A Really Good Sign for the Coalition 173


Yesterday saw a vital indictation of the viability of the coalition – and it was George Osborne who delivered an extremely good result.

Last week I blogged:

Next week, the EU Council of Ministers plans to adopt strict regulations enforcing transparency on hedge funds and private equity firms and limiting their leverage, ie how much they can gamble. NuLabour resisted these very sensible Franco-German proposals, because NuLabour was 100% bought by the City. The Tory right wants to oppose the plans because they are European regulations. Already we are hearing bleats that hedge fund managers will move abroad. Good. The attitude to these proposals will be an imprtant early indication of whether this government is more progressive than NuLabour.

http://www.craigmurray.org.uk/archives/2010/05/on_my_way_to_li.html

This is from the lead story on the front page of today’s Financial Times:

The approval of the controversial rules by finance ministers follows a similar endorsement by a group of EU lawmakers on Monday and brings regulation of the “alternative investment” industry closer.

Mr Osborne decided not to use up political capital in Brussels fighting to dilute an EU directive that has been ferociously pushed by France and Germany

end

More to the point, these regulations had been ferociously resisted by New Labour, just as Brown and Mandelson had ferociously resisted Franco-German proposals to limit bank bonuses and apply other brakes on casino banking. New Labour’s total defence of even the most extreme practices of most unacceptable faces of capitalism – hedge funds and private equity funds – was sickening.

It was notable in the election campaign that the Tories stance on banking regulation – in their manifesto, their rhetoric and the leaders’ debates – was much stronger than New Labour’s, and closer to the Liberal Democrats. There was room to doubt if this was just election populism. Osborne’s decision yesterday is a welcome sign that he Tories really are willing to take on City interests to which New Labour were slaves.

But the significance does not stop there. This decision also shows Cameron and Osborne are prepared to take on their own Europhobes. There will be fury from the combined forces of private equity millionaires and anti-Europeans, being poured down the lines into Conservative Central Office today.

Osborne in fact cleverly played the pro-EU card in the ECOFIN meeting and used his agreement to fund regulation to push forward the single market in financial services – something which has been disgracefully obstructed on continental Europe.

A friend of mine in UKREP Brussels tells me this morning that the view there is that it is great to have Ministers who do not confuse the interest of the City and the national interest as automatically the same thing.

And the icing of the cake for the coalition is that these very proposals for transparency and limitation of risk of hedge funds and private equity funds were initiated in the European Parliament by Lib Dem MEPs – led by my old mate Graham Watson.


173 thoughts on “A Really Good Sign for the Coalition

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  • wendy

    a really good sign would be that the uk will not be seeking further sanctions against iran .

    a really good sign would be that the uk along with the eu will now seek to break the siege on gaza.

    instead i suspect the only sign we will get is the uk encouraging the eu to follow in obamas footsteps.

  • NomadUK

    Something’s wrong here. I’m almost beginning to feel a sense of hope.

  • brian

    Please do not show hope or optimism in your comments or you will be shunned on this blog.

  • Anonymous

    This will be small fry in comparison to standing up to Israel, as per @wendy’s comment. But it is encouraging, and feels quite peculiar for the Tories – but not quite as weird as New Labour’s staunch defence of the City. Still, we should wait until it’s on paper – the lobbying strength of capital must not be underestimated.

  • Ed

    Mixed views on this.

    Firstly, glad to see Osborne is prepared to stand up to the Europhobe right. But I am fundamentally unconvinced this new Directive is at all meaningful in reforming the financial services industry.

    The idea that hedge fund leverage, for example, is in itself a source of instability and therefore needs to be regulated is highly debatable. The FSA has research out on this very topic, and the conclusion is that hedge funds are much less leveraged than people assume – their borrowings are typically 2 to 3x net equity, which is way less than banks for example.

    So I rather feel that this could have been political capital better spent currying favour with the Europhobes and holding the line against this Directive – because there will be more important EU battles to be fought, like new Directives on banking regulation, and he’s going to need the Duncan-Smith’s of this world in line for those.

    Maybe I’m wrong about how it all works, that you have slap the extremists early and hard to get them into line, in which case glad Osborne did what he did. But this particular Directive is so far beside the point in terms of reforming what’s wrong with the banking industry that it might have been a missed opportunity to give the Europhobes something to get excited about.

    Don’t much care what the City thinks about the Directive, but it’s hard to see what good it is going to do.

  • ScouseBilly

    Take a look at the markets, Craig.

    btw I am not in disagreement with your sentiments but please don’t buy that house for a while.

  • Owen Lee Hugh-Mann

    Whether or not these measures will do much to prevent a repetition of the current disaster, it’s at least a step in the right direction and shows that the Tories are more prepared to take steps against the City than New “Labour” ever were. Such was the extent of the deregulation and the ‘hands off’ attitude of the FSA under New “Labour” that Lehmans, Goldman Sachs et al used their UK based subisidiaries to carry out practices which were outlawed even in the home of free market deregulation, the USA. If the SEC bans something, it has to be particularly unethical and dangerous, yet the FSA, at Brown’s behest, complacently allowed such behaviour, (because it naturally attracted business from markets which had had the sense to ban such risky behaviour). Brown stubbornly continued to oppose all attempts to impose regulation on the banks even AFTER the crash. When you consider just how right-wing authoritarian and monetarist New “Labour” has become, it’s quite inexcusable how many Labour voters continued to blindly support the party at the last election, conveniently forgetting the Iraq invasion too. Given that Miliband, (or perhaps Miliband), is likely to become their next leader, it’s obvious that the party has learnt nothing from defeat. Cynically, they know they can probably rely on a backlash against the cuts to get re-elected rather than having to return to socialist principles and alienating their “filthy rich” friends in the City. If people simply stopped supporting political parties in the same way as they do football teams, democracy would be much improved, and New “Labour” would be condemned to the political wilderness until it realised it could no longer rely on the automatic support of its sheep-like core voters without having some socialist policies.

  • Ruth

    Surely the interest of the City and the national interest are automatically the same thing.

  • Freeborn

    It’s either self-delusion or incorrigible optimism to believe Osborne and Cameron mean to take on the bankers.

    The Rothschild synarchy (now calling themselves the Inter-Alpha Group) and the Anglo-Dutch central banking and fiat money system generally that has led us into debt servitude and warfare over centuries are the issues.

    Our survival as viable nation states depends on our willingness now to jettison fiat money and move to government issued currencies at the fixed Bretton-Woods exchange rates.

    John Hoefle is one of many US economists calling for a return to physical economy and the Glass-Steagle banking regulations set up under New Deal.

    http://larouchepac.com/lpactv?nid=14469

    Similarly Bill Engdahl has contributed many insightful essays at globalreseach.He also has his own blog.

    Don’t forget Gerald Celente either for gutsy,no frills economic commentary.

    Whatever research you end up doing you’ll know it’s been worth the effort when you can work out that the new coalition outfit here represents no threat whatever to the financial terrorists who got us in the mess we’re now in! (LOL)

  • lwtc247

    If you haven’t already done so yet, TAKE YOUR MONEY OUT OF THE BANK NOW!!

    Arriving for work at the U.K. Treasury last week, the incoming chief secretary, David Laws, found a note from his predecessor, Liam Byrne, offering advice on the job.

    “Dear Chief Secretary, I’m afraid to tell you there’s no money left,” Laws cited it as saying.

    Read more here:

    http://preview.bloomberg.com/news/2010-05-17/

    u-k-has-no-money-left-treasury-

    minister-learns-from-predecessor-s-note.html

    You’ll have to stitch the link together as I’ve broken it up to fit here.

  • Alfred

    Who cares what the hedge funds do or how much they gamble.

    The only public policy issue is to make sure that gamblers harm only themselves.

    What’s needed is a clear indication that the government will not bail the bastards out or the silly buggers who lend them money.

    What’s more the silly buggers who run the high street banks should not be allowed to invest in anything but triple A rated instruments. That would prevent them from losing depositors money on stupid loans to psychopathic hedge funds.

  • Alfred

    And before someone else points out that in fact the crap mortgage bonds that made Northern Rock a Wreck were all triple A rated, let me say that that raises a very interesting question. That those bonds were crap was widely known to the profit of many. Goldman Sachs were shorting them as they created them.

    So how come the rating agencies are still in business? Why has there been not class action suit brought against them? And how come the US government has done nothing to create a trustworthy rating system?

    My own guess is that the property boom in the US, Canada, Australia, Britain and elsewhere was a privatized stimulus programme, for which governments always knew they would eventually have to pick up the tab.

    And what was the purpose of the property boom? To keep the economy humming while not only low end manufacturing but also high-tech manufacturing, software development and financial services back office jobs were outsourced to the plantations of Asia.

    So what next? Massive money printing and currency devaluation against currencies of the export economies, which means importing inflation and a decline in the standard of living throughout the west.

    But at least the unemployed can draw some hope from this. When the pound falls to about ten thousand to the ounce of gold, the British worker will be almost competitive with his or her counterpart in Asia, though perhaps at a disadvantage in terms of experience and education.

  • glenn

    Alfred: It’s not a two-minute read, but Matt Taibbi lays out the case against Goldman Sachs very well in this article:

    http://www.rollingstone.com/politics/news/%3bkw=%5B3351,11459%5D

    The property, tech, stock etc. booms were all arranged by those best placed to take advantage of both the boom and the bust in every instance.

    A large part of the reason for the property boom, in the UK at least, was Thatcher’s dismantling the limits and safeguards on borrowing. That exploded the price of property, because everyone effectively had a much larger bid with which to compete with each other. “Gazumping” was unheard of before prices started rising so rapidly, that the value of a property leapt even between a sale price being agreed and the deal going through.

    Countries like Greece cannot just print money to inflate their way out of their debts, which Germany arguably did after WW-I, because they are tied to the Euro.

    Given the huge amount of money the banksters are taking from us, it’s pretty clear the rest of us are going to be worse off. This is a zero sum game, it’s not like they’ve found a way to mine an undiscovered deposit of cash.

  • tony_opmoc

    Don’t Underestimate the Intelligence of UK Judges.

    We once met one in India

    Of course they Know all about

    The War on Terror

    And the Politicians

    Our High Court Judges Are Not Stupid

    Unlike in The US, most of them are NOT Political Appointments

    I met mine in a swimming pool in Kerala. His wife and him went the expensive way, whilst we went the cheap way on a last minute bargain due to the “terrorism” or some other stuff…

    His wife was lovely – and he was O.K.

    They were Both Incredibly POSH and were probably wondering what they were doing swimming with us Northern Oiks – but they Were Incredibly Polite and Gracious…

    And we all appreciated it when Afternoon Tea was Served in the Most Old circa 1920’s Traditional Way with cakes and biscuits and all kinds of exquisite tastes….

    I doubt if this happens much in England any more except in extremely High Polite Society…

    Paul McCartney and the One Legged One had been there before us…

    And it was really nice.

    But what you need to realise is that these Judges have been dealing with Criminals all their lives…

    They have to find the TRUTH

    That is Their Job

    They Know ALL The Criminals in The Political System…

    But It is Not Their Job To Bring Them To Trial…

    That is The Job of Others…

    The INDEPENDENT JUDGES – which is most of them rather than the Few Political Appointments…

    Are Just Waiting To Do Their Job

    They Don’t Want it Outsourced To The Hague

    They Want Our War Criminals Tried in a Court of Law in ENGLAND

    They Want Justice Just as Much As I

    Even For The Scottish War Criminal

    Anthony Charles Lynton Blair

    Tony

  • anno

    US bank head-banger Elizabeth Warren says the whole US economic system has to be changed. Everything is anti-competitive, interest-based and wasteful.

    In my opinion, the only way out of the interest-blackmail deadlock is to ban all interest charges world-wide except for the essential costs of administration. Starve the bankers and the industries they prop-up. The Maggie theory of making people rich, in order to persuade them to divest themselves of excessive wealth in the direction of non-essential services and goods, is obscene.

    This country needs a thorough IMF thrashing to wean its wealthy from Maggie’s utterly immoral, market theories. The rich should be stripped of the rolls of fat they have embezzled in the last thirty years, to repay the deficit that has been diverted into their pockets.

    And what’s more, it looks like it’s going to get it. George Osborne will be eating even more humble pie very soon. If that’s good news for Craig, it’s good enough for me too.

  • tony_opmoc

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  • tony_opmoc

    anno,

    I personally tried what you are suggesting….

    Which was to give all my money away…

    No you don’t understand….

    I am not talking about lending it

    I am talking about giving it away – never expecting any return whatsoever….

    I not only gave all the money I had away, but I also gave it away to the extent of my credit cards…

    I couldn’t give any more away

    That was in 1985

    They wouldn’t let me go to work

    My Girlfriend Was Really Upset and Beat Me Up…

    Her Dad wouldn’t lend her any money – despite saying before “If You Ever Need Anything” – he would help her he didn’t….

    So she sold all the Jewellry Her Grandmother had given her before she died…

    So we could eat…

    And she Nursed Me Back To Mental Health…and I went back to work after 6 months and climbed my way back…

    But when I had given everything we had away….I felt like I was in Heaven….

    I hadn’t given My Girlfriend Now Wife away, and Just Possibly Our Money Given Away Saved The Lives Of Several Thousand People Starving To Death in Africa…

    I Did Try

    I Thought I was Perfectly Sane in a Mad World At The Time.

    So anno, are you going to lend YOUR money at 0% interest?

    Tony

  • tony_opmoc

    The original posted here around 4 am on Sunday morning has probably been deleted…

    But I couldn’t fucking believe it. The Rope Was over Half an Inch Thick and Should Easily Have Taken More Then Two Tonnes….

    My wife Blaimed Out Big Fat Fluffy Cat Millie…

    She said – she has been attacking that rope for the last 5 years….

    She uses it as her Scratching Post and Her Chewing Post after She Has Caught a Frog And We have Rescued It From Her Mouth….

    And Put The Frog Back In The Pond…

    Anyway I restrung it for £10

    15 Metres of 8mm rope – twisted 3 ply on the side that broke…

    With another ply supporting the existing old rope that didn’t…

    And My Mate Tested It Yesterday = Both of Us Swinging Whilst My Wife Was Watching and Doing The Commentary….

    He even played my New Guitar

    It Ain’t Broke Yet

    Tony

  • tony_opmoc

    Its extremely difficult to rebuild an old British Engine in an Old British Sports Car when You Are 22…

    So after my wife and I had got back from cycling round Richmond Park including Cycling Past Ian Dury’s Poets Corner…

    And we had Prepared The Evening Meal…

    I said – Can I Help You???

    And he showed me the problem – he was trying to get the New Cam Belt Back On After Rebuilding The Lower Part of The Engine…

    And he did that….

    Then he was trying to get the screws back into the Cam Belt Retensioner…

    And he did that….

    And all I could do was try and help and get my fingers dirty and try and use my strength to move it – but he is much stronger than me – and it is a really difficult job – needing both strength and nimble hands…

    When I was 22, I was under my sports car, and had given up trying to solve this problem move it – shift it – hit it – I simply could not do it…

    And I asked my 70 year old Dad…

    And he would crawl down in the muck and the Grease…

    And Just Do It…

    I think My Son Has Inherited His Grand Dad’s Skills

    They Both Amaze Me

    My Father Died Many Years Before My Son Was Born.

    I Don’t Know If Anyone Understands This.

    Tony

  • tony_opmoc

    Even when I am for example walking round B&Q looking for some paint…People come up to me and Say Hello Mate – How Are You Doing?

    And sometimes People Come To Me and Say Hello Toby Mate? _ How Are You Doing?

    And most of the time I have absolutely No Idea who they are, and don’t remember ever seeing them or speaking to them ever before in my life.

    I guess they think I am an old Rock Star…

    Strangely enough the same thing happens to my mate..but he goes out of his way to look like a Rock Star…

    All I did was not go to the barber for several years and dye my hair blonde.

    No it ain’t me

    David Coverdale lives in America the last I heard

    Tony

  • Alfred

    “…but Matt Taibbi lays out the case against Goldman Sachs…”

    Yes, and as Goldman Sachs were running the Bush White House and Treasury at the same time they were running the mortgage scam, the US government could not have not known what was going on, which means that the scam was government approved.

    And, asked Gregory (Scotland Yard detective): “Is there any other point to which you would wish to draw my attention?”

    Holmes: “To the curious incident of the dog in the night-time.”

    Gregory: “The dog did nothing in the night-time.”

    Holmes: “That was the curious incident.”

    Substitute Government of UK and other countries affected by the mortgage scam for “dog” and you can see why the scam must have been known of and approved by all governments.

    In Canada, the scam against the public has been executed more adroitly than in the US/UK by the simple expedient of having a Government agency (CMHC) buy the zero down 40-year amortization mortgages from the banks before they go bad. In fact, they have yet to go bad, although they almost certainly will, since house prices here, relative to incomes, are almost twice what they are in the US — and in Canada, unlike the US, mortgage interest is not tax deductable.

    http://www.greaterfool.ca/2010/05/13/crushed-in-calgary/

  • tony_opmoc

    This may have already been slightly edited by someone’s computer…

    Like when I wrote fucking it might appear as flipping

    I don’t understand why people try and water down what I try and say

    Why not just fucking delete the lot instead…

    It is also possible that he is talking complete bollocks and they were caught flipping on camera…

    But I thought

    I have done that….

    But they didn’t have CCTV cameras everywhere then….

    And She Was Selling Bedrooms

    And There were a lot of Beds that we thought needed to be Christened.

    But He Is Incredibly “Conservative”

    He Doesn’t Even Drink Coffee

    Tony

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    opmoc

    Joined: 18 Oct 2006

    Posts: 813

    PostPosted: Thu 20 May 2010 2 23 am Reply with quoteBack to top

    My Lad and his Friends have been doing this thing for over 5 years since the age of 16….

    And they have worked with over 100 different people

    And every year since they were allowed to do it as adults at the age of 18 and go and do an Aid Project in Ecuador for 6 weeks…

    They have continued going on holiday Every Year and Sometimes Several Times a Year…

    And They Are All Kids Sometimes Working Really Late…

    And Some Enormous Hells Angel Comes in – And Tries To Pass a Dodgy Note

    And there is little spotty kid looking back at him

    And he says sorry we can’t accept this…

    Have you got any real money?

    Because if you want it – you have got to pay for it with real money…

    And all these kids work together and they will not take any shit Off Their Customers

    Or Their Bosses

    Tony

  • John

    Just to point out that Brown made a habit of either pretenting to propose or indicatng he was going to accept proposals for progressive reforms, only to back out or delay at the last minute. Jack Straw had a similar habit. Let’s wait and see if Osborne actually follows through.

  • Iain Orr

    I was struck by Glenn’s use (his post above, addressed to Alfred) pf the neat neologism “bankster”. It probably shows that I don’t get out enough that is was the first time I’d heard it.

    Others may like to have this background on the suggested origins of the term (from urbandictionary.com):

    A portmanteau of “banker” and “gangster”, popularized by (among others) the economist Murray N. Rothbard, used by him to attack what he held to be the inherently fraudulent nature of Fractional-Reserve banking (as opposed to 100% gold reserve banking, which he defended as the only honest form of banking). Frequently used in reference to The Fed.

    In more recent popular usage, often refers in a vague way to the forces of “Wall Street”, or to those persons in the financial services industry who grow rich despite the continued impoverishment of those who depend on their services, and despite their apparent inability to succeed in business without constant government assistance.

    “The Fed is an organized cartel of banksters, who are creating inflation, ripping off the public, destroying the savings of the average American.”

    “The banksters crashed the economy, but thanks to generous federal bailouts, they won’t have to sacrifice their fat bonuses.”

    I’d have said that the appeal alsp comes from the similarity to “fraudster” and “shyster”. At least the English language has good resources for naming WASP crimes.

  • Ishmael

    They will be flogging off whats left of public enterprise to their mates for firesale prices. Libys, Tory, underneath the mask all the same. Cut corporate tax rates, while increasing personal rates. Yup the suckers are gonna get hit for more cash calls over that term. Is it not funny how the UK government acts like a plc. Is it a plc, is it bankrupt

  • Craig

    Tony Opmoc

    That really is it. Just one more stream of total irrelevance from your private life, double spaced to make it even more obtrusive, and you are banned for good.

    Really sorry, but I think I have been incredibly patient.

    As other commenters have frequently suggested, get your own blog for this stuff.

  • ingo

    well well, the Conservatives are realising which side the economy is buttered from, about time that they step back from their attack of Eurosepsis.

    The EU is at the cross roads though, too many hangers on who are unable to pay their way are sapping the strenght of the EU motors.

    The rightwing brigades throughout Europe are getting stronger and their messages will get more pronounced support at the next elections in Germany and France, they cannot afford to bail out those who are not prepared to shrapen their act, Greece is just a start.

    Lets wait and see what is being doen over offshore tax havens. Conservative estimates are running a close to 1 trillion that are bypassing the exchequer.

    Why rae we not demanding that companise produce were they sell, that they show social responsibilitiy of sorts?

    Doha has failed because of our inability to see the developing worlds arguments and needs, so anybody thinking of reviving these overarching restraints on the developing counbtries to trade, think again, thats passee, imho.

    Europe has to make some hard decisions if it wants to keep a steady course, investing in our own capacities, rather than multiplying dependencies on cheap far eastern manufacturing. Instead of globalising further, we have to move away from this free for all that has presented us with large multinationals, by fostering limited protectionism, making sure that we keep a self sufficiency of sorts, especially when it comes to energy and food supplies.

    I hope Mr. Osborne will say sorry for alledgedly calling Sarkozy a short gnome, now he’ll has to work with the guy.

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