Mervyn the Moron ...Inflation Busters'R'Us .. or not as the case maybe in this global world of unexpectedly high prices which is due to Chinamen, er..
The Governor of the Bank of England Mervyn the Moron commenced his speech tonight in the most extrordinary fashion ...
"Can it really be only a year since we last met in this magnificent room? With the financial crisis continuing, I was tempted to deliver last year’s speech again."
Well up to a point Lord Copper , let us remind ourselves of Mervyn the Moron's wise words of wisdom last year ....
"Our central view remains that inflation will fall back this year as the rises in domestic gas and electricity prices last year drop out of the annual comparison, and the recent cuts in prices feed through to household bills."
"Yesterday" said Mervyn, sounding as though he had just discovered the world wasn't flat....."Yesterday we learnt that inflation in May rose to 3.3%." .. continuing in Economics 101 he added to the world class crop of bankers and toilers at the economic cliff faces of the City of London ..."increases in food and energy prices ......are caused by the pressure of demand on the supply of food and energy in the world as a whole." Well might he have added "Yesterday all my troubles seemed so far away ...."
He pursued Economics 101 and the Port moved on to the left (or is it the right?) "Where Bank rate will ultimately need to move to bring inflation back to target is impossible to judge now." (This is the MPC what goes up ...er.. might ..er. go down
What has slipped by King, Brown, Darling , Balls and his crew, is that the MPC is a one trick pony. It has one target, and one stick, no carrots. Living in a global world the much forecast, predicted and predictable huge rise in European energy costs (eg FCUKED) , the accompanying rise in grain costs as yearly stocks fell ,and living standards in the third world accelerated has hit us just as the money jugglers have destroyed our currencies.
Mervyn moved onto the UK Housing market ..."Banks are adjusting to the fact that many asset markets are unlikely to re-open in their old form and..." this on the day (see previous post) when the Treasury blithely state that the Northern Wreck debacle is going to cost the tax payer. £19.3 Bn by the time it hits the books and not £14 Billion as recorded just now. ..slight accounting adjustment you understand.. but then in Sir John Gieve you had an expert in adjustments to the books ...see below.
Asset markets won't re-open in their old form.. a new form has arrived in which the tax payer is shoring up God alone knows how many shaky balance sheets in the City through the Bank of England taking in any old iron as collateral.
Sir John Gieve ,Deputy Governor of the Bank of England.
It is with enormous satisfaction that we can report exclusively that the most incompetent living Civil Servant, Sir John Gieve has "stood down" from the comical role of Deputy Governor of the Bank of England following his previous comic turn at the Home Office.
It will be remembered that he rushed along his Minister's mistress's, nanny's visa so she could accompany his mistress on a foreign holiday. It was his wife who acted as solicitor to David Blunkett when THAT affair was examined - but no conflict of interest there then.
Sir John left the Home Office to appear magically (and without any banking experience whatever) at the Bank of England , John Reid described the Home Office as "unfit for purpose" and the Auditor General wouldn't sign off the Accounts.(The National Audit Office report 31st January 2006: Report of the Comptroller and Auditor General on the Home Office Resource Accounts 2004-05 (.pdf))It will also be remembered (seeing ID cards enter the public conscience and the Press again) that Sir John Gieve was unable to provide accurate cost estimates to the nearest £2 billion or so for the Identity Cards Programme which Sir John had significant oversight of, and over which he came to blows with the better informed London School of Economics.
The National Audit Office report :
Could not reconcile Home Office cash bank balances, to the tune of £ 3 million or so, but they "do not suspect any fraud"
The Adelphi computer system (about which the previous years NAO report warned them) appeared to be unable to deal properly with failed Bank Automated Clearing System payements i.e. a bog standard function of a large accounting system.
There were lax financial controls and insufficient audit trails.
Subsequent investigations showd that £946 million of "adjustments" had to be made to the accounts.
"To illustrate the scale of the movements: the amount owed to the Exchequer by the Home Office of £68 million in the September draft accounts became an amount owed by the Exchequer to the Home Office of £112 million in the December draft accounts".
Considering the present levels of leakage of secrets from Government offices it is worth while remembering what the much maligned Sir John Bourne said about security ..
15. Additionally, reviews carried out by the Home Office's Audit and Assurance Unit (the internal audit function) and by my staff revealed significant control weaknesses within the main accounting systems. The reviews found control weaknesses within key Information Technology applications including access to the system, inadequate segregation of duties, the creation of standing data and the ability to interrogate and monitor changes made. These weaknesses made access to the database by unauthorised staff possible, representing a risk to the integrity of Adelphi data and exposing the Home Office to a greater risk of fraud and error.
21. ...... Absence of checks made against Human Resources records to ensure that new users are authorised, and leavers are removed promptly; and
Absence of controls to detect unauthorised access to the database.
It was of course during Sir John's time at the Home Office that the loveable Beverley Huighes lost her job because the ome Office c ouldn't count up how many immigrants there were or weren't and the "scam" that continued for 18 months over the handling of migration applications from Romania and Bulgaria.
Sir John's fuck up at the Bank of England was, one has to say, as unlikely an event as say.... forecasting exactly one year ago ..."that inflation will fall back this year as the rises in domestic gas and electricity prices last year drop out of the annual comparison, and the recent cuts in prices feed through to household bills."
Mervyn the Morons Speech tonight is available on the BOE website here which is a bit easier than going to the BOE site and selecting About the bank > People> Mervyn King>Speeches by Mervyn King > select tonights speech
Odds on Sir John Gieve being ennobled soon ?
9 comments:
Bloomberg reports that U.S. housing starts are at their lowest level in 17 years. Housing prices are going down too, while consumer prices go up - both apparently at a faster and faster rate.
Producer prices in the United States rose 1.4% last month, following an increase of 0.2% the month before…annualizing the two months gives us a rate just shy of 10%.
Meanwhile, prices paid by producers were 7.2% higher than a year ago.
Worldwide inflation is about 7%, says Bill Gross of PIMCO. And since price inflation has now been globalized, there is no escaping. Here in Britain, consumer price inflation, officially, is running at its highest rate in 10 years.
"There is really nothing we can do about it," said an analyst at this morning's investment meeting. "We're a small island. We have to import things from overseas. Prices are rising everywhere. How can they not rise here? We're just at the beginning of this trend. It's going to get worse."
It is going to get worse everywhere. Inflation is in the pipes. Soon, it will be backing up in the bathtub drain and spilling over from the sink.
Why the fuck are the UK and Europe paying more per liter than anywhere else on the planet?
I ask again this time in English
Why the fuck are the UK and Europe paying more per liter than anywhere else on the planet?
This one's good...
Retail sales soar at record pace in May
"Retail sales soared in May by 3.5 pct, their fastest monthly rate since the series began in 1986 driven by record sales of food and clothes, in contrast to an expected 0.1 pct fall, the ONS said on Thursday."
The implication is that people have gone out and bought more stuff - rather than the possibility that they are buying the same amount or less stuff but are having to pay through the nose for it
I love this next par in the story quoted above ...
"The figures are likely to reinforce market expectations that interest rates will go up before they go down, despite ongoing concerns about a slowdown in growth."
Which mirrors mervyn the Morn#s observation last night " "Where Bank rate will ultimately need to move to bring inflation back to target is impossible to judge now."
This is the BOE Yo-Yo theory of fiscal mismanagement, what goes up can ...er...well er..might go down...up..well it will vary over time.Perhaps.
Depending on how things work out.
Probably.
Has anyone found Sir John Gieve's 'box on hedge funds'? (as referred to by Sir John during Minutes of Evidence taken before the Treasury Committee on Thursday 1 February 2007).
The BoE Deputy Governor for Financial Stability has however been busy giving speeches on subjects such as Sovereign Wealth Funds, the somewhat unregulated national funds who are bailing out some of the broke banks.
A dishonest banker
Posted by Eamon Brennan on June 19, 2008, 9:53:38
Mervyn King has warned workers not to ask for pay rises which match inflation because that would trigger an inflationary spiral.
Of course, the other side of the spiral is not addressed. Prices have already risen far above inflation but this is not a problem for Mr King. After all, with the rising costs of production it is obvious that prices would rise to protect profits.
The spectre of inflation is only raised by the governor when people try and compensate for the situation they find themselves in because of higher prices. He also makes it clear that lower profits are not acceptable because he insists that prices and interest rates (over which he is supposed to exercise control) would "inevitably" rise.
Bottom line according to Mr King. Banks and business can legitimately protect their incomes. People cannot.
One day people will look back on this and wonder how con-artists like King ever wielded so much influence.
"One day people will look back on this and wonder how con-artists like King ever wielded so much influence."
Not being afforded the luxury of hindsight I wonder today how a wanker like Mervyn the Moron gets AND keeps his job.
Intersting to note that darling Darling said last night that the appointments to the deputy Governer job is going to be "more transparent", and set up another fucking quango who will trouser a few quid to stay online and add another notch on their CV.
The depressing thing is surely that the commentariat have not taken the chance to look back to what the twat ( and his acres of double firsted economists etc.,)was saying 12 months ago.
" Banks and business can legitimately protect their incomes. People cannot."
Of course. Even heroes like Sir John Gieve will get a nice Non Exec post somewhere to ease their retirement on their modest index linked civil service pension, especially when he will be called Lord John Gieve of God Knows where.
The Financial Times has reported a 'tussle' at the BoE:
On Thursday (19/6/08) night dust was settling on recent arguments between the Bank, the City, the Treasury and the Financial Services Authority...
Much of the heat in the argument over whether Mr Charlie Bean or Paul Tucker would become the new deputy governor was dissipated by the decision of Sir John Gieve, the deputy governor for financial stability, to stand down early next spring.
Gieve's role at the BoE, in addition to his membership of the Monetary Policy Committee, was specific responsibility for the Bank's Financial Stability. His tenure was till 2011 but the FT told us that:
[Gieve] was told that his was a new job that needed a new deputy governor appointed after a public advertisement.
He was given the option of applying for the position or standing down. He chose the latter.
(as I compose this, the FT article are disappearing/revising….)
Seems that Charlie Bean has got the job (whether Gieve’s or not?) – the Telegraph reported on 9th June that the Bean/Tucker position was that held by Rachel Lomax (Alaister Darlings's mate)
Charlie Bean gained his Ph.D. at the Massachusetts Institute of Technology & was was visiting Professor at Stanford University.
Paul Tucker, on the other hand, was/is? responsible for: (i) the Bank's implementation of monetary policy via open market operations, the Bank's foreign exchange market operations, including management of HMG's foreign currency reserves, and related risk management....
There you have it....?
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