Allot of things happening today, but it's all over the news so permit me to not post any news links. Here are some of my thoughts on some of the things today....
1. Michael Jackson has passed: Good God he will be missed. I am awaiting the news on the issues surrounding his death just like everyone else. I don't think it was foul play, but rather an unfortunate circumstance with him and his private doctor. We will have to wait and see. My condolences to his family and especially his children.
2. Madoff is in the hoosegow: THANK GOD! Bernie Madoff, has been sentenced to 150 years in prison- yikes- for investor fraud. His victims are overjoyed and so am I. Madoff had embezzled, among other victims, a 90 year + couple out of their life savings and their home. Sad. But, glorious day that he is gone for the rest of his life.....enjoy the prison showers, Uncle Bernie.
3. Plane crash in the Comoros: Another Airbus plane crashed in the Comoros, from Yemen. As you would remember, there was another Airbus plane that crashed earlier on in the month, from Brazil on the way back to France. I don't know if it's terrorism or is it just inferior design. A full investigation by European authorities should be underway.
4. Coup in Honduras: What? Yes, a coup in Honduras. The president is out, the equivalent of the speaker of the house in the U.S. is in. Apparently, corruption and the sort---blah blah blah! Apparently the ousted president, Manuel Zelaya, was a left leaning socialist who wanted a constitutional reform in the manner of Chavez in Venezuela. All power to have unlimited presidential terms. I see nothing wrong with it aside from the fact that these guys think that they will live forever. But, it does raise democratic and corruption issues with a leader who wishes to have the ability to stay in power for as long as he wishes....too much power, over too much time, is dangerous. I know!
That's it from this side of the world.
Youri
Tuesday, June 30, 2009
Monday, June 29, 2009
The Nationalisation to Privatisation quagmire!
With high premium on free markets and the virtue of privatisation, more countries are finding themselves controling private organisations than one would want to believe. Venezuela comes to mind. Belarus and in the Ukraine- both having severe economic challenges for differing reasons- have nationalised industries. The Saudi government as well as the other state owned oil companies in the United Emirates are also examples of nationalised industry that apparently will remain nationalised for quite some time.
This is not endemic to Eastern Europe, Latin America, The Middle East or other emerging or developing regions and countries. For example, the recent exercises in the U.S. and the U.K., leaves some gleeful in the notion that the great purveyors of private enterprise, have fallen victim to the trappings of easy pickings from the private market.
Currently, Citigroup and, more publicised, General Motors (GM), took U.S. Federal funding to stay afloat. GM is currently 60% owned by the U.S. government. In the U.K., Northern Rock, a mortgage lender, has been under public control since 2007 as well as the Royal Bank of Scotland (RBS), being partly controlled by the U.K. government, both due to their exposure to subprime debt. In fact, nationalisation fever has gotten so out of hand in the U.K., until they nationalised an entire country, The Turks and Caicos Islands, for all intents and purposes. I digress!
France, in contrast, has partial and predominantly state run corporations. The most observable of these are its transportation company, Regie Autonome des Transports Parisiens (RATP), the partially state owned France Telecom, where the state has 27% ownership and, in addition, the 85% share owned state energy company, Électricité de France (EDF).
The questions of why said companies- particularly with U.S. and the U.K.- were nationalised in the first place, is of little importance. But the issue that they will have to be privatised in the medium to near future is.
This presents the problem for the newly acquired public companies; how should government privatise, again?
This isn’t easy. For example, if GM were to be privatised too early, there is a chance that the U.S. may end up losing GM all together, because the company simply isn’t ready to compete against other car companies on its own; especially now after filing for bankruptcy.
In the U.K, re-distributing the government shares in Northern Rock would violate a tremendous property rights standing of the former majority share holders in Northern Rock, if it were not to be handed back to them, first and foremost.
To go even further, there may be a case where prolonged nationalisation can lead to a “French-style” government ownership of industry economy, with no exit plan, with the profitability of these enterprises in future dispute.
The best and most relevant examples of state owned to privatisation, to nationalisation to again privatisation, can be seen in Latin America during the late 1940’s to the 1990’s, especially in the latter years where there were sweeping changes in attitudes with regard to the virtue of private enterprise opposed to government monopoly.
A fantastic comparative study is within the telecommunications sectors' of Argentina and Chile. While these are by no means the only sectors' that were privatised in either country, the comparison bear fruit to the issue of the process.
Chile, on average, had a more successful privatisation experience, particularly with their telecommunications (Compania de Telefonos de Chile- CTC) liberalisation.
The process was marked by a very strong desire to not only privatise, but to also re-distribute resources to a greater share of the population- through various stock packages to employee's (labour capitalism), to further stock packages to indigenous investors and then to competitive bidding- through what ever capital market structure Chile had. The experience of the investor did not matter as much, over the actual sale through competition did.
More importantly, Chile focused on the actual regulations that promoted competitiveness, before concentrating on securing the profitability of CTC. In addition, the actual cost of running the organization, proved more valuable to the future profit of CTC than its price adjustments during.
With the latter, this is, primarily, due to the lower rates CTC had as a result of lowering them prior to private investment, which ended up with the buyer having the option to raise rates and at the same time presenting the consumer, with the opportunity to take advantage of lower rates, which resulted in less outrage from consumers upon privatisation, who would, possibly, be outraged with higher rates if the rate ceiling was left at the status quo during privatisation- this, coupled with the concept of labour capitalism, softened public outrage.
Argentina, on the other hand, had a much different privatisation process. While the Argentinean government ended up appropriating the consumer surpluses due to the privatisation, the end result was not optimal.
Similar to CTC, Empressa Nacional de Telecomunicaciones (ENTEL), was first private, then nationalised and then privatised again. However, the impact from the round of privatisation that occurred in the years1989 to 1991 made the process problematic, due to the emergency of their debt crisis in the 1990's and their consistently unstable macro-economic condition, which did result with the Argentinean economy crashing as an effect of their debt crisis in 1999-2002.
The privatisation of ENTEL did alleviate, temporarily, the national debt in Argentina through its actual sale and the government’s insistence on external debt papers. However, the sale was overshadowed by the more important need to regulate the industry pre-privatisation, in order to solve the issue of, now, private monopoly.
In comparison to CTC in Chile, Argentina did not use the capital markets to drive the sale. The bidding was closed to particular investors who fit certain criteria for running a telecommunications company. This limited the amount of bidding activity in the purchase of ENTEL and, subsequently, kept the actual sale price for ENTEL relatively low as compared to the pre-sale price. Also, laws enacted before the privatisation of CTC as different from ENTEL, made constant reimbursable contributions to the services under regulation and more importantly, allowed for domestic and foreign competition, as well as set rate ceilings to discourage private monopoly concentration.
To this date, there are six main providers in Chile, providing service to over 16 million inhabitants. While there are only two, from the privatisation and break up of the original ENTEL into two parts- Telecom Argentina covering the north and Telefónica de Argentina covering the south- providing service to well over 40 million inhabitants, albeit Argentina has several niche service providers.
Whatever the issues are currently for all that fit this crisis, the re-sale of entities after state intervention, to whom and for what purpose, presents a considerable challenge as it does with Northern Rock. In addition, the issue with regard to new regulations for the current financial system, should factor into the re-privatisation of Northern Rock and RBS, for the purpose of them being more efficiently ran companies, operating within a stable environment, where, at least from this aspect, systemic risk, or the fear of risk, doesn't envelope the sector.
On the other hand, direct and indirect industry partners in the supply and value chains would suffer greatly from the consistent attempt by the US government to be a player in the car manufacturing business. Prolonging state management can- in the long term by crowding out private investment- damage and penalise competitors, like Ford Motors, who had their challenges in the recent past and have pre-crisis, adjusted their business model to become profitable today.
It also shouldn’t be a question of whether or not the U.S. will be forced to sell nationalised companies, to pay off debt (over 82% of current GDP) where they clearly have the institutional ability to monetise that debt.
The issue of crawling back out of debt, particularly in the U.S., is an issue all to itself. The issue of re-privatisation, without question, is clearly with its own set of unique issues and challenges.
This is not endemic to Eastern Europe, Latin America, The Middle East or other emerging or developing regions and countries. For example, the recent exercises in the U.S. and the U.K., leaves some gleeful in the notion that the great purveyors of private enterprise, have fallen victim to the trappings of easy pickings from the private market.
Currently, Citigroup and, more publicised, General Motors (GM), took U.S. Federal funding to stay afloat. GM is currently 60% owned by the U.S. government. In the U.K., Northern Rock, a mortgage lender, has been under public control since 2007 as well as the Royal Bank of Scotland (RBS), being partly controlled by the U.K. government, both due to their exposure to subprime debt. In fact, nationalisation fever has gotten so out of hand in the U.K., until they nationalised an entire country, The Turks and Caicos Islands, for all intents and purposes. I digress!
France, in contrast, has partial and predominantly state run corporations. The most observable of these are its transportation company, Regie Autonome des Transports Parisiens (RATP), the partially state owned France Telecom, where the state has 27% ownership and, in addition, the 85% share owned state energy company, Électricité de France (EDF).
The questions of why said companies- particularly with U.S. and the U.K.- were nationalised in the first place, is of little importance. But the issue that they will have to be privatised in the medium to near future is.
This presents the problem for the newly acquired public companies; how should government privatise, again?
This isn’t easy. For example, if GM were to be privatised too early, there is a chance that the U.S. may end up losing GM all together, because the company simply isn’t ready to compete against other car companies on its own; especially now after filing for bankruptcy.
In the U.K, re-distributing the government shares in Northern Rock would violate a tremendous property rights standing of the former majority share holders in Northern Rock, if it were not to be handed back to them, first and foremost.
To go even further, there may be a case where prolonged nationalisation can lead to a “French-style” government ownership of industry economy, with no exit plan, with the profitability of these enterprises in future dispute.
The best and most relevant examples of state owned to privatisation, to nationalisation to again privatisation, can be seen in Latin America during the late 1940’s to the 1990’s, especially in the latter years where there were sweeping changes in attitudes with regard to the virtue of private enterprise opposed to government monopoly.
A fantastic comparative study is within the telecommunications sectors' of Argentina and Chile. While these are by no means the only sectors' that were privatised in either country, the comparison bear fruit to the issue of the process.
Chile, on average, had a more successful privatisation experience, particularly with their telecommunications (Compania de Telefonos de Chile- CTC) liberalisation.
The process was marked by a very strong desire to not only privatise, but to also re-distribute resources to a greater share of the population- through various stock packages to employee's (labour capitalism), to further stock packages to indigenous investors and then to competitive bidding- through what ever capital market structure Chile had. The experience of the investor did not matter as much, over the actual sale through competition did.
More importantly, Chile focused on the actual regulations that promoted competitiveness, before concentrating on securing the profitability of CTC. In addition, the actual cost of running the organization, proved more valuable to the future profit of CTC than its price adjustments during.
With the latter, this is, primarily, due to the lower rates CTC had as a result of lowering them prior to private investment, which ended up with the buyer having the option to raise rates and at the same time presenting the consumer, with the opportunity to take advantage of lower rates, which resulted in less outrage from consumers upon privatisation, who would, possibly, be outraged with higher rates if the rate ceiling was left at the status quo during privatisation- this, coupled with the concept of labour capitalism, softened public outrage.
Argentina, on the other hand, had a much different privatisation process. While the Argentinean government ended up appropriating the consumer surpluses due to the privatisation, the end result was not optimal.
Similar to CTC, Empressa Nacional de Telecomunicaciones (ENTEL), was first private, then nationalised and then privatised again. However, the impact from the round of privatisation that occurred in the years1989 to 1991 made the process problematic, due to the emergency of their debt crisis in the 1990's and their consistently unstable macro-economic condition, which did result with the Argentinean economy crashing as an effect of their debt crisis in 1999-2002.
The privatisation of ENTEL did alleviate, temporarily, the national debt in Argentina through its actual sale and the government’s insistence on external debt papers. However, the sale was overshadowed by the more important need to regulate the industry pre-privatisation, in order to solve the issue of, now, private monopoly.
In comparison to CTC in Chile, Argentina did not use the capital markets to drive the sale. The bidding was closed to particular investors who fit certain criteria for running a telecommunications company. This limited the amount of bidding activity in the purchase of ENTEL and, subsequently, kept the actual sale price for ENTEL relatively low as compared to the pre-sale price. Also, laws enacted before the privatisation of CTC as different from ENTEL, made constant reimbursable contributions to the services under regulation and more importantly, allowed for domestic and foreign competition, as well as set rate ceilings to discourage private monopoly concentration.
To this date, there are six main providers in Chile, providing service to over 16 million inhabitants. While there are only two, from the privatisation and break up of the original ENTEL into two parts- Telecom Argentina covering the north and Telefónica de Argentina covering the south- providing service to well over 40 million inhabitants, albeit Argentina has several niche service providers.
Whatever the issues are currently for all that fit this crisis, the re-sale of entities after state intervention, to whom and for what purpose, presents a considerable challenge as it does with Northern Rock. In addition, the issue with regard to new regulations for the current financial system, should factor into the re-privatisation of Northern Rock and RBS, for the purpose of them being more efficiently ran companies, operating within a stable environment, where, at least from this aspect, systemic risk, or the fear of risk, doesn't envelope the sector.
On the other hand, direct and indirect industry partners in the supply and value chains would suffer greatly from the consistent attempt by the US government to be a player in the car manufacturing business. Prolonging state management can- in the long term by crowding out private investment- damage and penalise competitors, like Ford Motors, who had their challenges in the recent past and have pre-crisis, adjusted their business model to become profitable today.
It also shouldn’t be a question of whether or not the U.S. will be forced to sell nationalised companies, to pay off debt (over 82% of current GDP) where they clearly have the institutional ability to monetise that debt.
The issue of crawling back out of debt, particularly in the U.S., is an issue all to itself. The issue of re-privatisation, without question, is clearly with its own set of unique issues and challenges.
Friday, June 26, 2009
US economy contracts by -5.5%!
According to the Bureau of Economic Analysis at the Department of Commerce.
Nothing to say here, aside from the green shoots are taking a while to sprout to full fledged trees!
A better synopsis was done by the FT.
I had up the output figures from last month which there was a larger decline from the month before. So, I have no idea as to why people can be suggesting that the economy is sliding at a slower pace? And, how can that reflect as good news for the American economy over all?
To top it all off, job numbers are still dwindling--even though I have taken into account the amount of jobs created as well.
I think the issue is in the "new economy"...away from industry and mechanical engineering jobs. Green tech and a bit of the old economy, construction and transport and, now, efficiency in transport, is what are possible drivers.
Will have a look at those numbers in a few. It's hard just to isolate green tech, but construction should not be so hard to find as it is already in the Industrial output figures and they are leading the push back to normalcy in the US economy!
Housing and Commercial property developments would help.
Nothing to say here, aside from the green shoots are taking a while to sprout to full fledged trees!
A better synopsis was done by the FT.
I had up the output figures from last month which there was a larger decline from the month before. So, I have no idea as to why people can be suggesting that the economy is sliding at a slower pace? And, how can that reflect as good news for the American economy over all?
To top it all off, job numbers are still dwindling--even though I have taken into account the amount of jobs created as well.
I think the issue is in the "new economy"...away from industry and mechanical engineering jobs. Green tech and a bit of the old economy, construction and transport and, now, efficiency in transport, is what are possible drivers.
Will have a look at those numbers in a few. It's hard just to isolate green tech, but construction should not be so hard to find as it is already in the Industrial output figures and they are leading the push back to normalcy in the US economy!
Housing and Commercial property developments would help.
Wednesday, June 24, 2009
Is Japan's problem China?
FT article.
I think the biggest issue with regard to Japan's economic woes are China. Everyone has been making hay over the issue of the US losing out on employment and being in debt to China, but the bigger issue may be Japan losing out on export- regional and international- to an increasingly powerful China.
At least the US had debt driven growth. Japan does not have the credit driven growth as well as their regional exports are taking a hit, as expected, due to China's increase in dominance over the region as well as marine fare.
I will have a glimpse of the statistics and give a comparison as soon as I get to it....a hunch, is what it is.
I think the biggest issue with regard to Japan's economic woes are China. Everyone has been making hay over the issue of the US losing out on employment and being in debt to China, but the bigger issue may be Japan losing out on export- regional and international- to an increasingly powerful China.
At least the US had debt driven growth. Japan does not have the credit driven growth as well as their regional exports are taking a hit, as expected, due to China's increase in dominance over the region as well as marine fare.
I will have a glimpse of the statistics and give a comparison as soon as I get to it....a hunch, is what it is.
Fed worried about inflation?
I think so. The latest Fed statement that they will keep rates where they are.
Well, the market did bounce a few months back. Oil shot up to over $70 per barrel. So, they may be trying to contain oil prices as they have said in the statement.
I hope this does not hamper strong and solid recovery!
Well, the market did bounce a few months back. Oil shot up to over $70 per barrel. So, they may be trying to contain oil prices as they have said in the statement.
I hope this does not hamper strong and solid recovery!
Tuesday, June 23, 2009
New UK House Speaker- Bercow!
I'm not clear on who the new speaker is, but the FT tries to give a few ideas.
Apparently, he is a 17 year career conservative--yes, tory-- who has been leaning left for the last few years. So much so, some on the tory side have called him a labour party member.
I don't know what it all means for Britain, but there certainly is an inside political shift that change will happen in the UK in 2010.
Brown and labour has, perhaps, given it up already!
Apparently, he is a 17 year career conservative--yes, tory-- who has been leaning left for the last few years. So much so, some on the tory side have called him a labour party member.
I don't know what it all means for Britain, but there certainly is an inside political shift that change will happen in the UK in 2010.
Brown and labour has, perhaps, given it up already!
Sunday, June 21, 2009
Another Iranian revolution?
Sweet tea and biscuits, Iran is going through another revolution. Perhaps if they adopt democracy, the revolution would not be so bloody and violent.
Here's my thoughts on the matter. For starters, Iran is ripe for democracy. Socially speaking, they are not hard line Islamo-fascists--albeit Ahmedi-Nejad portrays this- and their society does not have that long line history of Arab/anti-west and Judaism sentiment that the rest of the middle east carries; including Jordan and Saudi-Arabia.
The first revolution, to be fair, was not about religious revolution, but against the Shah of Iran at the time. Many people confuse the first revolution to that being towards a theocracy and that being the impetus. Fact of the matter is, as in many societies- including the western societies- religion and religious leaders, tend to be galvanizing forces that have the will and the courage to stand up against the establishment. With that, they are, by all intents and purposes, harder to assail than that of any other form of revolutionary agents.
The only two other revolutions which did not have even a hint of religiousity behind them, was the Russian communist revolution and the French revolution. Both were initiated by the proletariat at the time and the workers, who were tired of an autocratic leadership.
With the Russian revolution, the economic reforms stopped short at communism and the religious establishment, were silenced. With the French, the religious right were not exterminated as they were in Russia, but it remained visible due to their close relations with other western European countries who observed the Catholic church.
Even to this extent, France endured many years of economic adjustments and never maintained a system of pervasive autocratic inertia. On the other hand with Russia, they had entrenched a communist monopoly that fed itself to corruption and hence the miserable effort of the communist experiment.
Compared to what we have on the face of it in Iran, the religious leaders took their opportunity to allow them to believe that the revolution was all about religion. In fact, this was not the case and hence, this is why we see fissures within the personalities that once, all at the same time, represented the revolution in the late 70's.
Mousavi has capitalized on this sentiment and the hard economic times of Iran and has caused a consciousness to awaken in Iran, behind the premise that economic reform and adjustment must be taken serious. Something Ahmedi-Nejad has taken into account, but only from the standpoint of redistribution to the poor.
This is obviously not enough, as we have now playing out, a not so hard core Islamic anti-Western and Jewish culture in Iran, who have benefited from oil revenue in the past, who are not benefiting from it at this present time, to now, fissures within the revolutionary personalities of the 70's on the issue of increasing economic reform.
I think the lesson here is economic reform is continual. Gradual in some cases. But, economic reform must not stay stagnant and distribution, must go with liberalisation on the other hand.
Here's my thoughts on the matter. For starters, Iran is ripe for democracy. Socially speaking, they are not hard line Islamo-fascists--albeit Ahmedi-Nejad portrays this- and their society does not have that long line history of Arab/anti-west and Judaism sentiment that the rest of the middle east carries; including Jordan and Saudi-Arabia.
The first revolution, to be fair, was not about religious revolution, but against the Shah of Iran at the time. Many people confuse the first revolution to that being towards a theocracy and that being the impetus. Fact of the matter is, as in many societies- including the western societies- religion and religious leaders, tend to be galvanizing forces that have the will and the courage to stand up against the establishment. With that, they are, by all intents and purposes, harder to assail than that of any other form of revolutionary agents.
The only two other revolutions which did not have even a hint of religiousity behind them, was the Russian communist revolution and the French revolution. Both were initiated by the proletariat at the time and the workers, who were tired of an autocratic leadership.
With the Russian revolution, the economic reforms stopped short at communism and the religious establishment, were silenced. With the French, the religious right were not exterminated as they were in Russia, but it remained visible due to their close relations with other western European countries who observed the Catholic church.
Even to this extent, France endured many years of economic adjustments and never maintained a system of pervasive autocratic inertia. On the other hand with Russia, they had entrenched a communist monopoly that fed itself to corruption and hence the miserable effort of the communist experiment.
Compared to what we have on the face of it in Iran, the religious leaders took their opportunity to allow them to believe that the revolution was all about religion. In fact, this was not the case and hence, this is why we see fissures within the personalities that once, all at the same time, represented the revolution in the late 70's.
Mousavi has capitalized on this sentiment and the hard economic times of Iran and has caused a consciousness to awaken in Iran, behind the premise that economic reform and adjustment must be taken serious. Something Ahmedi-Nejad has taken into account, but only from the standpoint of redistribution to the poor.
This is obviously not enough, as we have now playing out, a not so hard core Islamic anti-Western and Jewish culture in Iran, who have benefited from oil revenue in the past, who are not benefiting from it at this present time, to now, fissures within the revolutionary personalities of the 70's on the issue of increasing economic reform.
I think the lesson here is economic reform is continual. Gradual in some cases. But, economic reform must not stay stagnant and distribution, must go with liberalisation on the other hand.
Thursday, June 18, 2009
Not so sweet deal...
The sugar deal for the Caribbean has just turned bitter.
The Caribbean is set to lose big time to African countries, who can produce sugar at a cheaper rate and higher output level.
The proposed prospect is on the heels of EU sugar reforms, which is set to see African producers gain significantly from this reform.
The details of such reform and why the African countries will fare better than the Caribbean countries is not available to me, but I would like to see it. If it causes this much stir, then its bigger than Caribbean producers ever thought.
The Caribbean has squandered its sugar production many years ago, in any event. They have acquiesced to Latin America and Cuba, in any event. Cuba may feel the sting, but on top of their being on the out and out with the western world, particularly the USA, they may find alternative means and be able to find other forms of suffering in Cuba.
The Caribbean is set to lose big time to African countries, who can produce sugar at a cheaper rate and higher output level.
The proposed prospect is on the heels of EU sugar reforms, which is set to see African producers gain significantly from this reform.
The details of such reform and why the African countries will fare better than the Caribbean countries is not available to me, but I would like to see it. If it causes this much stir, then its bigger than Caribbean producers ever thought.
The Caribbean has squandered its sugar production many years ago, in any event. They have acquiesced to Latin America and Cuba, in any event. Cuba may feel the sting, but on top of their being on the out and out with the western world, particularly the USA, they may find alternative means and be able to find other forms of suffering in Cuba.
Tuesday, June 16, 2009
Industrial Production still dropping...
FED G.17 Industrial Output report.
"Industrial production decreased 1.1 percent in May after having fallen a downward-revised 0.7 percent in April. The average decrease in industrial production during the first three months of the year was 1.6 percent."
I guess the green shoots don't manufacture!
"Industrial production decreased 1.1 percent in May after having fallen a downward-revised 0.7 percent in April. The average decrease in industrial production during the first three months of the year was 1.6 percent."
I guess the green shoots don't manufacture!
Monday, June 15, 2009
A New Financial Foundation: By Timothy Geithner and Lawrence Summers
Washington Post June 15th, 2009
A better alternative would have been to have the FED raise extra cash on its own, and then if it has to, bail out, nationalise (if need be) and re-sell (if it has to) banks that fail in the future--in addition to the capital requirements.
So, the conclusion that it led to a market failure, was correct, but, not because it took bankers away from the front office into more of a shadow banking system....that was as a result and made the issue more systemic and harder to unwind.
I guess its a start. I know the folks over at Fox Business and CNBC--because they are more radical than that of the guys over at Bloomberg-- they will pounce on this and make news hay!
This current financial crisis had many causes. It had its roots in the global imbalance in saving and consumption, in the widespread use of poorly understood financial instruments, in shortsightedness and excessive leverage at financial institutions. But it was also the product of basic failures in financial supervision and regulation.Yes, indeed!
That is why, this week -- at the president's direction, and after months of consultation with Congress, regulators, business and consumer groups, academics and experts -- the administration will put forward a plan to modernize financial regulation and supervision. The goal is to create a more stable regulatory regime that is flexible and effective; that is able to secure the benefits of financial innovation while guarding the system against its own excess.Sounds good, but what do you plan to do? (I know it will be laid out...LOL)
In developing its proposals, the administration has focused on five key problems in our existing regulatory regime -- problems that, we believe, played a direct role in producing or magnifying the current crisis.So, the idea is to raise more money to be fritted away? Is this a "government" regulatory plan, or a government backed private market plan? Also, it will work in the short term, but as soon as the market outstrips the public regulators, which can happen if it has not already hoodwinked them this time, then we will be back at square one.....I guess it sorts out the medium term.
First, existing regulation focuses on the safety and soundness of individual institutions but not the stability of the system as a whole. As a result, institutions were not required to maintain sufficient capital or liquidity to keep them safe in times of system-wide stress. In a world in which the troubles of a few large firms can put the entire system at risk, that approach is insufficient.
The administration's proposal will address that problem by raising capital and liquidity requirements for all institutions, with more stringent requirements for the largest and most interconnected firms. In addition, all large, interconnected firms whose failure could threaten the stability of the system will be subject to consolidated supervision by the Federal Reserve, and we will establish a council of regulators with broader coordinating responsibility across the financial system.
A better alternative would have been to have the FED raise extra cash on its own, and then if it has to, bail out, nationalise (if need be) and re-sell (if it has to) banks that fail in the future--in addition to the capital requirements.
Second, the structure of the financial system has shifted, with dramatic growth in financial activity outside the traditional banking system, such as in the market for asset-backed securities. In theory, securitization should serve to reduce credit risk by spreading it more widely. But by breaking the direct link between borrowers and lenders, securitization led to an erosion of lending standards, resulting in a market failure that fed the housing boom and deepened the housing bust.I'm not quite sure I follow that logic. Securitisation did spread the amount of money lost over a pooled group of funds and assets, but it necessarily didn't reduce the risk.
So, the conclusion that it led to a market failure, was correct, but, not because it took bankers away from the front office into more of a shadow banking system....that was as a result and made the issue more systemic and harder to unwind.
The administration's plan will impose robust reporting requirements on the issuers of asset-backed securities; reduce investors' and regulators' reliance on credit-rating agencies; and, perhaps most significant, require the originator, sponsor or broker of a securitization to retain a financial interest in its performance.The only great thing about this is making sure the broker takes a loss with this type of investment. This does not kill the ABS market, but it does increase liquidity and make people earn, the hard way, off of what they promote and keep the integrity of the product. But, more reporting is unnecessary and I guess its one of those socialist things President Obama would like to see....LOL...add liquidity on one side, but kill the market by forcing it to over report, losing its risk at the same time forcing it to lose out on innovation.
The plan also calls for harmonizing the regulation of futures and securities, and for more robust safeguards of payment and settlement systems and strong oversight of "over the counter" derivatives. All derivatives contracts will be subject to regulation, all derivatives dealers subject to supervision, and regulators will be empowered to enforce rules against manipulation and abuse.The same as above!
Third, our current regulatory regime does not offer adequate protections to consumers and investors. Weak consumer protections against subprime mortgage lending bear significant responsibility for the financial crisis. The crisis, in turn, revealed the inadequacy of consumer protections across a wide range of financial products -- from credit cards to annuities.How will this be done?
Building on the recent measures taken to fight predatory lending and unfair practices in the credit card industry, the administration will offer a stronger framework for consumer and investor protection across the board.
Fourth, the federal government does not have the tools it needs to contain and manage financial crises. Relying on the Federal Reserve's lending authority to avert the disorderly failure of nonbank financial firms, while essential in this crisis, is not an appropriate or effective solution in the long term.First off, I don't see why this would not be the FED. Also, if it were to be a government agency, wouldn't it be the FED? And, why would you want anyone else other than the FED overseeing this in the even this does happen again?
To address this problem, we will establish a resolution mechanism that allows for the orderly resolution of any financial holding company whose failure might threaten the stability of the financial system. This authority will be available only in extraordinary circumstances, but it will help ensure that the government is no longer forced to choose between bailouts and financial collapse.
Fifth, and finally, we live in a globalized world, and the actions we take here at home -- no matter how smart and sound -- will have little effect if we fail to raise international standards along with our own. We will lead the effort to improve regulation and supervision around the world.This is always the last point. And, if realistically doable, it is the first best option. But, because it is not, this scant acknowledgement is what it is....hollow!
The discussion here presents only a brief preview of the administration's forthcoming proposals. Some people will say that this is not the time to debate the future of financial regulation, that this debate should wait until the crisis is fully behind us. Such critics misunderstand the nature of the challenges we face. Like all financial crises, the current crisis is a crisis of confidence and trust. Reassuring the American people that our financial system will be better controlled is critical to our economic recovery.
By restoring the public's trust in our financial system, the administration's reforms will allow the financial system to play its most important function: transforming the earnings and savings of workers into the loans that help families buy homes and cars, help parents send kids to college, and help entrepreneurs build their businesses. Now is the time to act.
Timothy Geithner is secretary of the Treasury. Lawrence Summers is director of the National Economic Council.
I guess its a start. I know the folks over at Fox Business and CNBC--because they are more radical than that of the guys over at Bloomberg-- they will pounce on this and make news hay!
India dumping claims on China...
FT article.
It does have some merit. the FT article states that the dumping investigations would take up to 12 months. But, by that time, you would have already lost considerable market share as well as a good portion of your profits to China.
The dumping claims are with merit. In fact, labour costs may have gone down in China due to the downturn. Persons would rather work for $10 a day rather than nothing at all. This is the case for light and heavy manufacturing.
We can't forget Chinese cultural work ethic with regard to their output. While they may not work for free, they will work for little, compared to more jaded western workers who would prefer to wait it out with government checks or work in small service type non production jobs, as opposed to manufacturing without wage hikes in the short future or insurance.
It does have some merit. the FT article states that the dumping investigations would take up to 12 months. But, by that time, you would have already lost considerable market share as well as a good portion of your profits to China.
The dumping claims are with merit. In fact, labour costs may have gone down in China due to the downturn. Persons would rather work for $10 a day rather than nothing at all. This is the case for light and heavy manufacturing.
We can't forget Chinese cultural work ethic with regard to their output. While they may not work for free, they will work for little, compared to more jaded western workers who would prefer to wait it out with government checks or work in small service type non production jobs, as opposed to manufacturing without wage hikes in the short future or insurance.
Sunday, June 14, 2009
Netanyahu wants a limited Palestinian state...
Once he agrees that there will be a Palestinian state moving forward, there is nothing more to add that it is welcomed.
But, will the Palestinians accept this statement?
All of this, mind you, is on the backdrop of the Iranian elections. Ahmedi-Nejad won the Iranian elections, by 62% of the vote over his rival, [sic] Mouseveni.
Netanyahu, delivered this message about a Palestinian state at a major speech on Israeli foreign policy, where he discussed the issue among others--including the issue of how to deal with a, possibly, belligerent Iran.
In the meantime, protests in Iran are ongoing. The news is not reporting about the riots as much. But, from what I see and read, it is very intense. Persons opposite Ahmedi-Nejad have called the election a farce and Mouseveni, has called on the general council of Islamic Clerics- the real power in Iran- to recall the election.
I have my own theories, but it appears as if we will have more of the same form Iran, even though Ahmedi-Nejad has no economic plan moving forward and has not even hinted at easing up on some of the anti-western rhetoric.
But, will the Palestinians accept this statement?
All of this, mind you, is on the backdrop of the Iranian elections. Ahmedi-Nejad won the Iranian elections, by 62% of the vote over his rival, [sic] Mouseveni.
Netanyahu, delivered this message about a Palestinian state at a major speech on Israeli foreign policy, where he discussed the issue among others--including the issue of how to deal with a, possibly, belligerent Iran.
In the meantime, protests in Iran are ongoing. The news is not reporting about the riots as much. But, from what I see and read, it is very intense. Persons opposite Ahmedi-Nejad have called the election a farce and Mouseveni, has called on the general council of Islamic Clerics- the real power in Iran- to recall the election.
I have my own theories, but it appears as if we will have more of the same form Iran, even though Ahmedi-Nejad has no economic plan moving forward and has not even hinted at easing up on some of the anti-western rhetoric.
Tuesday, June 9, 2009
Why a sound succession plan is important for sustainable development.
A proper succession plan for your business has more of an impact than just the idea that your namesake will survive for future generations, but also its critical to sustainable development for the collective as well.
Through my experiences with numerous European CEO's working the western European desk at my former Management Consultancy (M&C), succession planning- especially as it relates to the wider economy and the social responsibility that comes with it- was something they were unsure of but not at all insouciant about. However, many understand it as obviously and absolutely vital.
Business owners tend to think of their businesses as singular to the frame of things. This is especially for family owned businesses, large or small. But, if you employ, at least, one person, whether directly or indirectly, you have an established multiplied impact on your social environment and it is essential that not only your business lasts through the duration of your life span, but that it can also see its way forward to another generation as people depend on it for their livelihood.
Let's be clear firstly; not everyone is cut out for owning and operating their business. Many talented people, need the support and/or respond to the leadership of someone who is control of an organization's direction. This statement can be evidenced very clearly when we take into account sport's figures, or entertainment mega stars who all have their own personal manager's or have in place management team.
Also, as people depend on your current services today to make their lives easier, they will in fact continue to need your goods and or services once you have stepped away.
Let's examine a scenario under an economic microscope!
Let's assume that there is a small community that has a car manufacturing plant and the plant is owned by a single owner with no heir. The plant employs 20 people and produces the only cars within a 50 mile radius of where it’s situated. If someone from the community would want a car not manufactured at that plant, they would have to travel 50 miles and incur all of the transport costs and intangibles.
Let's also assume that the other car manufacturing plant 50 miles away, manufactures cars at a higher cost compared to the one at home and is operating at optimum efficiency. They also produce 10% more cars with a lower labour head count of 15 as well as their comparative price mark up to that of the first plant is 25%. They also supply their community base comfortably and have half of the 10% of their cars that they create more than the first plant, to export.
If the owner of the first plant happens to close up shop due to the lack of interest, by some unforeseen incident, or by a lack of capacity of the other community individuals to operate that car plant, persons who depended on the car plant for cars would have to go to the next possible plant as well as persons who worked at the plant being out of employment.
Because of a lack of a succession plan by the owner, the individuals at the plant would have to find alternative employment; the consumers would have to purchase more expensive cars and; the community is losing wealth due to both- even though it may be ephemera.
Even if someone were to buy the firm, they have marketing and operational cost they have to absorb as additional overhead- having to advertise that the firm is going to be back in operation, the recruitment of new and old talent and training and re-training employee's to the new management structure. The new operator, in this case, loses value on his investment in the short term without the guarantee that the plant 50 miles away, has not found a way to get cars more available and cheaper to his domestic consumers due to aggregate consumers, investing solely in his car plant while making greater profit.
While this is certainly the way the cookie crumbles in the free market, this could have been avoided if company's board took it upon themselves to invest the time in instituting a succession plan, work at it and, in some cases, practice it.
There are three things with regard so succession planning an owner or CEO must bear in mind when thinking about securing the future of his or her organization post their departure.
The first is to start putting in place self governing management infrastructure, which is not dependent on singular person/CEO intervention.
Making sure your organization can run by itself, today, means that it will stand a better chance- or more viable if external buyers would want to keep it afloat- in the event that it has to run without its integral CEO.
With this regard, having a computerized inventory system connected to its point of sales with that balanced by automatic and verifiable deposits and with that deposit insurance, is very important.
A computerized- or an IT- system, does not have to be elaborate as Micros or a warehouse/supply chain management system. A system can be as simple as an EXEL spreadsheet, or as Microsoft has expanded its business packages in its 2008 MS Office version.
It’s not the system that is overly important, but the system as it relates to the person who will be using it and how they respond to working with this interface. Also, let your banker know the plans exactly.
Ensure that the people you have selected to succeed you, actually are interested in the development and maintenance of the organization and understand their role as the individual who's next in line.
With this, it’s always best to pick more than one person. Also, it is also a good practice to have those chief's in waiting, liberalise their duties to their next in line, to ensure a smoother organizational transition. This improves efficiency while training your staff at the same time.
Thirdly, practice an absentee scenario. Take a real vacation and leave clear instructions to the second who is the most advanced.
This issue can become problematic when the situation finds itself where a CEO, and not a sole owner, has to leave the keys to the store to his second in command who may want the top position. However, it's always up to the owners- or shareholders- to ensure that the second knows his position as well as has the capacity to step in, in the event the CEO takes absence.
This can be ascertained by short one on one's with the second about the company. In house company knowledge tests. As well as having the second prepare his or her own strategic plans for company development in addition to introducing the second to all of the key individuals in the supply and value chains.
These are, by no means, the only points to creating a succession plan. But, they are critically important as any other succession plan we can begin to conceptualize.
So, before you meet with the lawyers from your sick bed about your last will and testament, or before you speak to the accountants about a company liquidation or stock transfer, take it upon yourself to speak to someone at an M&C to ensure that you have the right succession plan; one that is relevant to your needs as well as implementable under real world settings.
It would only make your organization and community stronger in the long term.
Through my experiences with numerous European CEO's working the western European desk at my former Management Consultancy (M&C), succession planning- especially as it relates to the wider economy and the social responsibility that comes with it- was something they were unsure of but not at all insouciant about. However, many understand it as obviously and absolutely vital.
Business owners tend to think of their businesses as singular to the frame of things. This is especially for family owned businesses, large or small. But, if you employ, at least, one person, whether directly or indirectly, you have an established multiplied impact on your social environment and it is essential that not only your business lasts through the duration of your life span, but that it can also see its way forward to another generation as people depend on it for their livelihood.
Let's be clear firstly; not everyone is cut out for owning and operating their business. Many talented people, need the support and/or respond to the leadership of someone who is control of an organization's direction. This statement can be evidenced very clearly when we take into account sport's figures, or entertainment mega stars who all have their own personal manager's or have in place management team.
Also, as people depend on your current services today to make their lives easier, they will in fact continue to need your goods and or services once you have stepped away.
Let's examine a scenario under an economic microscope!
Let's assume that there is a small community that has a car manufacturing plant and the plant is owned by a single owner with no heir. The plant employs 20 people and produces the only cars within a 50 mile radius of where it’s situated. If someone from the community would want a car not manufactured at that plant, they would have to travel 50 miles and incur all of the transport costs and intangibles.
Let's also assume that the other car manufacturing plant 50 miles away, manufactures cars at a higher cost compared to the one at home and is operating at optimum efficiency. They also produce 10% more cars with a lower labour head count of 15 as well as their comparative price mark up to that of the first plant is 25%. They also supply their community base comfortably and have half of the 10% of their cars that they create more than the first plant, to export.
If the owner of the first plant happens to close up shop due to the lack of interest, by some unforeseen incident, or by a lack of capacity of the other community individuals to operate that car plant, persons who depended on the car plant for cars would have to go to the next possible plant as well as persons who worked at the plant being out of employment.
Because of a lack of a succession plan by the owner, the individuals at the plant would have to find alternative employment; the consumers would have to purchase more expensive cars and; the community is losing wealth due to both- even though it may be ephemera.
Even if someone were to buy the firm, they have marketing and operational cost they have to absorb as additional overhead- having to advertise that the firm is going to be back in operation, the recruitment of new and old talent and training and re-training employee's to the new management structure. The new operator, in this case, loses value on his investment in the short term without the guarantee that the plant 50 miles away, has not found a way to get cars more available and cheaper to his domestic consumers due to aggregate consumers, investing solely in his car plant while making greater profit.
While this is certainly the way the cookie crumbles in the free market, this could have been avoided if company's board took it upon themselves to invest the time in instituting a succession plan, work at it and, in some cases, practice it.
There are three things with regard so succession planning an owner or CEO must bear in mind when thinking about securing the future of his or her organization post their departure.
The first is to start putting in place self governing management infrastructure, which is not dependent on singular person/CEO intervention.
Making sure your organization can run by itself, today, means that it will stand a better chance- or more viable if external buyers would want to keep it afloat- in the event that it has to run without its integral CEO.
With this regard, having a computerized inventory system connected to its point of sales with that balanced by automatic and verifiable deposits and with that deposit insurance, is very important.
A computerized- or an IT- system, does not have to be elaborate as Micros or a warehouse/supply chain management system. A system can be as simple as an EXEL spreadsheet, or as Microsoft has expanded its business packages in its 2008 MS Office version.
It’s not the system that is overly important, but the system as it relates to the person who will be using it and how they respond to working with this interface. Also, let your banker know the plans exactly.
Ensure that the people you have selected to succeed you, actually are interested in the development and maintenance of the organization and understand their role as the individual who's next in line.
With this, it’s always best to pick more than one person. Also, it is also a good practice to have those chief's in waiting, liberalise their duties to their next in line, to ensure a smoother organizational transition. This improves efficiency while training your staff at the same time.
Thirdly, practice an absentee scenario. Take a real vacation and leave clear instructions to the second who is the most advanced.
This issue can become problematic when the situation finds itself where a CEO, and not a sole owner, has to leave the keys to the store to his second in command who may want the top position. However, it's always up to the owners- or shareholders- to ensure that the second knows his position as well as has the capacity to step in, in the event the CEO takes absence.
This can be ascertained by short one on one's with the second about the company. In house company knowledge tests. As well as having the second prepare his or her own strategic plans for company development in addition to introducing the second to all of the key individuals in the supply and value chains.
These are, by no means, the only points to creating a succession plan. But, they are critically important as any other succession plan we can begin to conceptualize.
So, before you meet with the lawyers from your sick bed about your last will and testament, or before you speak to the accountants about a company liquidation or stock transfer, take it upon yourself to speak to someone at an M&C to ensure that you have the right succession plan; one that is relevant to your needs as well as implementable under real world settings.
It would only make your organization and community stronger in the long term.
Monday, June 8, 2009
My apologies...
Yes. Condolences to the persons on board French flight 447 from Brazil to France and for their families. They have not found the wreckage as yet, but I fear for the worse as they have found bodies floating-- 15 more, the latest report has out.
Its a few days late for my word on this. But, better late than never. To be honest, I was watching- and still am- the news as it unfolds.
But, all we can do is pray that someone if found alive.
Youri
Its a few days late for my word on this. But, better late than never. To be honest, I was watching- and still am- the news as it unfolds.
But, all we can do is pray that someone if found alive.
Youri
It doesn't get any clearer than this...
European elections put forward centre right parties for the EU government. This signals something and its worse than socialism. This signifies nationalism. That in itself should be scary.
In the UK, the far right Euro-skeptic conservative party, the British National Party, in their first every European parliamentary win ever.
Perhaps this win may do them some good, where they would see some value from the system, rather than bash it from the outside. But, as it stands for living in the UK- with this climate- I'm glad I'm here and not there.
The mood about the economy has to be sour. Also, realistically gloomy as jobs are still drying up.
In the UK, the far right Euro-skeptic conservative party, the British National Party, in their first every European parliamentary win ever.
Perhaps this win may do them some good, where they would see some value from the system, rather than bash it from the outside. But, as it stands for living in the UK- with this climate- I'm glad I'm here and not there.
The mood about the economy has to be sour. Also, realistically gloomy as jobs are still drying up.
Saturday, June 6, 2009
When will there be an end?
I think its a good time for a late night rant.
When will all of this economic and financial crises end? I mean, I have crisis fatigue. With that, the longer it goes, the more afraid I get.
I listened to Neil Cavuto on Fox (yes I watch Fox news) and he was interviewing the finance officer of the newly government owned GM motors. She was totally out of it. It almost made Cavuto cringe. I felt a little sad and despondent myself. But, such is the new GM--perhaps GM at least can't get any worse.
Then there's the constant issued statements from the FED. One day their programme has worked, the next they are fighting inflation, the next the market rallied behind the FED, the other they claim that it's a suckers rally and that its not really to be taken serious.
The latest to add to this confusion, is that it appears that the individual FED chairmen for their districts--most notably the chairmen from the NY and Dallas FED Reserves-- seem to be making their own policy statements. Certainly this undercuts Bernanke...he has to find a way to tamp that down, as only he would take the blame if all else fails!
The Obama administration has gone silent. The latest round of silence from both the US and Britain, has been in the middle of what Angela Merkel- German Chancellor- had to say about the loosey goosey monetary policies that central banks have been undertaking as a result of this crisis.
History indicates that the Germans remain silent on allot of these issues. But, not this time as Merkel has warned that these inflated policies damage more than they do good--Germany is a very conservatively ran economy and they are the hardest hit EU and Developed Economy.
Then there is Japan. Need I say more. They seem to have bigger political issues than they do economic. When the Japanese decide on a long term Prime Minister, then they can add to the debate.
Youri
When will all of this economic and financial crises end? I mean, I have crisis fatigue. With that, the longer it goes, the more afraid I get.
I listened to Neil Cavuto on Fox (yes I watch Fox news) and he was interviewing the finance officer of the newly government owned GM motors. She was totally out of it. It almost made Cavuto cringe. I felt a little sad and despondent myself. But, such is the new GM--perhaps GM at least can't get any worse.
Then there's the constant issued statements from the FED. One day their programme has worked, the next they are fighting inflation, the next the market rallied behind the FED, the other they claim that it's a suckers rally and that its not really to be taken serious.
The latest to add to this confusion, is that it appears that the individual FED chairmen for their districts--most notably the chairmen from the NY and Dallas FED Reserves-- seem to be making their own policy statements. Certainly this undercuts Bernanke...he has to find a way to tamp that down, as only he would take the blame if all else fails!
The Obama administration has gone silent. The latest round of silence from both the US and Britain, has been in the middle of what Angela Merkel- German Chancellor- had to say about the loosey goosey monetary policies that central banks have been undertaking as a result of this crisis.
History indicates that the Germans remain silent on allot of these issues. But, not this time as Merkel has warned that these inflated policies damage more than they do good--Germany is a very conservatively ran economy and they are the hardest hit EU and Developed Economy.
Then there is Japan. Need I say more. They seem to have bigger political issues than they do economic. When the Japanese decide on a long term Prime Minister, then they can add to the debate.
Youri
Friday, June 5, 2009
What are they going to do about it?
The developing country group in the G-20 and the Cairns group struck back and condemned export subsidies for US Dairy products. The protectionist gauntlet is down and it will escalate into a free for all.
It's over. It's embarrassing to see the Doha Round and the world trading system, take a step back due to something the system was supposed to prevent. But, perhaps the cuts in the initial phases were too much and too touchy, politically, in the first place?
The US blames the EU for the first move on certain diary products and now, the U.S. is getting much of the blame for something they reacted to and well within WTO rules.
The CAP in the EU and their structural protectionist system, rooted deeply in their VAT denominated quota system, has outclassed the U.S. blunt protection system at its core.
When the U.S. gives support directly, the political positions against as well as the economic case against- built on structural dis-similarities- will always be against them and they have to use blunt protectionist forces.
Another blow for the Doha Round indeed!
It's over. It's embarrassing to see the Doha Round and the world trading system, take a step back due to something the system was supposed to prevent. But, perhaps the cuts in the initial phases were too much and too touchy, politically, in the first place?
The US blames the EU for the first move on certain diary products and now, the U.S. is getting much of the blame for something they reacted to and well within WTO rules.
The CAP in the EU and their structural protectionist system, rooted deeply in their VAT denominated quota system, has outclassed the U.S. blunt protection system at its core.
When the U.S. gives support directly, the political positions against as well as the economic case against- built on structural dis-similarities- will always be against them and they have to use blunt protectionist forces.
Another blow for the Doha Round indeed!
Thursday, June 4, 2009
Is it all over for Brown?
The FT is against Gordon Brown, it appears. FT Article
But, he really is in a battle for his political career. Jacqui Smith, home secretary resigned. Michael Martin, speaker of the house, has announced his resignation to come in effect by the end of June.
Both embroiled in a cash abuse and credit scandal involving public funds.
Worse than that, comments as of late from Tony Blair about his time in office- horrible time for reflection- hurts Brown more than it helps Tony Blair "feel good" about the steps and mis-steps he took as Prime Minister with his very aggressive second in command, Gordon Brown, now Prime Minister Brown, at his side.
To top it all off, David Cameron is all over the place taking photo's with everyone he can. The latest photo-op was with Joanna Lumley and the Gurkha veterans.
Nothing can save Brown or Labour. The only thing Brown can do is try to win his seat and not lose too many seats.
But, he really is in a battle for his political career. Jacqui Smith, home secretary resigned. Michael Martin, speaker of the house, has announced his resignation to come in effect by the end of June.
Both embroiled in a cash abuse and credit scandal involving public funds.
Worse than that, comments as of late from Tony Blair about his time in office- horrible time for reflection- hurts Brown more than it helps Tony Blair "feel good" about the steps and mis-steps he took as Prime Minister with his very aggressive second in command, Gordon Brown, now Prime Minister Brown, at his side.
To top it all off, David Cameron is all over the place taking photo's with everyone he can. The latest photo-op was with Joanna Lumley and the Gurkha veterans.
Nothing can save Brown or Labour. The only thing Brown can do is try to win his seat and not lose too many seats.
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