Malcolm Robinson

If Capello picked the best 'in form' team available there is something very wrong! The writing was on the wall in the group stages as none of the big stars shone, in fact they should have all been sitting with Becks as we fielded the under 21's! Rooney, world class, really, he looked tired and unfit. Steve G, has been out of sorts for most of the last season. Lampard, shouldn't have been on the pitch. John T, shouldn't have been there at all. We wouldn't even of had the 1 goal yesterday as I wouldn't have had Upson on the pitch after his previous howlers. So we picked a team made up of the old guard and they let us down. These are supposedly the cream of the professionals playing in football today, well their wage packets would suggest that! We now have to consider the strategy Capello employed and the fact that he put players into unnatural positions, even that isn't really an excuse for the simple errors made during the game! Hardly surprising we got turned over as soon as we faced a class team! Maybe some of those footballer star wages should be going into the English game at grass roots level.

There would seem to be some interesting murmurings concerning public sector pensions, an area I have long since held as the real elephant in the room! On the face of it these look as if the claimants have put the scheme together and in many ways they have! They are certainly out of sync compared with current private sector schemes where final salary schemes have either been stopped or members have increased premiums dramatically. It would seem the government want to use these very generous schemes to get savings in other areas? It looks very likely that if unions accept public sector redundancies and members pay in a little more these schemes will be continued. So that's around 9/10ths final salary index linked for life, sweet! We now have to consider the real costs and take into account the explosion in public sector employees over the last 10 years and not only that but the associated salaries as well! Gone are the days when public sector employees could claim they earn less during their working lives and see generous pensions as mitigation and as a reward for public service. I will qualify that statement however by saying the least paid in the public sector do have a legitimate gripe, but anyone above that level seems to have a pretty good comparable salary! I know there have been changes recently and that is why we have just seen a mass exodus of the great and good at NCC so they could claim enhanced packages but there are still some very real concerns. This is of huge concern to ratepayers in our county as almost half of all jobs in our county are in the public sector and the largest employer is NCC! With a pension deficit of over £430M just for our county, or over £3,000 for each household considering just the NCC figures, this is quite a burden for local tax payers to have to endure especially as we will see cuts in our services and no doubt rises in rates bills! Looking at the latest budget NCC only just got through and the £14-15M of cuts, now followed by an extra £10M imposed by central Government for this financial year, this will bring the aim of budget savings over this and the following 3 years to around £100M! This year we saw rates increases which amounted to about £2.5M and cuts which took us up to those totals and what happened to the NCC pension pot, we paid in £5M, or about twice what was raised in rates increases, so in effect we are having cuts in our services to pay for pensions in the public sector! Like charity, austerity begins at home!

Just how long ago was it that we were being told Mr B had saved the western world by a quasi Keynesian trick of fiscal stimulus? We now see nations rushing to implement more and more austerity measures and I would imagine that will be the focus of the up coming G20 meeting. Ah the heady days of being able to borrow what you liked, spend it on what you liked and defer the first payment until the cows come home! The Greek problem is a lesson and one we should learn with haste. Her bond issues are now yielding 10.49% , if they ever get repaid, good job the ECB will take them off anyone's hands! Portugal's bonds have edged higher by a full 1% in her recent auction too but there is a more ludicrous part of the system to consider. Portugal has to take part in the EMU bailout of Greece and lend at a nominal 5% rate. As her bonds are now 5.89% that will make a loss of 0.89% on every euro! BTW Germany at the same time will be lending at 5% and raising money at around 2.35%, can mere mortals get a bit of that action please!!!!! The ECB are now directly supporting the EMU banking sector, there is no more hiding behind talk of saving nation states! The increase in their lending to banks is way above any possible flim flam of political clap trap! Interbank lending is frozen and the ECB have stepped in to take the strain. The latest figure of E815B is almost double the last one of E480B with most going to Spain, Greece, Ireland and Portugal. This is in direct contravention of the ECB stated aim of reducing monetary stimulus! Trichet is going to need a spin doctor par excellence very soon! There is a very important date coming up, July 1st. This should be when the ECB dissolve its Long Term Refinancing Operation (LTRO) which was instigated at the height of the crisis to provide liquidity. It has pumped about E442B into the system to increase liquidity and said this would end on July 1st 2010. As there is a 3 month note ready to go I would hazard a guess that might not happen! We might feel we have been, or going to be, hit pretty hard in Osborne's budget, things could have been, or maybe still might be, a whole lot worse. The light at the end of the tunnel is a long way off!

How will our region fare..............

ps please don't come back with "oh i didn't say that!" I don't think he was exactly........seems to be only trying to be realistic within an emotive subject?

Happy Birthday..........

There would seem to be one or two sleights of hand which might not have been picked up by everyone in yesterday's budget. The main one being the change from RPI to CPI indexing. At a stroke of a pen any increases in welfare benefits, pensions and tax credits will now go up by the LOWEST government figure measuring inflation. The difference is around 2%! Considering RPI would probably rise much more as soon as we start to get away from a theoretical base rate of 0.5% this move not only saves money straightaway it also caps rises to a criteria already, in my opinion, corrupted by overtly political moves as the last government changed the basket of goods weighed in the CPI figures! I hope everyone knows the meaning of obfuscation! This move disproves any claim our new government has in claiming to protect the poorest members of our society and their claim the budget is tough but fair for everyone, as Vince the Cable is finding out, is only lip service. It was claimed state pensions will be protected but they too will be affected by these measures!

I know this is off topic slightly but I am getting really pXXXXd at the Yanks and the BP debacle! Yes it is a tragedy both in a humanitarian manner, due to the loss of life, and an ecological disaster but does that really allow for the overt Brit bashing we see from the likes of Congress and even the President? Yes they have to find a scapegoat but anyone with a gram of common sense would realise the last thing BP wanted was to see millions of gallons of its oil spewing out into the Gulf! One recent attack at that congressional hearing really stuck in my craw, as the Chair of BP was, by any sensible measure, accused of killing Americans! At the end of the day this was an unfortunate accident and I have one question............. How many Brits have been killed by premeditated 'friendly fire' from the Yanks? Maybe Haywood should have had George Galloway sitting next to him!

There have been many movements over the last week or two concerning the markets and the UK fiscal position. The new OBR came out with a report which on the one hand looked better than expected but on the other didn't include what it said it was going to. Osborne then came out with an extra hit on local authority spending to the tune of £1.165B, with the NCC share around £10M. Worth remembering this is on top of the £14-15M NCC has just cut out of this year's budget! The budget next Tuesday might well be more bloody than needed in an attempt to 'Ironise' the present Chancellor but if VAT is going up this will be the time when it comes into the open! The figures would seem to support Darling's case of a slight recovery in public finances........? Speaking of Darling I think history might well record a much better 'attempted' track record for him that his predecessor! Looking across the water it would seem that Greece is entering the end game. With most of the EMU ministers briefing that Greece and her bailout package would be OK it was left to the Russian finance minster to blow that facade away when he said it is now only a matter of time for Greece to restructure its debts! Greece is now issuing IOUs for government purchases so in effect there are now two currencies at play within Greece, how long before we see one failing? Spain looks to be paying the price the markets dictate as her bond yields go ever higher. How long before the Spanish bonds are rated alongside the Greek ones as junk status? The Germans are starting to rattle cages and even had Sarkozy retracting what he said only a month or so ago and bow to German pressure that EMU members could have punitive measures taken against them for failing to maintain EMU convergence criteria. I wonder if anyone pointed out that Germany is in fact in contravention to some of those criteria! Merve the Swerve added to his lacklustre performance of late with a statement saying that the BoE has always had the 2% inflation target in its sights and would do whatever is necessary to get the economy back on track. The fact that inflation has been above that figure for most of the last 3 years............. He also went on to say the BoE wanted to withdraw the fiscal stimulus ASAP and a rise in interest rates would be the indicator. If we are to believe the economy is in the recovery position is this the best time to start raising interest rates? The markets reacted immediately to that tit bit and long dated UK bonds went up 2.65%! Course having access to credit lines by business is the real issue not really one or two points of interest! It would seem Merve and his cronies whilst they enacted the QE programme have no real plan to exit the strategy!

AND: The Danish stastician Bjørn Lomborg is wrong to claim that the age of renewable energies is still far off. The changeover to a new power technology takes around 30 years. That was true of nuclear energy and it's also true of alternative sources of energy. In the last 15 years, wind power has advanced to such a degree that we expect it will be able to compete directly with coal, gas and nuclear power in the coming years, without subsidies. If engineers develop new storage methods to balance out the weather-related output swings, wind power alone will enable us to reach our national emissions targets. Biomass is also close to being competitive with convential sources of energy. The decisive factor is what happens to the price of fossil fuels. Biomass won't need subsidies if oil prices exceed $150. Its potential is only limited by the amount of land available to grow the crops necessary to produce it. In Germany, fuel, electricity and biogas from our fields will soon account for f5 to 10 percent of our energy output. By contrast, the use of solar power will focus on solar heating in the coming years. Inventions developed by German engineers are the envy of the world. But all the great inventions won't have an effect without an international emissions trading system. Only global emissions will lay the foundations for low-emission technologies to establish themselves everywhere on this planet. It is essential for our survival that we find the most effective and affordable way to reduce CO2. That's the only way we'll manage to halve CO2 emissions by 2050. Hasty, expensive and showy measures such as light bulb bans, photovoltaic roofs in foggy Germany or hydrogen cars won't help to slow global warming. By contrast, an emissions trading system covering all sectors and regions would automatically encourage economies to take the most efficient steps to prevent CO2 -- insulating buildings, modernizing gas and coal-fired power stations, and the widespread installation of heat pumps. Wouldn't it make sense to invest in photovoltaic systems and solar thermal energy plants in regions where the sun shines three times more often and the cost of producing power is therefore three times cheaper? European electricity customers would surely be more willing to help finance the ambitious Desertec project to produce solar power in North Africa. It would also make much more sense to finally start developing storage solutions for weather-dependent wind power. One idea would be to get a large fleet of electric cars on the road as quickly as possible. They could be charged up with low-cost wind-generated power at night, a time when much of the power generated by wind turbines goes wasted.

Thing is merc: (and I understand what you are saying!) ''In fact, a third of all the solar cells and almost half of all the wind turbines worldwide are today produced in Germany. The Renewable Energy Federation registered exports worth six billion euros in 2006 – an increase of 30% compared with the previous year. "The eco-industry is becoming a key sector in Germany. It is already a job creation engine,” says Roland Berger Partner Torsten Henzelmann. On behalf of the Federal Government, a team of consultants have compiled an eco-atlas of Germany that will be officially published at the EU environmental summit in June. The consultants surveyed just under 1,500 firms, all of them active in the environmental technology field, and analyzed a large number of studies. Their findings are rather gratifying: German green technology is creating jobs. "By the year 2020, the sector will employ more people than mechanical engineering or the automotive industry,” says Henzelmann. He makes a bold forecast: in a few years, the eco-sector will earn more money than these two traditional key industries together.''

What's this I read about the Germans having access to the World Cup new ball before anyone else!!!!!!! Now that's schadenfreude GGG!

A guy and a girl meet at a bar. They get along so well that they decide to go to the girl's place. A few drinks later, the guy takes off his shirt and then washes his hands. He then takes off his trousers and again washes his hands. The girl has been watching him and says: "You must be a dentist." The guy, surprised, says: "Yes .... How did you figure that out?" "Easy.." she replies, "you keep washing your hands.." One thing leads to another and they make love. After it's over the girl says: "You must be a good dentist." The guy, now with an inflated ego, says: "Sure - I'm a good dentist. How did you figure that out?" The girl replies:..... "I Didn't Feel a Thing."

A Newbiggin fisherman went to the hospital as his wife was having a baby. Upon arriving, the Nurse says "Congratulations, your wife has had quints - 5 big baby boys." The guy says, "I'm not surprised, I have a XXXXX on me like a chimney." The nurse replies, "Then you need to get it cleaned. The babies are all black!"

Merc, This is the new religion you are talking about, asking for empirical evidence....... I can see the sense in having say a solar source of power for certain things but that's all it will ever be considering our present level of technology. This was something I was looking at as a business idea but the equipment and ancillary work is far too complex at the moment. I don't think you can underestimate the level of support Gov and local authorities will be giving this initiative and that bias corrupts the fundamental economics of the situation. The macroeconomics might be compromised in the short term but there might even be justification somewhere along the line considering our dependence on fossil fuels.

I thought it was this.........

As for the footie, can someone please squat that bluebottle which is making all that buzzzzing every time a match is on!

Just been reading up on an area which I think is one of the most dangerous to our public finances, public sector pensions. I think the liabilities we have in them will come back to haunt us going forward. NCC has over £400M worth of deficit in this area! The State of New York needed $6B for its annual payment into their public sector pension pot and legislated that it could borrow that figure instead of tax payers picking up the tab directly. Now who have they borrowed the money from, the same pension fund that they will pay the money into??? This is too far fetched for a Brian Fix farce!

Right to the nub of the matter as normal monsta! I think the English 'All Stars' can only expect a result when they play the likes of Greece, going off last night's game! Give Lampard his return ticket now! Anyway back on track it might be worth looking at GGG's inflation building in the economy. Every single month of this year the 'official' figure has been over the targeted one and yet we still get the BoE and MPC saying inflation is only a blip? I wonder what they understand as long or medium term? Interestingly Barclays has done its own expectations for UK inflation and their report has just been published. In fact they have done this since 1986 so they do have previous! Their assessment is that we will see an inflation figure of 3.4% next May and 3.8% in two years. These figures whilst not outrageous are still well above the BoE target. Their 5 year projection is for an inflation figure of 4.1% so we see a rising trend in their assessment. The BoE's projections for next year were for 2.5%, which they published in Feb this year, however even their own latest figures suggest a rate of around 3.3% which they have only just published. One thing driving these figures are the input and output producer price figures and we have already seen the recent trends there with input figures of 10.5% and 13.1% for March and April this year and factory gate prices rising 5.7%. There can be no doubt inflationary factors are building in our economy and our exchange rate fluctuations and the likes of oil prices don't help! The MPC seem to be holding onto their 'output gap theory 'as a means of justifying their actions in 'looking through' temporary statistics. Time will tell if they are correct on that one but that in itself presupposes a larger unemployment figure and so a reduction in GDP! Anyone wanting to look further into this might like to look up 'Hedonics' and see just how manipulative Governments are being with their figures! There is one subtle factor to consider as well. Anyone else notice that some of our purchases, especially in food lines, are becoming smaller? That is to say manufacturers are reducing the size of their products yet retaining the price levels. That may be good for our waistlines and general health but it is in fact inflationary!

There would seem to be one more thing to consider regarding my last post and the German ascendency within the EU. The UK has been a natural buffer zone between Franco-German aspirations for the EU but now we see the UK concentrating introspectively on its own problems leaving the EU to follow the path with the strongest voice. Given the current situation and financial climate that will inevitability be the German way! The eastern members of the EU seem to be crumbling daily with Hungary and Bulgaria to the fore and this is after 2 years of IMF intervention in Hungary! No wonder Trichet wants to inflate the whole region with paper!

I can vouch for the coffee mugs.........

Trichet's got some answering to do today as he tries to explain ECB actions over the last few weeks and months. Might be helpful if we get to learn just how much the ECB has spent on ClubMed debt or in reality how much the ECB QE programme has cost and is going to cost! We have to look at what Germany is doing when considering the EMU members if not the whole of the EU. Being the paymasters of the whole EMU Germany does seem to have a right to start and dictate just how things progress? That would seem the path going forward as we consider the statement made by Wolfgang Schauble, German finance minister, who said there would be no bailout of Greece or any other EMU member if they could not sort their domestic finances out and indeed would face expulsion from the EMU! It may have been an overtly political ploy but he who pays the piper.......... What seems to have happened is that the cheap credit the Euro gave its members has been used in completely different ways between those same member countries. Germany used it to bed down the doubling of its population and invested in technical and economic infrastructure which is insulating it from the worst excesses of recession. ClubMed, as well as the UK!, seems to have used it to borrow and produce a ballooning public sector with associated benefits for that workforce. Quite a divergence, if only we had copied the German model and I can remember writing on this site years ago we should be watching the German model closely as the Wall came down and that population doubled overnight! With almost no other EMU member state now being able to compete with German technical and/or labour costs no wonder the Germans are finding their voices and starting to dictate the way the EU moves. Germany might not have a military expansionary policy now but it certainly has an economic one and probably owns most of the national debts hamstringing it neighbours! It is not unthinkable that we will see the northern EU member states using a new Deutsche Mark in the not too distant future!

Yes we are about to feel a cold blast of reality, especially up here in this region! The NCC 2010-11 budget only just got through with its package of cuts, now they are having to go back and find an extra £10M for this year, almost doubling the cut's package! We have already seen, this year, proposed closures of things like libraries, day centres etc which have been held off because of public pressure, I would expect them all to be chopped forthwith and many more as well! This is the legacy of ZaNuLab make no mistake about it! I said Mr. Brown wasn't a good Chancellor never mind PM but this will be on a whole new level! The new Gov will need to get deep cuts into place right now so they can pass the blame onto the last administration and deflect criticism to them. That might be a political play but its going to hurt! Thing is I don't expect the whole budget to be met with cuts so gird yourselves for some meaty increases in VAT, Rates and any and all indirect taxation! It looks a long way down before we can start the uphill process! BTW,GGG, with RPI at 5.3%, CPI 3.7% and base rates held at 0.5% looks like the MPC are trying to raise inflation levels? If this carries on they will debauch the currency and we will see your raging inflation! If the job of the MPC is to stabilise prices and in particular inflation, with a target of 2% how come the, supposedly independent, board haven't been sacked, they are clearly failing in their remit?

Addictive game......... http://www.lufthansa-vp.com/vp1/play.html

We need to watch events unfolding at the IMF. The recent call for an increase in collateral by the IMF for its members would seem a bit strange, even at this present time, given that it hasn't really stretched its present limits by any means. This can only mean one of two things, either its remit is about to change or they know something the rest of us don't. Mr Ghali, the Egyptian Finance Minister and the first official from an emerging economy to head the IMF's International Monetary and Financial Committee said, "If we are going to start including funds made available to Europe, then the IMF is not properly resourced,” he said. "We need to increase Special Drawing Rights very significantly. But we also need to shift the structure of resources from mostly borrowing and some Special Drawing Rights to mostly Special Drawing Rights,” he continued, adding that members had been talking about a doubling of the Special Drawing Rights allocation.'' This would seem to suggest that either they have used up their present financial allocation or they see a large increase in take up by countries of this SDR. They have about $110B available as of now and the largest ever loan was made to Greece and that was $30B so there should be around $80B available, why the call to increase? They are gold sellers at the moment and have sold about $6B worth of their gold reserves. They have around 3005 tonnes of the stuff! They have also negotiated loan arrangements for themselves within the G20 membership. So a pretty expansionist policy seems to be taking place and we have to wonder why? With a possible draw down facility of up to $1000B from a mix of streams the IMF would seem to have enough in reserves to meet most likely obligations going forward unless as I say they know something we don't!