Watching the Osborne speech, at times the Chancellor appeared to stare at the auto cue with a fair degree of incredulity. Such is the danger of auto cue when ideas can be added at the last minute, even the Chancellor appeared bemused by some of the material. This must have been the case with the idea of credit easing. This is a new idea which no one, including the Chancellor, knows anything about. The project appears to suggest SMEs will issue long term bonds with a low coupon, packaged into a series of CDOs, AAA rated by Standard and Poors, bought by the Treasury, sold to the Bank of England and placed off balance sheet in a structured investment vehicle backed by a RMBS (Rumours of Monetary Backing Somewhere) then written off over thirty years.
The Labour attacks on government policy were so thin that Andrew Tyrie, the formidable Chairman of the Treasury Select committee decided to help out. Tyrie is unimpressed by the Big Society and the lack of a growth strategy, suggesting economic policy is inconsistent, incoherent, contradictory and at times irrelevant. Who would have thought? Tyrie has a point, why spend billions on a Libyan adventure and then try to save millions making 1000 sailors redundant?
According to Vince Cable, the world is in a difficult place. Plans are afoot to relocate to another part of the Galaxy, where the gravitational pull of sovereign debt on growth is much lower. The head of the World Bank warned the world is in a dangerous zone thus ruling out relocation within the Milky Way as a short term solution. The IMF World Economic Outlook produced a down grade for growth in the world and the UK. The elegant Christine Lagarde gets the terminology right suggesting the world is in a difficult phase. Here but not forever.
Tuesday, Gateway breakfast and the formal launch of SME club with Sir Richard Leese pressing the big red button to launch the site. Thanks to everyone who attended and helped the launch. SME club is an important development for our city, it is going to be huge.
Recent speeches from number eleven include back from the brink of bankruptcy, the march of the makers, ahead of the curve, offering a safe haven, on a rock of stability, masters of our own destiny,
executing plans designed in tough times for tough times, acting first like a tug of war team pulling in the same direction, then like a football team, playing in the right position. We will not win anything if we all charge ahead in the same direction, we would just let in goals at the back. Excellent.
Headlines, from the Sunday Times, Gordon Brown believed the financial crisis would be over in six months, the Governor, the lender of last resort, did not really want to bail out the banks (moral hazard) and Fred Goodwin brought panettone to the Chancellor as a quid pro quo for the bail out. Now there is a deal maker.
The claimant count gives cause for greater alarm. The unemployment measure provides a valuable signal as a coincident indicator to trends in GDP. As the chart demonstrates, inverting the claimant count and lagging by one quarter provides a high correlation and signal of trend. If the claimant count increases at a similar rate over the third quarter, the message is clear, growth is off track, the recovery is slipping away and the UK is heading back into recession.
According to a recent paper from the Centre for Economic Policy Research, periods of austerity and budget cuts go hand in hand with social instability and violence. Thatcher knew this. One of the first acts of the Conservative administration was to increase the resources and pay of senior officers in the police force and the army. Ominous but at least there appeared to be a plan.
Thursday, the markets crashed as fears of a double dip recession, US debt and prospects for the Southern states of Europe returned to top of mind. You know things are bad when Robert Peston appears on Newsnight. The day job, an end is nigh, sandwich board in Threadneedle street, cast aside for the evening.
Markets crashed, S & P down graded the US debt below that of Guernsey and the Isle of Man. Vince Cable and the Chancellor crowed about safe havens as ten year gilts fell below 3%. Safe haven maybe but capital flows are not reflected in an undervalued currency and the exit of US funds from the UK banking sector.
@GMTweetmap. This is the list which ranks the most influential twitterers in the Manchester. Not without some flaws since I appear to be ranked at #160. The list is changing all the time thanks to a real time scrape from Nick the geek alias Nick McCloud from Descartes and a nice design from Richard Hudson at Vanilla Storm.