Malcolm Robinson

It would seem the markets are now testing the current EU resolve to 'help' Greece and actually pushing her into ECB/IMF arms. With Greek bonds now touching 9% the markets look to be saying what they want to take as any risk on her bonds and I don't think it will stop there as talks of cutting these figures unilaterally will mean investors wanting even more room to take any cuts. I would say we are seeing the end game for Greece to act independently as her leaders do not seem to have the necessary backbone to take the brave decisions. The only way left to them is to bite the hand off offered by the ECB/IMF but take the consequences as well. I wondered why Sarko was so willing to jump into the ring; the French are trying to pass a bill to allow nearly 4B Euros of Greek aid immediately. Looking a bit closer who is the largest shareholder in one of the Greek banks? None other than Credit Agricole with a 91% shareholding in Emporiki Bank, no wonder the French are so willing.............. they are protecting their investments! If we also look at who owns a lot of Greek paper we see Germany, Deutsche bank, with 8% of the stuff representing about 38.5B Euros. The problems the Germans have and one forecasted some time ago is that the main opposite party have just passed a motion saying they will not support any Greek bale out. This will have repercussions for Merkel. Who is going to be next in the firing line as markets test economic competence? At the moment the UK would seem to be overlooked but that will only last for so long. Of course as we still control our currency we can always start the printing presses up again if no one else will buy our bonds! I wonder what long term plans Brown and Darling have for the interest payments and redemption of the bonds they already own in the last round of QE? I think they are going for inflation to reduce the net worth of those bonds but that is something I will return to later. Spanish and Portuguese bonds are moving north too............with Portugal especially susceptible!

So sorry to hear this news........I would like to echo Vic's sentiments.

Just to show exactly how figures and statistics are being manipulated lets have a close look at the recent fall in unemployed claimant numbers. Headline figure was a 33,000 fall in claimants which anyone might think would mean that many people had found work. However if we look at the employed figures we see a fall of 43,000, can these two figures be in any way shape or form accurate never mind compatible? We are told there are margins for errors in any statistics but really. I will allow the fact that one is monthly and the other quarterly but why should we take either one as gospel? It looks to be the case, even after gross allowances for margins of errors, that one is cancelling the other and may really mean a flat pattern is emerging. It would seem our employed levels are around the 2005 levels which might give Monsta's favourite party political ammunition in their claim that economic immigration isn't needed? The number of inactive people, including students, long-term sick leave or people who have given up looking for work, rose 110,000 to 8.2 million, the highest recorded number for this series which began in 1971. So unemployment is falling and "inactivity” is continuing to rise, these are the more revealing figures and ones we should be watching closely to see how our economy is progressing as there might be a viable correlation between these two figures which is not in the other figures!

Quentin Hawkins Janis Purvis Carl Worrall Rebecca Worrall William Elliott Roger Armstrong Thomas Thompson Muriel Malley Margaret Finlay Kenneth Finlay So which one is monsta????????

While Greek politicians play their high stakes poker game with the ECB and the IMF, UK inflation figures came out showing a continuation of their recent upward moves. This is worrying because we cannot afford to have higher inflation than our trading competitors or we loose any advantage our currency deprecation might hold. The very fact that we seem to be well over the target figure month after month is again another reason to think the chancellor and PM are playing loose with monetary policy in the run up to the election! The fact is that the great and good (MPC)stated they expected to see deflation now not inflation and set interest rates accordingly. This has been shown to be a mistake in policy! Also considering all that QE money and how it was supposed to get the economy going again, well it seems to have held up the housing bubble and stock markets but very little else so again a clear policy mistake! 3 strikes and your are out Mr B! We now see rising inflation both for imports and exports due to in the main oil prices. The ONS have said Consumer Price Inflation (CPI) has risen to 3.4% up from 3% in February and as this is 1.4% over its targeted level but is mostly down to a rise in gas prices. Even if I did believe that, and ONS proclamations in general these days, Merve the Swerve should be hurriedly writing to the chancellor and explain why the MPC have it so wrong! As well as Consumer inflation we can see the Retail Price index inflation figures and they too are going upwards now at 4.4% as against 3.7%. As we return to normalised interest rates this one will rocket as this is the boyo with the mortgage rates included and when we stop subsidising the mortgage market.......... There would seem to be some real culprits in collusion within these figures. It seems pretty obvious to me that the Gov are deliberately putting out misleading information if not falsifying statistics. The recent change in the inflation weighted basket of goods would be clear evidence of that. At the same time we have the Monetary Policy Committee, MPC, clearly in the wrong time and time again with its policy and projections, why should we believe anything they now tell us?????? We have seen political interference in what was supposed to be a separated monetary policy unit taking those decisions out of politician's hands. An Independent Bank of England, don't make me laugh! We have seen changes made in financial instruments meant to measure inflation which can only be to disguise figures as a temporary measure. Our current inflation measure is 1.4% over target and our previous measure is 2.3% over target. Seeing as they are supposed to be measuring the same concept this is quite a difference but one might be politically more acceptable than the other!!!!!

Its actually one of the very few things which gave the UK some manoeuvrability during the financial crisis. If we had been in the Euro the BoE couldn't have ran the printing presses, not that I think that was a particularly good idea anyway but still...........

Empty vessels really do make the most sound................... Well done Monsta!

Ok Monsta, look what happened to the Northern Rock. When NR had liquidity problems (ran out of cash) people took their savings out of that bank and put them into different backs which they felt were safer. The gov had to step in and nationalise the bank in the end. Greek people with cash deposits are doing the same thing and taking their money out of Greek banks and putting it into say German banks, which they are entitled to do under several cross European treaties. They don't even have currency transactions to pay as they use the same currency. It will produce the same end result with maybe the ECB stepping in to 'take' over Greek banks. Either that or Greece will detach from the Euro and take a devaluation in her currency to get an advantage in Club Med trading terms. If they do that anyone who moved their savings into a German euro deposit will immediately gain by at least the percentage of the devaluation, and let's not forget ours was about 33%. Doesn't really help the underlying problem, much like the NR fiasco, but you can understand the reasoning, I would be doing the same thing!

In a latest twist to this Greek tragedy Reuter's news agency was reporting that the President of the European Central Bank Mr. Trichet was saying that Greek banks were in difficulties. "Despite the commitments expressed in the statements by the euro area heads of state and governments on 25 March and the Euro group on 11 April and the determination signalled by the Greek government to implement the announced adjustment measures for 2010, financial market tensions are persisting.” He goes on to say that the European Central Bank (ECB) and the national central banks are providing liquidity to the Greek banking system and that recent changes in collateral rules had removed the risk that banks would not be able to use Greek government bonds as collateral for loans at the ECB. The most revealing part of his statement, "Still the liquidity situation of Greek banks remains difficult and could deteriorate” For a statement from a President of a central bank this is important. It is quite rare for such a person to discuss the failings of his/her political masters but it is even rarer to discuss banks under your system being in difficulties and is quite a departure from his comments of only a few weeks ago! Taking a close look at what is happening on the ground so to speak in Greece we see there is a huge outflow of money, as we saw in our own NR scenario where people think the security of their savings is suspect. Normally in this sort of case that would mean moving money out of a country and converting it into a different currency, this time there is no need as Greek Euros are the same as German, Dutch, French, etc ones. If we use the NR scenario again we can see a run on a whole country's banking system not just a single bank! Again considering the UK reply to the NR situation where the national government guaranteed all deposits the Greek government cannot even do that as it doesn't have the final solution of printing more of the stuff to stem the flows. It might even be a good move for middle class Greeks if we consider there could be a Greek default and ejection from EMU which would produce quite a depreciation in whatever currency she used at least you would be hedged against it if your cash was in German Euros. This is what seems to be happening now the Greek people are voting with their feet, metaphorically speaking, and liquid deposits are moving north looking for security. Can Trichet do anything about this as this will in itself produce several problems? He could make the ECB responsible for a cross Euro deposit insurance scheme but that would again need the likes of Germany to sign up to even though the Germans will probably never need it. At the end of the day the ECB will have to provide as much liquidity as Greece needs, if any semblance of normality is to return, and the quicker Trichet admits that and tells the markets the better. Either that or Greek politicians find some backbone and take matters into their own hands for the benefit of their electorate!

Merlin, I am wondering if this has anything to do with the Gov saying every young, 18-25yr olds, as well as long term unemployed, will get a job offered? They are busy cutting jobs out of the public sector but those jobs are by and large still needed so fill them with cheaper labour? I am still at a loss as to how any gov agency can classify 4 streets as being different to those surrounding them? It really must be a post code lottery! Given this is the job centre we are talking about are there 4 streets in Bedders which have factories attached to them with no go lines painted on the roads to get to them from elsewhere? With the lack of localised job opportunities it would seem reasonable to assume most people travel outside of Bedders to work so what on earth is the different between streets? I would like to know how they worked this out.

Laffer Curve.

GGG, It's called Laffer Curve Theory where a graph is drawn with tax rates set against actual revenue raised. It is supposed to produce a parabolic arc with a high point signifying the optimum point at which tax rates should be set for income raised. Start with zero tax rates and the return is zero, at the other end put 100% tax rates and the revenue is zero again so somewhere in-between there are rates which will produce the biggest returns. Personally I think it more likely to have a lot of steps involved. I also think a 20% VAT rate will still be on the left hand side of the graph while a 50% income tax rate is probably on the right hand side.

On an entirely different tack nice to see the Vampire Squid (Goldman Sachs) finally being held to account. A very tenuous link might be that they advised the Greek government on entry to EMU and so must have played a major role in the misrepresentation of Greece finances! Seems just before the markets broke down GS was bundling up piles of toxic debts and advising clients to buy them while all the time taking hedged positions against the very paper the were selling to punters! Fraud would seem too polite a word in this case!

Well you take your eye off the ball for a couple of days and what the heck has happened with poor old Greece? Last time I looked they had just announced an ECB/IMF bale out package which the Eurocrats were hailing as a solution to Greece's problems. Greece 10yrs bonds are now 7.4% seems the market has pronounced judgement on the bale out plan! Looking a bit further for the reasons for this we see EU ministers refused to give any detail what-so-ever about this plan in year 2 and 3. Even the IMF didn't lay out any details for long term Greek solvency so at best this latest plan looks like a hobbled together sticking plaster! With the main proposal being a 5% facility for Greece but the fact that even this had to have agreement off the whole of the EMU membership at individual national level and time is pressing would seem even to me to be a major flaw in the plan. Greece needed positive unilateral action then, not even now, to stem her worries, what we will see going forward is anyone's guess. Course the politicos will blame speculators for trying to gain out of Greece's misery but in reality it is their inaction which has caused much of this mess. Even the Greek finance minister wrote to the European commission asking for dialogue on the assistance package which will only be needed if and when Greece deems necessary? There is a candidate for a mental asylum! Did he really think international investors would somehow believe the hype coming out of the ECB and let rates drop even to the 5% level? With an impending debt auction soon to get over the next few months Greece will be paying a heavy price for having such people at the helm. If Greece does sign up to this aid package there are still flaws implicit in the plan such as who will be in charge? Normally the IMF demands the reins and if that happens expect even more austery measures. With no real conditions or explanations as to how this plan will actually roll out little wonder markets are taking a differing view. All the while this dithering is going on the risk of contagion increases with Spain, Portugal and Italy all in the firing line as next targets. If markets decide to test resolve outside of the Euro we had better watch out as our figures are all in the range of decidedly 'iffy', our savoir would seem to be the size and variety of our economy comparatively. I cannot believe Greece has not formally asked for the implementation of this plan, if only to get at cheaper credit lines and being able to blame the big bad IMF for job losses and service cuts necessary in an imposed austery measure. The whole thing looks like it is down to poor leadership within the EU and Greece in particular. The Greek government has to start and take charge of its own affairs and protect its peoples, isn't that their defacto role?

I think this would make an interesting question at the next NCC Area Meeting which will be held at Bedlington. Your questions certainly need to be answered!

Sorry to hear that please pass on our best to Joe.

This has really got me spitting feathers!!!!!!!!!! I had to take my son and his girlfriend down to East Midlands airport yesterday for a 2pm flight. As soon as I saw the news I telephoned to ask if the airport was still open and planes flying. Get onto your flight operator they said. Course who was that, none other than the Irish Leprechaun, renowned for their tact and honesty with customers! So as my son's flight was not cancelled they insisted we had to check in. 3 hours later after driving 180 odd miles the whole dammed airport was almost closed down with no fights in or out! After standing at the information, a misnomer if there is ever one, desk then being told we had to use internet facilities to rebook a flight as the woman behind the counter would have to charge us for a new ticket if she did it???????? Another 3 hours drive back and UK airspace was closed down for the foreseeable. Why couldn't they just have said that in the morning and saved 6+ hours wasting time and fuel? If we didn't check in we couldn't exchange the tickets, which are now redundant anyway! Any politicians reading this will get my vote of they can sort out the current phenomena of big businesses charging people and then playing coy about any refunds! Sort it out Gordon Brown!

Well we have had the first of the political 'events' with more sound bites and spin applied than is really necessary. We do have the manifestos now to look though so let's look at the economics behind them and leave the hype to the leaders! There is the very real problem of UK fiscal debt which Vince Cable has described as the elephant in the room. With each of the main parties having about a £30B hole in their manifesto budgeting it would seem none are willing to be honest and willing to explain their spending pledges. At best they seem to be willing to discuss about £10b worth of savings but that isn't telling the whole tale by any means and will inevitably lead to a change in policy AFTER the election WHOEVER gets in. If we extrapolate the figures further we can clearly see the need for about £37B of real cuts to achieve even the present government's deficit targets by 2013/14. It would therefore seem that we are not being told the whole truth about public finances and will lead to a further loss of confidence, an already fragile confidence, in our elected leaders. Even the much lauded Vince Cable is complicit as he wrote the Lib Dem figures! One further small comment I would have is why are all the main parties committed to raising the foreign aid budget by £4B a year until 2013, surly it is now a case of charity begins at home? If we look over the last 13 years of a Labour Government, and remember this is just a fiscal overview, we can see they have raised the tax take by around £31B per annum but also raised public spending by a greater amount, even before the recent crisis, which now leaves us with a figure of 48% of GDP being devoted to public spending. Had this been applied judiciously we might have had other options now other than to 'pension off' a large part of that workforce, which by the very act adds to the economic burden the country must carry. In other words they have put money into public sector backroom jobs and salary increases instead of modernisations and front line services which now produces an economic imbalance. Adding to this tale of woe is the fact that the Institute of Fiscal studies has estimated that in its view there has been falls in efficiency of £42.5 billion over the period of Labour's tenure. Labours record of actually keeping its manifesto pledges is somewhat lacking in credibility shall we say and it's recent promise not to raise the higher rate of income tax then actually doing so would seem par for the course! The Conservatives have given rather patchy information about how they will 'eliminate the bulk of the deficit over the term of the next parliament'. They have said they will apply an 80%/20% formula with 80% being cuts and 20% increased taxes to reduce the structural deficit and give the same result as Labour about 1 year earlier. Anyone old enough to have gone through the last Conservative government might be interested to know that Ken used a 50%/50% formula. As with other promises by the other parties we have to ask how can taxes be cut when revenue into the treasury is needed, i.e., the promised scrapped of the NI rise. The Lib Dems would seem to have said they will be the highest raising tax party as a way of demonstrating their transparency. All well and good but looking closer we see the same flaws and holes in their proposals as the other two parties have! Some of their proposals look at first glance to be worthy of consideration as with the £10 grand starter rate for income tax. However looking to see how that will be paid for and applied would seem to be driving us into the realms of wishful thinking with phrases like, less tax avoidance and evasion? In conclusion it would seem we are being cajoled into thinking we are in a better fiscal position than we really are and cuts in services and tax rises will be modest. I hope no one is thinking that and we all realise very tough times lie ahead whichever party gets in. What is happening now is actually a disservice to our democracy not empowering it!

Looked far too contrived with all three offering platitudes which doubtless they will break as soon as the election is over. And I don't think Alistair had to be so OTT! Nick did pull something off, I think he looked and sounded smarmier than even Dave achieved! If these guys are the pinnacle of the political elite in our country, God help us, I wouldn't let any of them run a raffle. When any of them says, 'The British People' you know what you are about to hear is a condescending lie! I lost count of the number of times 'brave' was used when describing our troops, which just cheapened the content after the first one. Do we really need to be told that I would have thought that was a given. Take the prompts away, take the scripts away and let 'normal' people question them about stuff they know nothing about, like how much is a loaf of bread, how much does a pair of school shoes cost, how much is the bus fare for a 3 mile trip?

HOW TO CALL THE POLICE WHEN YOU'RE OLD AND DON'T MOVE FAST ANYMORE. George Phillips an elderly man from Meridian, Mississippi, was going up to bed when his wife told him that he'd left the light on in the garden shed, which she could see from the bedroom window. George opened the back door to go turn off the light, but saw that there were people in the shed stealing things. He phoned the police, who asked "Is someone in your house?" He said "No," but some people are breaking into my garden shed and stealing from me. Then the police dispatcher said "All patrols are busy. You should lock your doors and an officer will be along when one is available." George said, "Okay." He hung up the phone and counted to 30. Then he phoned the police again. "Hello,I just called you a few seconds ago because there were people stealing things from my shed. Well, you don't have to worry about them now because I just shot and killed them both, the dogs are eating them right now." and he hung up. Within five minutes, six Police Cars, a SWAT Team, a Helicopter, two Fire Trucks, a Paramedic, and an Ambulance showed up at the Phillips' residence, and caught the burglars red-handed. One of the Policemen said to George , "I thought you said that you'd shot them!" George said, "I thought you said there was nobody available!"

Amazing New Medical Tech A married couple went to the hospital to have their baby delivered. Upon their arrival, the doctor said that the hospital was testing an amazing new high-tech machine that would transfer a portion of the mother's labour pain to the baby's father, without the need for any physical connection. He asked if they were interested, Both said they were very much in favour of it. The doctor set the pain transfer to 10 percent for starters, explaining that even 10 percent was probably more pain than the father had ever experienced before. But as the labour progressed, the husband felt fine and asked the doctor to go ahead and kick it up a notch. The doctor then adjusted the machine to 20 percent pain transfer. The husband was still feeling fine. The doctor then checked the husband's blood pressure and was amazed at how well he was doing. At this point they decided to try for 50 percent. The husband continued to feel quite well. Since the pain transfer was obviously helping the wife considerably, the husband encouraged the doctor to transfer ALL the pain to him. The wife delivered a healthy baby with virtually no pain, and the husband had experienced none. She and her husband were ecstatic. - - - - - - - - - - When they got home they found their milkman dead on the doorstep.

Definitely.......... The house price bubble hasn't been burst yet.........

With the forthcoming election generally accepted as being fought on economic matters it is very worrying that so little detail of what will actually be done by any party winning the election has emerged. I would be far more willing to accept the harsh realties of what lies ahead instead of turgid half lies and whispered promises which only makes for a less than appetising choice at the ballot box. Speaking of which, and here I can accept the previous postings which really are regarding lack of choice, there doesn't seem to be anyone on the national stage who has the where-with-all to steer us through this self inflected moribund economic mess we are in. I can think of only two exceptions to that and one of them isn't going to be in the government and the other is only an adviser. Even Mr Brown has accepted the limitations of his party as he has stuffed his cabinet with non elected people! There will be at least 150-160 new faces sitting in the commons soon, and I think a lot more as people take out their frustrations at sitting and standing MPs, surly there might be a few who grasp the seriousness of the situation and have the capability of actually doing something about it. Course it is then the luck of the draw as we then have to consider if they have the right coloured ties on. This democracy we are so proud of is really just a sham!

Having now had a chance to look over this much heralded EU rescue plan there still seems more flaws than answers. The main on being the exact terms the IMF would intervene? Also as it stands if Greece were to ask for this money (from ECB) to be made available today each member state would have to ratify its part share in their respective parliaments and as we have seen from the Lisbon Treaty that is far from an assured deal. The markets seem to be accepting the 'talk' at the moment but will test EU resolve before too long! If as is being suggested the EMU states cannot be allowed to go broke then an EU bond with an average yield would seem to be the way to go. Problem here is that average yield would be in the order of upwards of 4% and as Germany can now borrow at around 3% why would she agree to that? That sad fact is that this latest 'bale out' plan is flawed and will come apart at the seems under scrutiny. The fact is that the Euro constitution has a no bale out clause for member states yet here we see almost total agreement on terms offered to Greece which can only be described as being a bale out. Yet another catch 22 for the EU! With no conditions publicised we can't even assess the prospects on how this might actually help Greece although I think it would have to be far more long term to have any real impact onto the Greek economy. We see the austerity plan supposedly reducing public sector deficits by 4% of GDP this year but there needs to be more and more cuts going forward to achieve EMU criteria. The Greek national debt is around 123% of GDP and as she cannot cover her debt liabilities that will increase even if she hits her austerity targets. Far too optimistic economic targets are being used to justify getting Greek bonds away on international markets and they will see though the figures soon if it hasn't done so already as Greek bonds are now BBB status as assessed by Fitch. Because she is replacing existing debt as it matures with higher yielding debt there is a millstone around the neck of her economy anyway. A carefully considered and quick response by the EU to this last point would have done much more to stabilise the situation, as it is we saw grandstanding Eurocrats thinking talk with no actions would calm markets. There is one final consideration to all of this and that is if the Greek tragedy has been averted which country might come under the spotlight for nervous international investors? If the EMU do come up with a solid plan for members that will take out Italy and Spain so which currency and economy will be getting shorted....... I don't think we have too far to look!

Well a 45 billion Euro facility should get Greece through the rest of this year but with no long term solution built in what happens next year? There are still some scary longer term debts for Greece so she is not out of the woods yet. This might move popular unrest to the streets of Berlin instead of Athens and cost Merkel one constitutional house. Raw material prices already moving upwards at this news and for that read oil and copper!