In Brussels It's Always 3 Years Ago

Yesterday's speech from the European Commission President perfectly underscores Brussels' feeble grip on reality. 

Now is not the time, amidst multiple sovereign insolvencies - "a burning building with no exit" - to be debating (yet again) the need for a 'Tobin Tax' that might take effect in 2014. 

Now is not the time to be recommending legislation that might one day deliver greater centralised control. Nor is it timely - or wise, given the confessed lack of central control - to assert that solutions cannot be achieved by negotiations between governments. 

Surely, the EC President's role in such troubled times, if he ever really had one, was to do all he could with the structure he'd been given. Which would have included locking governments in a room until they did what was necessary.

Alas, that opportunity slipped by in 2008, if not before. "Europe" is an ex-parrot.

Even the news that German MPs have backed moves to bolster the Zerozone rescue fund is beside the point, as Satyajit Das explains in an excellent article today. The Zerozone central banking system simply does not have the capital to leverage itself, CDO-style, to the point at which the rescue mechanisms need to stretch:

"A 20 per cent first loss position may be too low. Unlike typical diversified CDO portfolios, the highly concentrated nature of the underlying investments (distressed sovereign debt and equity in distressed banks exposed to the very same sovereigns) and the high default correlation (reflecting the interrelated nature of the exposures) means potential losses could be much higher. Actual losses in sovereign debt restructuring are also variable and could be as high as 75 per cent of the face value of bonds."

We must get our heads around the fact that Europe's building will inevitably burn down.

So where will you be in 2014, Mr Barroso?

Images from Crisisboom and The Nation.

Labour Rolls Out The Porkbarrel. Again.

Forget "Fulfilling the promise of Britain" the most boring, leaden, ominous tag-line ever conceived.

Forget the dweeb whom the unions allowed to be "leader".

Dig a little into its shallow grave and you realise the Labour Party is still offering you... More!

Gordon Brown's former henchman, Ed Balls, says he "deeply regrets" that their last round of porkbarreling transformed Britain's economy into a complete shambles. Nevertheless, he insists he has some new "tough fiscal rules" for the future (remember Gordon's "Golden Rule"?) - indeed, Balls says he has a five point plan to give you More: 

1. More greed - if we aren't greedy for punishment we won't hire more civil servants, who won't become union members, who won't vote Labour.

2. More civil servants - because they tend to join unions and vote for the party most likely to grow the public sector.

3. More union members - because they control the vote at Labour's annual conference, the leadership and the party's finances.

4. More money - Balls says he would borrow more to pay for public sector growth.

5. More spending - to complete the vicious virtuous circle.

And here's where that takes you:

Okay, So How About A Mutual Europe?

Putting harsh economic reality aside for a minute, those who've always suspected that the Euro was a political Trojan horse for full fiscal European union must be highly amused by the current rhetoric.

The self-congratulatory political engineers of the European Union, like Jacques Delors, are lambasting their successors for ruining the grand plan. In their minds, monetary union and the Euro should have naturally led to complete union by now. That having failed, suddenly an enormous shared debt is suggested as the new political vehicle for the single market vision:

"To avoid falling, the choice looks straightforward to me: either member states accept the robust economic partnership I always demanded, or they transfer more powers to the Union."

Delors said Merkel and Sarkozy were playing games by arguing for "a minimum amount of cooperation designed to limit any transfer of sovereignty" to Brussels.

Taken on that basis, the ideas for eurozone reform they put forward on Wednesday after a head-to-head in Paris "won't amount to a hill of beans...

[Delors] instead called for a part-mutualisation of eurozone member states' debts, "up to 60 percent of GDP," saying the pooling of guarantees on that basis would "put out the fire" on money markets." 

Or, as Hunter S. Thompson once put it: 

"when the going gets tough, the weird turn pro."

"Fear and Loathing at the Super Bowl" 
(Rolling Stone #155, Feb. 28, 1974)

All very reminiscent of the following scene:

Wither The Zerozone?

I'm no Eurosceptic, but after all the dithering over the options open to the Eurozone it seems only the default option, as it were, will transpire: break-up. 

It remains to be seen whether we need to go through the farce of country-by-country downgrades and bank-by-bank recapitalisation. I guess we do, since avoiding or pre-empting that would take some kind of decision which the Zerozone politicians are incapable of making and for which they probably have no electoral mandate anyway.

But why stop there? I wouldn't weep for all those European Commission officials having to lodge their final excessive expenses claim and head home to defend their huge pensions from rioting neighbours. 

Flowers will grow through the cracks in Brussels' streets, and we can forget Strasbourg again.

We could certainly use the money more wisely.

Image from Crisisboom.

Toshiba: You've Lost A Customer For Life

In March 2011, I bought a Toshiba laptop after reading a glowing review on Which? (for which I'd had to subscribe). 

Nineteen days ago, my 6 month old Toshiba laptop died. 

I was on holiday overseas at the time. It was Friday evening. The Toshiba web site wasn't helpful and I couldn't reach anyone at Toshiba Support. Monday was a holiday in the UK, so it was Tuesday before I could report a critical problem: Day 4. The support person I spoke to said it couldn't possibly be a hard drive failure, as I'd have different error messages, so I should order a recovery disk on the web site - about £20 worth. Delivery was promised within fourteen days.

So, Toshiba think it's okay for a customer to wait at least fourteen days to get access to his laptop. So I went down to the basement and rescuscitated my old Dell laptop.

I began tweeting, using #ToshibaFail.

Toshiba's recovery disk arrived on Day 11. It didn't work. The only option available on the web site and via the telephone was to pay £30 for third party support. I spent over an hour on the phone before the support person said I should call a special number at Toshiba for a hard drive diagnosis. I did, and after trying to suggest my warranty details on the web site weren't valid, they said I should take the machine to a support centre in London, which I did, same day. 

On Day 13, the Toshiba service centre told me the hard drive had failed. They said they'd ordered a new one on the warranty. Estimated delivery time: another 5 business days.

Day 17, the lap top still hadn't surfaced, so I ordered a new Dell - estimated delivery: two days.

Today, Day 19, the new Dell arrived. I also got a call to say the Toshiba was ready, but I don't care. This is being posted via the Dell. I still haven't collected the Toshiba, which I might do tomorrow if I have time.

Toshiba, you've lost a customer for life.