Robert Henderson and the Last Telly Debate

Another 90 minutes of evading the important questions by Tweedledom,Tweededee and Tweedledem. Gordon Grim was his usual dysfunctional self with  a particularly ghastly example of his I-am-an-alien-revealing  smile at the end of the debate, NuTory Boy was a little better than before although embarrassingly feeble when dealing with immigration and the leader of the Party for Adolescents Hello-I’m-Nick- Can-You-Identify-Yourself-Questioner-So-I-Can-Pretend-To-Be-Taking-You- Seriously was, well, very, very adolescent.

Yet again I was appalled by how badly prepared they were when it came to facts. The worst moments were when NuTory Boy was banging on about his proposed “cap” on immigration and Hello-I’m-Nick butted in with “Your cap won’t work because 80% of immigration to Britain comes from the EU”. This was seriously wrong as the majority comes from outside the EU. Not only was Hello-I’m-Nick not in possession of the facts, NuTory Boy wasn’t either,  because he did not contradict him but came out with a shriekingly feeble riposte about transitional arrangements for new applicants to the EU being Tory policy.  What NuTory Boy did not mention was that the most favoured  new entrants under a NuTory Government would be 60 million Turks.

The important issues which got no airing at all in the three debates were:

1. Devolution and especially the democratic deficit caused by England’s lack of a parliament.

2. The differential in Treasury funding between England the  Celtic Fringe with the Celtic Fringe getting per capita approximately £1,600 per head more than the England.

3. The countryside in general and farming in particular.

4. Why we have a military designed not to defend the country but to support NWO escapades such as the war in Iraq.

5. The amount of sovereignty lost to Brussels.

6. The amount of sovereignty lost through other Treaty agreements such as that of the UN Convention on Refugees and the European Declaration of Human Rights.

7. The Effects of the Human Rights Act.

8. The institutionalisation of political correctness through such measures as the Race Relations Amendment Act (2000)and its relentless promotion within our educational system.

9. The gross abridgement of our liberties through a raft of terrorist legislation.

Important issues which were raised but not discussed honestly were:

1. Immigration. None of the three parties admitted that while we were in the EU no meaningful controls could be operated. Clegg did obliquely refer to it by his false claim that 80% of immigration to Britain was from the EU, but did not explicitly point out that immigration was in effect uncontrolled. None of the party leaders was so vulgar as to suggest mass immigration might be an ill in itself.

2. Iraq and Afghanistan. There was no discussion of the futility of the invasions, their legality  or any suggestion a future British government would not do the same.

3. The economy. There was no serious attack on Gordon Grim’s overspending, the Tories support for NuLabcur’s “light touch” regulation of the banks and their ilk or the silence of all parties on the destruction of manufacturing.  Of the hypocrisy shown in the third debate none was more profound than their calls to increase manufacturing when all three parties have done nothing to prevent its destruction and often lauded the shift from manufacturing to service jobs.

4. Housing. This is the issue which more than ever poisons British economic life for it has become impossible for even those on above average wages to buy a house, massively  pushed up rents and removed security of tenure from most rented properties.

5. The falling standards of living through housing costs, petrol prices, the under cutting of wages and employment through the recession, off-shoring and immigration.

One response to “Robert Henderson and the Last Telly Debate

  1. Tony Hollick

    George Soros

    Financial Times, April 23, 2010

    The US Security and Exchange Commission’s civil suit against Goldman Sachs will be vigorously contested by the defendant. It is interesting to speculate which side will win; but we will not know the result for months. Irrespective of the eventual outcome, however, the case has far-reaching implications for the financial reform legislation Congress is considering.

    Whether or not Goldman is guilty, the transaction in question clearly had no social benefit. It involved a complex synthetic security derived from existing mortgage-backed securities by cloning them into imaginary units that mimicked the originals. This synthetic collateralised debt obligation did not finance the ownership of any additional homes or allocate capital more efficiently; it merely swelled the volume of mortgage-backed securities that lost value when the housing bubble burst. The primary purpose of the transaction was to generate fees and commissions.

    This is a clear demonstration of how derivatives and synthetic securities have been used to create imaginary value out of thin air. More triple A CDOs were created than there were underlying triple A assets. This was done on a large scale in spite of the fact that all of the parties involved were sophisticated investors. The process went on for years and culminated in a crash that caused wealth destruction amounting to trillions of dollars. It cannot be allowed to continue. The use of derivatives and other synthetic instruments must be regulated even if all the parties are sophisticated investors. Ordinary securities must be registered with the Securities and Exchange Commission before they can be traded. Synthetic securities ought to be similarly registered, although the task could be assigned to a different authority, such as the Commodity Futures Trading Commission.

    Derivatives can serve many useful purposes, but they also contain hidden dangers. For instance, they can pile up hidden imbalances in supply or demand which may suddenly be revealed when a threshold is breached. This is true of so-called knockout options, used in currency hedging. It was also true of the portfolio insurance programs that caused the New York Stock Exchange’s Black Monday in October 1987. The subsequent introduction of circuit breakers tacitly acknowledged that derivatives can cause discontinuities, but the proper conclusions were not drawn.

    Credit default swaps are particularly suspect. They are supposed to provide insurance against default to bondholders. But because they are freely tradable, they can be used to mount bear raids; in addition to insurance they also provide a license to kill. Their use ought to be confined to those who have a insurable interest in the bonds of a country or company.

    It will be the task of regulators to understand derivatives and synthetic securities and refuse to allow their creation if they cannot fully evaluate their systemic risks. That task cannot be left to investors, contrary to the diktats of the market fundamentalist dogma that prevailed until recently.

    Derivatives traded on exchanges should be registered as a class. Tailor-made derivatives would have to be registered individually, with regulators obliged to understand the risks involved. Registration is laborious and time-consuming, and would discourage the use of over-the-counter derivatives. Tailor-made products could be put together from exchange-traded instruments. This would prevent a recurrence of the abuses which contributed to the 2008 crash.

    Requiring derivatives and synthetic securities to be registered would be simple and effective; yet the legislation currently under consideration contains no such requirement. The Senate Agriculture Committee proposes blocking deposit-taking banks from making markets in swaps. This is an excellent proposal which would go a long way in reducing the interconnectedness of markets and preventing contagion, but it would not regulate derivatives.

    The five big banks which serve as marketmakers and account for over 95 per cent of the US’s outstanding over-the-counter transactions are likely to oppose it because it would hit their profits. It is more puzzling that some multinational corporations are also opposed. The only explanation is that tailor-made derivatives can facilitate tax avoidance and manipulation of earnings. These considerations ought not to influence the legislation.

    The writer is chairman of Soros Fund Management