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Showing posts from November, 2008

Brr... its global warming

The snow has come to Tallinn, and after a rather warm and not very snowy winter last year, the Estonians are hoping that this year will revert to the traditional cold, snowy and crisp season that allows people to ski most of the time.

This year we have even seen early snow in London. So, despite the undoubted issue of Carbon Dioxide emissions, we could still be in for a colder than average winter across Europe. Indeed, the global slowdown will certainly reduce the emission both of CO2 and heat into the atmosphere- and thus, as in the recession year of 1981, the reduction in the overall economic activity of mankind may notably chill the planet.

The inevitable reaction from many will be to ask: "What global warming?" and perhaps to dismiss the large body of evidence that suggests that CO2 emissions is a significant pollutant and is effecting major and possibly critical changes to the global climate. Of course, a cold winter will change the overall averages, but the data will sti…

The Liberal Principle

The return of Mandelson to British politics has certainly increased the shrillness factor. Despite pledges of bi-partisanship in "facing this grave crisis", within a few weeks we are back to business as usual. Despite the blatant culpability of Gordon Brown- "no return to boom and bust" now sounds like a slightly off-colour Carry-On joke- the Conservatives have struggled to inflict further damage on the Labour government.

There has been much discussion- not least amongst Conservatives- about why this could be. Some have pointed the finger at George Osborne. Certainly he has been guilty of some serious personal misjudgements- not least over the Corfu affair. It is also true that the timbre of his voice and his rather effete demeanour bring out the worst in even the least sensitive class warrior. Despite the fact that those who know him suggest he has an astute political brain, the fact is that he irritates a lot of people, including on his own side. Yet it it is what…

The disastrous miscalculation of Vladimir Putin

As I have warned over the past few months, Russia is being particularly badly hit by the global financial crisis. Partly this is a function of the severity of the collapse of commodity prices, especially oil and gas, which has had an exceptionally serious impact on a country where 85% of GDP relies on the extraction of raw materials. However the scale of the crisis in Russia has been hugely increased by a number of massive miscalculations by the Silovik state. Now the speed and scale of the Russian meltdown could conceivably become a threat to the stability of the Silovik regime itself.

As energy prices rose from their lows of a decade ago, the regime which took power after the resignation of Boris Yeltsin on New Years Eve 1999 made oil and gas the central plank of their economic policies. In a sense this was a natural thing to do, but from the Kremlin's point of view, it had several political advantages. Firstly, control over oil and gas was a lot simpler than controlling the comp…

The indiscreet charms of George Osborne

Much has been made in the British press of the comments by George Osborne on a future British currency crisis, what he called "having a proper sterling collapse, a run on the pound". Leaving aside- for the moment- the convention which Osborne has broken that opposition politicians do not talk down the British economy, let us examine what George Osborne is saying.

On Friday, Sterling hit a a six and a half year low against the US Dollar and a record low against the Euro. The immediate cause was a series of extremely gloomy predictions for the UK economy and the expectations, that despite the 150 basis point rate cut, there could still be further reductions in British interest rates. None of this, you note has much to do with UK government borrowing. However the risk of a run on the Pound that George identifies is based on the idea that the Labour government intends to make a significant fiscal stimulus, in effect following the Lib Dem line that significant tax cuts are now req…

And thats not all...

I see that some sections of the British media are tearing themselves apart because some survey has identified that some parameters of health care are better in Estonia than in the UK.

Well like... duh.

My experience of the Estonian health care system is very positive, while for chronic illness like cancer, they probably can not score better than Britain, since the number of patients is so small, there is little doubt that the flexibility of Estonian health care is better than in the UK. At my doctor's surgery in London I may call on Monday in order to get an appointment on Wednesday. I may not call earlier, because government targeting will not allow me to wait more than 48 hours for a doctors appointment. In Estonia I can call whenever I wish and an appointment is usually available within the same day or at the very least at a time at my convenience.

Of course the Daily Mail -which is particularly cross about this Estonia comparison- probably thinks that Estonia is a third world sta…

Yo-ho-ho and a bottle of Rum

The news that HMS Cumberland attacked and captured a Somali pirate vessel in the Gulf of Yemen was one of those slightly quaint pieces of news that is somehow rather cheering.

On the one hand while we know how desperate the situation is in Somalia and the autonomous Puntland, Pirates, by definition, are the bad guys. The seizure of the Ukrainian ship "Faima" and its cargo of weapons was clearly the last straw for the international community. The fact is that we can not allow global logistics chains to be disrupted like this. On the other hand, there is not the global political will to actually sort out the truly awful situation on the ground in the wreckage of Somalia.

Personally, I think it is about time to admit that Somalia as a state is not fixable. To my mind that means recognising the independence of Somaliland- the former British Somaliland- and allowing that country to develop more normal relations with the rest of the world. It is, after all a more or less orderly sta…

When Bloggers attack

I had been holding off blogging- partly because being located in two countries at once seriously limits your free time, but also because I had come to question the value of blogging.

This blog is not a particularly widely read one- although when it is running regularly it attracts about 5000 people a month. The big blogs, such as Politicalbetting.com or Iain Dale or Guido Fawkes attract hundreds of times more readers. The problem is that many of these readers seem to leave their brains at home. Guido makes a point of stirring, so we can hardly be surprised at the visceral response that his posts attract. Even Iain Dale likes to gently goad his political opponents. The biggest disappointment for me though has come from Politicalbetting.com. The current joke is simply to wait for a new thread and then post "first"- which I simply find irritating. The level of debate has become a lot more variable, and the level of vituperation and rank rudeness has grown stronger over time. The…

Understanding risk: why we are storing up even more trouble in the banking system

The last few years have seen a extraordinary consolidation in the global banking sector.

The rise of the global mega-banks has devolved global decisions onto a very small number of credit committees and a steadily smaller number of different lending policies. Many have argued that this has simply reflected the increasingly globalised economy, where corporations require a limited number of the banking relationships but still want to have access to large pools of credit and capital.

The ecology of the global banking system has become increasingly a monoculture.

The problem remains that the general view of what risk is is becoming broadly similar around the world, yet as we have seen in the repeated need for recapitalisation of different banks, this general view is wrong.

Now, we are seeing emergency rescue plans for the banks that involve yet further injections of equity capital, but this time, at the expense of the state and not the market. Meanwhile the proviso is that in exchange for thi…

The difference between may, might and will

Cicero does not believe in predicting the future- understanding the present seems complicated enough.

Journalists, on the other hand have no such scruples- they are quite happy to extrapolate to absurd conclusions and then print such conclusions as though they were definite fact. For example, for some time the conventional wisdom is that the UK and the Western world will suffer an obesity "epidemic". Now, leaving aside the idea that obesity could somehow be infectious, the numbers quoted for the overweight were generally forecasts, and were based on then-current trends. Usually the journalist would say something like "on current trends by X year 95% of us will be morbidly obese and as a result suffer from high levels of X", usually heart disease, diabetes etc, which are illnesses associated with obesity. Now, this story has become rather old and we now have stories that "obesity may have peaked". This is not a new story- it is simply the other side of the …