After Them, the Bath

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In his song, u2018The Gambler’ — whose lyrics we used to have pasted up on the positions board in the dealing room in which we worked — that old C&W stalwart, Kenny Rogers, croons:

u2018Never count yer winnin’s when yer sitting at the table,
There’s time enough for countin’ when the dealin’ is done.
You gotta know when to hold’em, know when to fold’em,
Know when to walk away and know when to run.’

It goes almost without saying that this homely stricture against the sin of Hubris could do with a little more airing today.

Starting with the boldest claim of the day on the Irving (‘stocks have reached a permanently high plateau’) Fisher Award for playing Russian roulette with the spirit of Nemesis, was John Wriglesworth, an economist at the online UK estate agent (that’s a realtor to you Good Folks) Hometrack.

John was waxing positively triumphal over news that, after a summer lull in Britain’s runaway housing bubble, property sales agreed rose by 2% in September and that sellers had more success in getting the prices they wanted.

‘The many doom mongers who have been predicting a crash over the past two years are looking rather foolish,’ he sneered.

Ouch! If you listen carefully, you can just hear the slings being wound up and the arrows of outrageous Fortune being sharpened….

That’s because this u2018good news’ on houses came with data showing that mortgage approvals hit yet another record, inching household debt closer to the very unmagical 900 billion mark — this in an economy where private GDP is around 860 billion a year, and so a level of personal liability slightly larger in proportion than prevails even in the US.

At around 15,000 (c.$25,000) for every man, woman and child in the country, this has risen by the extraordinary amount of 15% of disposable income in the past year alone, meaning that roughly an extra 5.50 in new debt has been incurred for every extra 1 earned in that time — a ratio which would be even worse if we allowed for the fact that much of what extra income there is has been generated as a result of heavy government borrowing to hire three-quarters of a million more workers in the public sector during the six years of the Neuearbeitspartei’s term of office.

Talking of which, another man not known for his lack of braggadocio was also out giving hostages to blind Tyche — none other than our endearing and self-effacing Chancellor, Culpability Brown.

Practically singing the Internationale to a rapturous crowd of Trades Unionists and associated party faithful, Brown played shamelessly to the gallery in a set-piece speech, full of a blustering insistence that he alone had delivered them to a cloth-capped Land of Milk and Honey where, henceforth, the Rich would toil willingly to pay for the Poor.

Taking his favourite Orwellian redefinition to new depths of semantic depravity, he swelled that u2018from next Monday the new pension credit – with a 2 billion INVESTMENT – will be the biggest single rise in pension payments to help the very pensioners… who have lost out for too long’

A dole to the retired (and surely not totally undeserving) poor is now an u2018investment’? Then surely Nero and Domitian were the Warren Buffets and Jim Rogers’s of Ancient Rome!

But it got worse.

u2018Friends,’ he assured the Brothers, there assembled in truculent solidarity, u2018past Labour Chancellors have had to come to Labour Conferences and explain why short term bursts of spending had to be reined back…. But I can tell you today that… by cutting back central bureaucracy [sic], by implementing wide ranging efficiency reforms [sic]; by focusing rigorously on Labour priorities; by requiring reform before resources [sic]; backing up past measures to cut debt [sic AND tired!]; that we will be able in the next spending round to deliver NEW resources to our front line public services.’

Oh Dear. I can feel yet ANOTHER tax rise coming on!

u2018And I can tell you that by continuing this discipline as a Labour Chancellor, the next spending round will not only lock in the higher spending we have been delivering… but DO MORE: with further increases in spending and investment for our priorities in the years to come’

Did you, Dear Reader, spot another rather rum definition from our Gordon’s Devil’s Dictionary in there?

Oh yes! In the wonderful world of New Old Labour, u2018discipline’ clearly now means merely a resolve to be uninterruptedly intemperate with your money and property!

As Lord Acton wrote of another of his ilk:

u2018Admiring enemies assert that by legal confiscation, the division of properties, and the progressive taxation of wealth, he would have raised revenue… none of which would have been taken from the great body of small cultivators who would thus have been forever bound to the Revolution…’

He went on:

u2018There is no doubt that he held fast to the doctrine of equality, which means government by the poor and payment by the rich.’

The irony here is that, though fitting, these words are from the great 19th Century Liberalist’s disapproving obituary for Robespierre himself, whereas Brown — perhaps more of a Danton — delivered this speech in a manner aimed at increasing the discomfiture of that dangerous dandy’s modern day equivalent, our very own First Citizen, Anotine RobespiBlaire.

Apres eux, le deluge, indeed!

Sean Corrigan [send him mail] writes from London on the financial markets, and edits the daily Capital Letter and the Website Capital Insight. He is co-manager of the Bermuda-based Edelweiss Fund.

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