola could do anything with the basket case that is the England football team.

Richard Benyon MP         

          12^th July 2016

Dear Richard,

I am certain that you have been inundated with letters concerning our relationship with the European Union. I’m afraid this is yet another one but I do hope you have time to consider it.

I voted to Remain and am obviously disappointed that slightly more people voted to Leave.

I was extremely disappointed with the level of information provided during the run up to the referendum and the level of debate surrounding this most important issue. Media reporting was very poor as well.

I am somewhat surprised that virtually all of the leading proponents of the Leave campaign have disappeared such that we now have a Remainer, taking up the position of Prime Minister.

I had presumed that the correct way forward was:-

• For the Government to identify and investigate the key issues surrounding Leave v Reamain (the referendum being one of these considerations)
• For Parliament to debate these issues
• For Parliament to agree on an Act of Parliament (if appropriate) and then and only then
• For Article 50 of the Lisbon Treaty to be invoked and the Exit negotiated

I am somewhat concerned that the new PM elect appears to be moving forward without regard to the above protocol. Unless proper consideration is given to these matters, I fear we might make the wrong decisions, or make decisions for the wrong reasons. If so, we could end up in about 10 years time with a “Chilcot” Investigation recording that the Conservative Government of 2016 acted recklessly on the basis of lies and misleading information without properly challenging information received and without a robust debate.

The purpose of this letter is to ask you to press the Government to act responsibly, to properly and openly consider the best interests of the United Kingdom and then and only then, to move forward accordingly.

Thank you for reading this letter. Yours sincerely

Don Atkinson

The above is a copy of my letter to my MP (addresses removed) following the Referendum

I will scan and post his reply which, although appearing personal, looks a bit stereotyped.

An good letter, Don, if I may say so.  Your MP's reply doesn't seem to address your central point at all i.e. the importance of following a Parliamentary process in moving forward before submitting an Article 50 application and the dangers, akin to a Chilcot-type enquiry, if that is not done.

Mike

So, for all us "Remainers", I fear the foul deed is done !

"....their decision will be respected"

"....- or should I say the least worst arrangement"

"....ensure their jobs and livelihoods are impacted as little as possible"

"It is for the Prime Minister to decide when to invoke Article 50 of the Lisbon Treaty...."

"....and be led and staffed by the best and brightest from across the civil service."

"There are undoubtedly difficult times ahead....."

A voice from above said "Cheer up ! things might get worse !" So I cheered up and.........sure enough, things got worse!

MDS posted:

An good letter, Don, if I may say so.  Your MP's reply doesn't seem to address your central point at all i.e. the importance of following a Parliamentary process in moving forward before submitting an Article 50 application and the dangers, akin to a Chilcot-type enquiry, if that is not done.

Mike

 

Thank you Mike.

Frank F posted:

Don Atkinson posted:

So, for all us "Remainers", I fear the foul deed is done !

"....their decision will be respected"

"....- or should I say the least worst arrangement"

"....ensure their jobs and livelihoods are impacted as little as possible"

"It is for the Prime Minister to decide when to invoke Article 50 of the Lisbon Treaty...."

"....and be led and staffed by the best and brightest from across the civil service."

"There are undoubtedly difficult times ahead....."

A voice from above said "Cheer up ! things might get worse !" So I cheered up and.........sure enough, things got worse!

Well they haven't asked me to join the Team yet.  Can't beat Civil Service and EC experience. 

FF

Its going to take far more than one good bloke to sort this one out Frank.........

I still think you "Remainers" are as misinformed about what you are wishing to remain a part of as the Brexiters were in the run-up to the referendum. The only reason I don't think it will matter is because I have every confidence that the same wrong policies will prevail in any event, and the melt-down is likely to occur before you can invoke Article 50 anyway.

I have written about the state of the bond markets previously in this thread...and without rehashing what the bond bubble is, I will make mention of the fact that it is real, it is VERY dangerous, and it is an almost dead certainty to unravel...all it needs is the match to light the detonator, which will inevitably come.

That igniting event will very likely come from the Italian banking system. According to the WSJ, 17% of Italian bank loans are worthless; that is over $400 BILLION in worthless paper - you can wipe your arse with it. At the height of the 2008 crisis it was only 5% in the US banking system.

Naturally the elite cronies first line of defense is a bail out and stick it up the taxpayers' behind. Taxpayers bend over and grab their ankles so the wealthy bankers can be kept solvent and whole. But EU bail-in laws as they are currently written prohibit this...but look for Italian politicians to press ahead anyway because these banks failing will piss off many thousands of voters who are also shareholders of these banks and also hold their bonds.

If they do press ahead, it will undermine the entire EU banking regulation system. This probably has the Brussels Eurocrats drinking even more heavily than usual at lunchtime...because it opens the door for other EU countries to do likewise.

But not to worry...it's a damned if you do, damned if you don't situation, because if the Italian banks fail, it will spread like wildfire to banks in Spain & Portugal, because they all own huge quantities of sovereign debt. Italian banks are drowning in Italian government debt, If they implode, investors will drop Italian bonds like hot rocks.

French banks own roughly $300 billion of Italian debt. German banks have $100 billion worth. And Spanish banks have over $70 billion. I didn't see data on what British banks have.

What happens in Italy in the near future may change the future of the Eurozone forever. No one can say exactly what will happen to the EU, but I think a good bet is economic chaos.

Moral of the story: be careful what you wish for.

At least one British politician understood the system:

PS - same crap here in the USA, lest I be accused of only pointing a finger in one direction...we just have the best printing press, but eventually it too will fail to work. Eventually all fiat currency achieves its intrinsic value.

Hmack posted:

Dr Mark posted:

A very interesting post, and certainly one point of view. You may well be an 'Expert' in Economics, and more qualified to comment on these matters than I. However, I would like to comment on one or two of your specific assertions.

"The Brexit isn't going to cause your children economic woes",

This is a subjective assessment. Many 'experts' (and don't decry them simply because they are labelled as 'experts') believe that Brexit will cause us (those who live in the UK) and our children economic woes by the bucket-load. There are many reasons why I, with some regret and as someone who voted to remain, believe that Brexit will have both a short and medium term adverse effect on our economy.   

My point is whether or not you stay in the EU, the inability to pay future obligations is a lead pipe cinch already.  Nothing subjective about that, and Brexit did not change that...it will be a handy item to lay off blame when the inevitable occurs, because those who are responsible will never admit their culpability. When our pension is in the crapper it won't be because of the Brexit. That fox is already in the hen house and would be there if you stay or go.

There are also "experts" who are sounding the same warning , but most of them aren't spouting the "party line" so they won't get the exposure level in the MSM.

 

"it is the irresponsible actions of the central bankers (the so-called "experts")  and their lackey politicians from every political stripe that are going to lead to a real economic disaster".

We could argue about the merits of this particular view of our economic future. I certainly agree that the recent financial crises was largely triggered by the huge amount of collateralised debt, and the shady (or downright illegal) trading practices relating to these by people with influence in some of the large (primarily US based) banks (in particular 'Lehmans'). A large part of the problem was not simply that 'all bankers are evil', as some would have us believe. Rather, it was that many financial institutions simply did not fully understand the complexity, and the underlying risk profiles associated with these financial instruments. Since the crash, financial institutions have spent huge amounts of money investing in extremely complex risk analytics and assessment systems associated with derivatives and other extremely complex instruments in order that they have a much better understanding of all of the underlying risks to which they might be exposed by investing in these instruments.    

Let's see, they packaged debt that they KNEW was junk, sold it as investment grade, and then took the short position against the debt that they sold. No nothing illegal or unethical there.Then the common citizen got handed the bill, and NOT ONE banker went to jail.

And as for "all" bankers - it's the system. If you don't take the big risks you won't keep your job...not that there aren't plenty of self-serving scumbags willing to gamble with other peoples' money in the banking industry.

 

"Because Draghi & Kuroda have stripped away all yield, investors are being forced to buy overvalued bonds that will never pay off"

No one is "forcing" investors to by overvalued bonds, or any other form of investment instrument for that matter.  

Don't be naive HMACK - it's not retail investors we're talking about here, the sum total of which are a relatively small part of the total action; it's the big investment houses, financial institutions,  governments, and the like can't stuff cash under their mattress - they HAVE to park it somewhere. That is why bond prices on anything with yield are being bid up to ridiculous levels.

Not to mention the amount of debt being scooped up by central banks - for example, the Bank of Japan has been buying ETFs that now leave it as a top 10 shareholder in most of the large companies in Japan - yeah, THAT ought to work out well.

Pensions have historically been built around a model that required around 7% return - which historically was quite attainable. Without that return, the pension funds are at high risk of insolvency. So the only way to get close is to take bigger and bigger risks.

 

"Ditto all these bond fund managers who will lose their jobs if they sit on cash".

Certainly not the case in the (responsible) financial institutions in which I have worked. I hasten to add that my work was in the IT field, helping to select and implement trading and risk analytic systems, and not as a fund manager, hence why I do not consider myself to be an 'Expert'.

You weren't dealing in the ZIRP/NIRP world. If these bond fund managers sit on cash they will get canned, as per the same institutional logic for the bankers. Where are they going to get yield? There is none.

 

"In reality they will just be stealing the money to buy their debt"

Another fairly contentious statement, and I am not really sure to whom your 'they' refers. But then, I could make the equally contentious and admittedly outrageous statement that - isn't this the obvious end-game of a 'Capitalist' system? Everyone is in the game for what they can personally get out of it, so good luck to them! After all, possibly the most famous of all of Thatcher's quotes was "There is no such thing as Society"   

"They" are the central bankers and their politician puppets. And as I pointed out in an earlier post, there is NOTHING "capitalist" about all this - if it were free market capitalism money would be priced . If it were capitalism many of the big banks would have been bankrupted. It's cronyism, or crony capitalism, or corporatism - whatever you like to call it, but don't call it capitalism.

When they FORCE us to buy "the safety and security" of government debt in our pensions, it will be nothing short of stealing the moeny - you can cloak it any way you want to make yourself feel better and believe there is a team of "experts" looking out for your best interests if that's what you need to be able to sleep at night, but I stopped the tooth fairy thing myself along time ago.

Not a view with which I concur.

One of my major concerns at the moment is that Theresa May is beginning to look and act more and more like Thatcher on a daily basis. She makes some conciliatory noises akin to Thatcher's ("where there is despair, may we bring hope") opening remarks, and then proceeds to appoint more and more contentious far right members to her cabinet.

I am not an economic expert - and don't claim to be - but I can read and I can do some math, and I can see what has happened before - I was in the mortgage industry from 2004 to 2007, and even when I started (I was also in the IT realm) I said to my coworkers that there was no way this was all sustainable. When the s**t hit the fan many of them contacted me (by that time I was back in school) and said "You said this would happen...how did you know?" Didn't take economics expertise - just common sense.

If it makes you feel better to lay it all on a the Brexit, that is your right to do so. Bu the EU is in HORRIBLE financial shape, and the banks are seriously under-capitalized - even DeutscheBank is in deep s**t...and Germany is supposed to be the economic powerhouse of the whole operation.

Brexit is the least of the economies concerns, other than it may be a trigger event for the whole mess, which is all but inevitable anyway. I think of it like Bear-Stearns from 2008 - they had a crisis, everyone panicked, bailout, the liars central  bankers and politicians gave the "all clear" (while holding secret meetings where it was openly acknowledged behind closed doors that the whole thing was a train wreck) and then Lehman imploded, and the rest is history.

And they have been lying about a bogus recovery for 8 years now - there has been NO recovery. If you lose your job and have no income, pulling out the credit card to stay afloat is NOT a recovery - everyone can agree on that. But when central banks and governments do it, people buy the bulls**t hook, line, and sinker.

Brexit is the least of your concerns - your concern is that the UK will do the same QE/ZIRP/helicopter money nonsense that the rest of the Western economies will. This debt is almost certainly going to wipe many regular folks out - and the ultimate irony is that when it happens, the sheeple will run and cry to the very same self-serving people who caused it to save them...after all, they're the "experts", right?

Don Atkinson posted:

most of them reply this way... beat around the bush... but dont get to the point.

8000 kms away from you - we have the same problem too

:-))

Yeah, every letter I have ever written to a congress-critter has been answered with a form letter that addressed NONE of the points I raised, other than it came from the correct pile for the overall topic. Basically: "I appreciate your concerns about X but I am going to do what I do because in actuality my only job is getting re-elected so I am following the money, and that ain't you. F*** you very much..."

DrMark posted:

Yeah, every letter I have ever written to a congress-critter has been answered with a form letter that addressed NONE of the points I raised, other than it came from the correct pile for the overall topic. Basically: "I appreciate your concerns about X but I am going to do what I do because in actuality my only job is getting re-elected so I am following the money, and that ain't you. F*** you very much..."

Most of us agree with you Mark, if not quite in such profane tones. The reason I posted both my letter and the reply was to illustrate it first hand, especially for those people who never quite get around to writing to their elected "representative". It doesn't achieve much, it doesn't even really relieve the pent up despair and disgust. But occasionally, it does seem to help.

Oh I agree Don - the only time it has an effect is probably if stuff comes in at such a level on a topic that he/she feels like re-election may be threatened...it is no exaggeration to say their only job is getting re-elected. This is especially true in the US House, where 2 year terms means fund raising & running for re-election will occupy the bulk of their time. A booklet just came out called "The Confessions of Congressman X" where a writer who has gotten to know a congressman wrote down all the off the record comments they shared about what being a congressman is really about:

Robert Atkinson, a former chief of staff and press secretary for two congressional Democrats, took notes on a series of informal talks with him – whoever he is – and is now publishing them with his permission.

Much of what's in the book will come as little surprise to Americans who are cynical about the political process. 

'Fundraising is so time-consuming I seldom read any bills I vote on,' the anonymous legislator admits. 'I don't even know how they'll be implemented or what they'll cost.'

'My staff gives me a last-minute briefing before I go to the floor and tells me whether to vote yea or nay. How bad is that?'

And on controversial bills, he says, 'I sometimes vote "yes" on a motion and "no" on an amendment so I can claim I'm on either side of an issue.'

We are all somewhat sceptical Mark.

Over here we have 5 year terms and the fundraising isn't so obvious or critical. Our local MP is reportedly the richest person in the House of Commons with a reported wealth of c.£110m.

On loosing an election, a previous MP will get some sort of gratuity and some sort of pension. But overall, yes, their primary task is to look after No1 by whatever means, foul or fair, but preferably not illegal.

mpw posted:

Don Atkinson posted:

most of them reply this way... beat around the bush... but dont get to the point.

8000 kms away from you - we have the same problem too

:-))

Yes, it does seem to be pretty universal