Osborne Should Apologise

Yesterday a huge blow was dealt to the integrity of the chancellor George Osborne. The Treasury Select Committee had called Paul Tucker, who you should remember as the man that Barclays’ claimed instructed them to fix the LIBOR rate. In an interview with the Spectator Magazine, the chancellor had claimed that Labour ministers were clearly involved in instructing Paul Tucker to tell Barclays’ that their borrowing rate need not be as low. To be specific Osborne accused Ed Balls of involvement saying “he [Ed Balls] clearly has questions to answer.” This provoked a furious reaction in the House of Commons the next day as Ed Balls demanded that Osborne produce evidence to back up his claim, which Osborne was unable to do.

At the select committee hearing, Tucker said that Labour ministers had “absolutely not” instructed him to tell Barclays’ to fix the LIBOR rate. This completely clears Balls and the rest of the Labour party in the eyes of most people; as a result the Labour Party has demanded that Osborne issue a full, public apology. I highly doubt that Osborne will do this; instead he will rhyme off some excuses and try to ignore the issue.

Most people believe that Osborne was trying to regain some of his reputation that he lost following the disastrous budget. Instead he has managed to lose more of it, by falsely accusing a senior Labour minister of wrongdoing; Osborne has shown himself to be an idiot. He will pay for this mistake dearly.

Elections in Libya

In 1969 Colonel Gaddafi took control of Libya, and for the next 41 years there were no elections. This has finally changed as yesterday Libyans took to the polls for the first time since overthrowing Gaddafi last year. Over 100 political parties are vying for seats in the 200 strong parliament, the parliament will then begin to draft a constitution and select a leader. The constitution will then be voted on in a referendum.

So far, everything seems to be going rather smoothly, even in Gaddafi loyalist areas voter turnout has been remarkably high. The election has also been marked with relatively low violence, particularly in the East around Tripoli. In Benghazi on the other hand there have been a few attacks on polling stations and skirmishes with the police, but nothing major.

The National Transitional Council has promised to hand over power as soon as a government is formed, which will take a few weeks as vote counting will take quite a long time and one party is unlikely to receive a majority. Yet if a stable government is formed there will be many challenges for it, central government is currently very week and armed militia are the de-facto government in rural areas.

Despite the challenges ahead, things are looking bright for Libya. The vast oil wealth will be able to prop up the civilian government against terrorists and will allow Libya to be rebuilt. Let’s hope the revolution will turn into a shining success, like those in Eastern Europe after the end of the Cold War.

Problems for Obama

Unfortunately for Obama, the employment figures yesterday were not good. During the month of June only 80,000 jobs were added, considering there are over 12 million Americans unemployed, this is a very small figure.

The problem for Obama is that this is the third month in a row of poor job creation, nothing compared to the jobs added at the start of the year. This is bad news for Obama as the election is only four months away, if serious job creation doesn’t begin soon then Obama will be in big trouble. Since the great depression, no President has survived re-election when the unemployment rate has been about 8%, it currently stands at 8.2%.

This has been a great chance for the Mitt Romney campaign, after the Supreme Court healthcare ruling the campaign was a muddled mess. This is a chance for them to take back the narrative from the Obama campaign, but talking about the economy isn’t always going to be easy for Romney. His one stint as a public employee, as governor of Massachusetts, was marked by very poor job creation and a serious decline in manufacturing jobs. Although Obama’s recent job record hasn’t been great, at least he’s been adding jobs. Mitt Romney lost more jobs as governor than gained, and Obama has four months to do better than him.

The problem for Obama is there is nothing much he can do. He doesn’t really have time considering there’s the summer recess. Oh, and the fact the Republicans are doing everything they can to destroy the economy so Obama doesn’t win re-election. Unfortunately for Obama the Republicans control the House of Representatives and the Republicans can also filibuster anything passed in the Senate. This has seriously hampered Obama in his first term, as the Republicans have always had enough Senators to filibuster and Obama-legislation.

Unfortunately, when the Obama campaign tries to vocalise the Republicans-are-tanking-the-economy rhetoric, it just sounds like they are making excuses for Obama’s failures. It also doesn’t help Obama’s image of trying to stretch across the isle to the Republicans.

Whatever happens, the next four months of job creation (or loss), will be extremely influential in deciding who takes the inauguration oath next year. 

Osborne Clashes With Balls

The House of Commons were pretty heated yesterday between the chancellor, George Osborne, and the shadow chancellor, Ed Balls. It all comes down to yesterday’s issue of the Spectator Magazine in which it interviewed Osborne. During the interview Osborne accused Balls of being directly involved in the LIBOR fixing scandal at Barclays, along with other senior advisors and ministers in Gordon Brown’s cabinet. He did this, with no evidence whatsoever.

This also took place in the context of the vote over whether there should be a judge led inquiry or a parliamentary inquiry. Labour is still advocating a judge-led inquiry whilst the Tories want the parliamentary version. The Tories did win the vote in the Commons, and Labour has promised to co-operate. The difference between the two types of inquiry is that the judge-led inquiry would reach deeper, look into the whole of the banking sector (rather than just the Barclays’ LIBOR scandal) and take longer. With this in mind it seems bizarre that the Tories are accusing Labour of trying to cover up the Barclays’ scandal. The Tories believe that the Labour may be implicit due to the recently leaked memo and the fact that Labour was in charge of the country whilst it happened. If Labour really were trying to cover up the Barclays’ scandal, why would they be advocating the more intrusive inquiry that would be more likely to uncover Labour wrongdoing?

The Front Cover of the Spectator titled: J'accuse

Syrian Conflict Continues

The violence in Syria is worse than most people realise according to a new report from Human Rights Watch. Research by the organisation has found that people detained by the Syrian government were tortured extremely harshly, detainees were beaten, burned with acid and sexually abused. The report also claims that torture in institutional, sanctioned by the highest levels of the Syrian government. The organisation is calling for the International Criminal Court to call for the arrest of top level Syrian officials, in a similar style to what it did for Colonel Gaddafi and his family. The only problem with this is that Russia, Syria’s ally, could (and would) block any attempt to do so.

To anyone who has been paying even the slightest bit of attention to the Syrian conflict, this will come as no surprise. But nonetheless it helps to apply pressure to Syria’s few remaining allies to abandon the Assad regime and back Arab and Western Nations proposals for regime change.

I still believe that the best thing that the UN could do, would be a UN peacekeeping mission that would try and reconcile both sides, this could plausibly get Russia on side and would be appealing to the West. Although I believe regime change is inevitable, a peacekeeping force would be the first step towards such an event.

Syrian Conflict has destroyed the country
Source: Wall Street Journal

Cameron Calls Inquiry into the Banks

The Prime Minister has called a parliamentary inquiry into the Barclays’ LIBOR scandal, it will be able to question people under oath and call in politicians, bankers and other groups of people. Labour has disagreed with this move, when speaking in the House of Commons yesterday Ed Miliband said “We will continue to argue for a full and open inquiry, independent of bankers and independent of politicians.” Unlike David Cameron, Miliband and the Labour party want a Leveson-style inquiry into the whole of the banking sector.

The inquiry would be chaired by a judge and would be completely independent of parliament. It would not only look into the LIBOR scandal at Barclays but would look at the ethics and culture of the whole City of London. It would question big names from all banks as well as politicians and investors.

Confidence in the banking sector has reached record lows, having never really recovered from the dent to its reputation brought by the financial crash. Worse still for the sector is its reputation will only go down, the LIBOR scandal will almost certainly spread to other banks such as RBS.

Yesterday Osborne also announced in parliament that the fines brought on Barclays would go towards the public purse instead of into regulating the City. There is also huge pressure on the British investigators to levy higher fines on any other banks implicated in the LIBOR scandal. Many people believe that the fine levelled on Barclays by City regulators was simply too small, you have to remember that Barclays could easily claw that back in a few days trading.

                                          

The way forward for the banking sector is unclear, but I do believe it will have to involve tighter regulations. After all, lose regulations were what caused the financial crash, and loosening them won’t solve it. 

The Banking Crisis Mark II

This truly has been the worst week for the banks since 2008. So far this week RBS has had problems with customers’ accounts, Barclays has endured the LIBOR scandal and now all four big banks (RBS, Barclays, HSBC and Lloyds) have been found guilty of miss-selling complex financial products to small businesses.

The miss-selling scandal has caused many small businesses serious trouble as they struggle to keep up with payments to the banks. The City watchdog has now instructed the banks to cancel any contracts that were miss-sold and reimburse some businesses if necessary.

Worse thing is this new banking crisis is still not over; American and British investigators are still looking in to the LIBOR scandal. They believe that it was not limited to just Barclays; this could be a sector-wide scandal encompassing many banks.

Today Vince Cable has called for a criminal investigation into the scandal at Barclays, commenting in an interview with Sky, Cable said “They [the public] just can’t understand why people are thrown into jail for petty theft and these guys just walk away having perpetrated what looks like a conspiracy.” The business secretary also said that he believed the public would back a criminal investigation as the banks are increasingly unpopular.

The Prime Minister has rejected a call from Labour to call a Leveson-style inquiry into the banking sector, believing it is not necessary. But don’t give up hope! He also said there would be no inquiry into the press and look how that turned out. Personally I agree with Labour, there should be an inquiry. I believe the Leveson Inquiry has been a success, it has shown the public all the bad things the press have done. Now imagine what a banking inquiry would do! Ordinary people are directly affected by banking; almost all UK adults will have multiple bank accounts. We should know what the banks are doing with our money, the risks they are taking and the devious schemes through which they try to make money. We need a banking inquiry as soon as possible, to try and stop “bad banking” and help “good banking” to thrive.