Issue 101: 2017 04 20: Week in Brief: UK

20 April 2017

Week in Brief: UK

Union Jack flapping in wind from the right

Government

GENERAL ELECTION: The government has called  a general election on 8 June.  Under the Fixed Term Parliament Act that had to be endorsed by a two thirds majority of the House of Commons but, since Mr Corbyn has already said that he would back an early election, this requirement was easily met by a majoriy of 522 to 13.  Should the Government win the election, its fresh mandate will free it from electoral promises made by David Cameron in 2015.  For example it will be able to take a fresh look at the triple lock on pensions and the undertakings not to increase taxes and national insurance which resulted in a U-turn following the last budget.

The decision, reached after discussion with an inner core of Cabinet members, surprised commentators and the markets.  Sterling rallied immediately.  The plan seems to be for the campaign to be heavily Brexit focused and Mrs May has made it clear that she will not be taking part in any television debates.

See comment Draining The Swamp.

DIESEL SCRAPPAGE: The government is considering the possibility of a diesel scrappage scheme under which those exchanging their diesels for new cars would obtain a discount provided from government funds.  It is believed that the scheme would only operate in high pollution areas.  The Prime Minister is known to be concerned that the alternative of simply introducing a special congestion charge is unfair on those drivers who were encouraged to buy diesels by the Labour government.

SPEEDING FINES: As from 6 May, Britain brings into effect European rules which allow foreign police forces to access DVLA records to enforce speeding fines.  Oddly the system, which is designed to enable foreign fines imposed on British motorists to be enforced, is not reciprocal.  Under British law it is the driver and not the registered owner who is liable.  Accordingly a search of foreign registers will not reveal who should pay the fine.

FAST TRACK EXPULSION: Liz Truss, the Justice Secretary, is to introduce a new scheme for expelling failed asylum seekers.  The idea is to reduce the time between the decision and appeal to 28 days rather than the current 36, with 20 working days for a further appeal.  The plan, which has to be approved by the Independent Tribunal Procedure Committee, gives power to judges to decide whether fast tracking should apply or not.  Removals have fallen from about 18,000 in 2006 to about 3500.

GREENPEACE FINE: Greenpeace has been fined £30,000 for failure to register under the Lobbying Act in respect of its expenditure in the 2015 election.  As a not for profit organisation it should have registered because its expenditure of £125,000 exceeded the threshold of £20,000.  Apparently Greenpeace refused to register as “an act of civil disobedience”.

WAGES: According to official figures the average weekly wage grew by 2.3% in the year to February if bonuses are included.  Without bonuses the rise was 2.2%.  There is concern that, as the effects of the falling pound are felt, the purchasing power of working families will shrink.  The employment rate remains at 74%.

FOREIGN POLICY: The Prime Minister has praised Boris Jonson’s efforts in bringing together an international consensus for Rex Tillerson to take to Moscow.  She said that British scientists had found very clear evidence that a nerve agent was used in Syria and that it was highly likely that the Assad regime is responsible.

GERMAN INTELLIGENCE: A report by the German magazine Focus that Mrs Merkel received data gathered by GCHQ during a visit to the UK has caused resentment in the Federal Intelligence Service.  It is suggested that she may have handed over a file of reports from her own intelligence services in return.

NORTHERN IRELAND: The stalemate between the Democratic Unionist Party and Sinn Fein following the collapse of the Stormont government means that there will either need to be a new election or direct rule from the UK if a further power sharing administration is not formed in early May.  It is possible that elections to the assembly will be called to coincide with the General Election in June.

Media

FACEBOOK: The Times newspaper has reported that the social media company Facebook failed to take down images depicting child abuse and supporting terrorist atrocities on the basis that they did not breach their in house community standards.  It quotes a leading QC as saying that the failure to take down the posts when reported might mean that Facebook was guilty of criminal offences.  The odd part of this story is the focus on the criminal responsibility of Facebook.  Presumably if they were committing offences, the staff responsible must have been doing so too.  One might think that that was the effective place to apply sanctions.

TRUMP DAMAGES: The Daily Mail is to pay damages, thought to be in the region of £2.4 million, to Melania Trump, the wife of the President of the United States, following suggestions that her work as a model included other “services”.

SEX FOR ROOM: The discovery that landlords are offering accommodation in return for sex has caused concern among charities and politicians.  Apparently the arrangements are widely advertised in the media.

Education

GRAMMAR SCHOOLS: It is being proposed that at least one third of the pupils at new grammar schools will have to come from families earning no more than £25,000 a year.  That is higher than the £21,000 a year figure mentioned by Mrs May when she announced the new schools.  Opponents point out that only 3% of grammar school pupils receive free school meals as compared with 18% of pupils at other local authority controlled schools, taking this as an indication that an increase in the number of grammars will not assist poorer families.

STREAMING: Lawyers from the National Union of Teachers have asked a number of academies how they justify the admission to their selective streams.  Although streaming is legal once children have been admitted to a school, streaming at admission is not.  The union is concerned that if the government fails to get legislative support for its proposals to permit new grammar schools, streaming will be introduced within existing schools, thus creating grammars by the back door.

Health

SHREWSBURY AND TELFORD NHS TRUST: Jeremy Hunt has asked NHS England and the regulator, NHS Improvement, to contact families of children who have died at hospitals run by the Trust so that their deaths can be properly investigated.  There is concern that the steps taken to monitor babies’ heart rates during labour had been insufficient and may have led to deaths.

NURSING PAY: The Royal College of Nursing is to ballot members who have been offered a 1% pay rise on the possibility of strike action.  The College has never previously called a strike over pay but is concern that nurses have seen a 14% cut in real terms since 2010.

SICK BRITS: British holidaymakers are accused of making false claims against travel companies alleging that they have suffered from food poisoning.  The Costa Del Sol Hotel Association says that, despite a wide mix of holidaymakers, only those from the UK seem to be affected.  It is thought that the claims, much like those made for whiplash injuries against car insurers, are largely spurious and encouraged by lawyers remunerated on a contingency fee basis.

DRUG PRICES: The European Commission has begun in investigation into Aspen Pharmacare, a South African company which bought the rights to a number of patent expired drugs from GlaxoSmith Kline.  The price of the drugs were then increased by a factor of up to 120 in the UK and even more in Italy.  Rules are already being put in place in the UK to cover the pricing of patent expired drugs.  Aspen is already under investigation in Spain and Italy for an alleged abuse of dominant position.

Courts and crime

CRIMEWAVE: Crime in London is up by 4.6% to a total number of 774,737 offences over the last 12 months.  The increase includes a 4% increase in knife crime, a 42% increase in gun crime, a 26% increase in motor thefts, a 4% increase in assaults and a 12% increase in robberies.  Detection rates have fallen.  The increase in crime is also reflected in national statistics.

ASSISTED SUICIDE: A retired lecturer, suffering from a terminal complaint, has successfully challenged a High Court ruling denying him consent to take proceedings for Judicial Review of the ban on assisting suicide.  Mr Conway’s argument is that the Suicide Act 1961 is incompatible with the European Convention of Human Rights.

POLICE RECRUITMENT: A Freedom of Information request has revealed that the Metropolitan Police have paid £219 million to Reed Recruitment over six years, re-hiring former policeman to reduce staff shortages.  The Met is currently 740 detectives short and all those retiring this year are being asked to stay on.

 

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Issue 100:2017 04 13:contents

13 April 2017: Issue 100

Editor in booklined room at desk looking away from us - at 100 issues

The week’s news

      

 

Centenary Issue

100 up! by John Watson

A message to our readers

Comment

The French election by Richard PooleyV

What can the literature teach us about the candidates and their policies?

Bojo misses the party by John Watson

He is right not to go to Moscow

The Luck Of Mrs May by Robert Kilconner

Italy

A fairy tale

Revolution by J.R.Thomas

The Mayor, Aldermen, and Common Councilmen of the City of London

When Gove and Corbyn agree: VAT on school fees by Frank O’Nomics

Have proponents really considered the consequences?

Features

A Moveable Feast by Neil Tidmarsh

The milk chocolate Easter algorithm

Silence in Court? by Chin Chin

Better to keep the phone quiet

The Ski Club of Great Britain by Lynda Goetz

Over 100 years old and going strong

Review

America after the fall

Royal Academy

reviewed by Lynda Goetz

Revolution – Russian Art 1917-1932

Royal Academy

reviewed by Lynda Goetz

Puzzles and Cartoons

Crossword, by Boffles: “Tarts.”

Solution to the last crossword “Plain Vanilla 19”

Cartoons by AGGro.

Earlier EditionsLarge 600x271 stamp prompting the reader to join the subscription list

Issue 95: 09 March 2017

Issue 96: 16 March 2017

Issue 97: 23 March 2017

Issue 98: 30 March 2017

Issue 99: 06 April 2017

 

Issue 101:2017 04 20:Erdogan’s uneasy triumph (Neil Tidmarsh)

20 April 2017

Erdogan’s Uneasy Triumph

Yet another crisis for Turkey.

by Neil Tidmarsh

Less than two years ago, it looked as if President Erdogan’s political life was about to come to an end.  The parliamentary election of June 2015 was a disaster for him.  The electorate understood that the vote was really about Erdogan’s plans to change the constitution from a parliamentary system to a presidential one, and the result indicted that it did not approve of them.  Erdogan’s governing AKP party lost its majority, and opposition parties (notably the pro-Kurdish HDP) made huge gains.

Erdogan was unable to form a coalition.  His minority AKP government limped on until forced into a second election a few months later.  The results of that improved his position slightly, but it seemed that his ambitions for a powerful, executive presidency would have to be scrapped.  He appeared instead to settle for ad hoc measures to empower his office, taking an aggressive attitude to opposition of all kinds: official criticism was answered by sackings and intimidation; accusations of corruption against associates and relatives were answered with removals from office; opposition newspapers and media groups were seized by courts; journalists were arrested; accusations of the hitherto little-used offence of insulting the president were enthusiastically hurled about (almost two thousand people have been charged with this offence since Erdogan came to power in 2014).  Nevertheless, it was all a long way from the fundamental constitutional change which he had been championing.

But a lot has happened to Turkey since June 2015.  Commitment to the war in Syria has seen it in armed conflict against Assad’s government, against Syrian and Iraqi Kurds, and against Isis.  Even armed conflict against Assad’s ally Russia – hitherto a friend of Turkey – looked like a possibility after Turkish fighter jets shot down a Russian fighter jet.  The insurgency by Kurdish separatists in southern and eastern Turkey has resumed. The migrant crisis has deepened, with three million refugees from Syria, Afghanistan and Iraq inside Turkey, and an obligation to stop the flow of refugees over the Aegean and the Balkans to Europe, following the deal with the EU.  Friction with the EU over the migrant crisis and human rights, and with the USA over conflict with US-backed Kurds in Syria and Iraq, has damaged Turkey’s relationships with its Western allies.  And on top of all that, there was last July’s attempted coup d’état, which almost succeeded (if some accounts are to be believed) and which was followed by massive and repressive counter-measures.

It now seems that these crises enabled President Erdogan to project himself as a powerful defender of his nation, determined to face up to and destroy the country’s internal and external enemies.  He has been seen to defy the EU and the USA, and to win the respect of President Putin, a man who many believe is Erdogan’s role model.  He has apparently succeeded in persuading his country that the many serious problems that beset it can only be tackled by a president with even more power than he has at present; and the result of last weekend’s referendum has given him that power.  An executive presidency, with the power to over-rule parliament, is at last within his grasp.

In the coming weeks, Mr Erdogan will almost certainly resume his position as official head of the AKP, which he had to abandon (at least nominally) when he was elected president in 2014.  In the coming months, laws will be passed to prepare for the transition from a parliamentary system to a presidential system.  The change of systems will take place following presidential and parliamentary elections in 2019.

What now?  Europe is bracing itself for more friction with Turkey, fearing a breakdown of the agreement to contain the migrant crisis, something which Erdogan regularly threatens.  He has shown little enthusiasm for passing the democratic and human rights reforms that the EU has insisted are necessary if Turkish citizens are to be given visa-free travel to the Schengen zone.  And now he is talking about reintroducing the death penalty, which the EU considers to be a red line.  He is certain to use his new authority to move away from Europe and towards the recovery of Eastern territorial influence which he has always coveted – a return to Ottoman power and glory.   Europe and the West will find him increasingly hard to deal with as he grows stronger.

And yet there is no guarantee that he will attain the power and authority which the referendum has apparently granted him.  He has claimed victory on the basis of an unofficial count, a count which itself gives him only 51.49%, hardly an overwhelming victory.  The result is being challenged by protesters who are rallying in their thousands, by opposition parties, and by international observers such as the OSCE (which has said that the election took place on an unlevel playing field, with the authorities inhibiting campaigning for the ‘no’ vote).  There is particular concern about a change made to the rules just minutes after the polls closed; unstamped ballot papers, which are usually excluded, were suddenly allowed.  The main opposition party the CHP says that 1.5 million unstamped papers were counted – the margin of victory was about 1.4 million votes.

The final and official result of the referendum will be announced by the electoral board next week.  The board is expected to uphold Erdogan’s victory.  But the HDP and CHP opposition parties, and even parts of the nationalist MHP (the party which Erdogan’s own AKP relies on for its governing majority) may well block the legislation necessary to prepare the way for the new presidential system.

The many crises which have wracked Turkey in the last two years have opened and deepened cracks in the nation which at times look as if they could spiral out of control and even explode into civil war.  The Kurdish insurgency has already reached levels of violence which might qualify as open warfare.  And the reaction against the failed coup d’etat has developed into an anti-Gulan purge which is beginning to look like a country consuming itself; 113,260 people have been detained (including 168 generals, 10,732 police officers and 2,575 prosecutors and judges); 125,000 people have been sacked from their jobs; over 150 media outlets have been closed; 2000 schools, universities and dormitories have been shut down; 131 journalists are in jail.  The referendum has opened up yet another division.  Half the country (largely rural, conservative and working class) now identifies as pro-Erdogan; half (largely liberal, educated, secular and urban) now identifies as anti-Erdogan.  Both sides are equally passionate and dedicated, and the temperature is rising. Could this be the division which finally breaks the country apart?

 

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Issue 101: Crossword – Down to the Pub

20 April 2017

Crossword by Boffles

Down to the Pub

 

To see a printable version of this crossword

Issue 101: Crossword – Down to the Pub – printable

20 April 2017

Crossword by Boffles

Down to the Pub

Across

    1  Where a load of nonsense is talked? (4)

    2  Common queen whose consort occurs as well (8)

    8  Historic one which has given its name to a north London area (5)

  10  Accompanies 21dn (5)

 11 & 6dn        Royal insignia (5)

  12  7dn ingredient comes with a stack (6)

 14 & 22dn      Surely it serves more than squash? (6)

  16  National hero – on his own or with his rank or title (6)

  19  Worn by 2ac and often with a rose (5)

  21  Sort of coughs you may get after your visit (3)

  23  ……. Tun but treble is more common (3)

  24  Franz Joseph or Napoleon?  More likely George V (7)

  25  Was this Earl Elizabeth 1’s favourite local? (5)

 26 & 22dn      Does it stock Strongbow? (3)

 

Down

    1  Young chimney sweep is the PC explanation (5,3)

    3  What you do there (6)

    4  Less common big cat (5)

    5  Really?  Yes as tilers –  either with or without 6dn (7)

    6  See 11ac (4)

    7  What to drink and some may even be real (4)

    9  Usually with a dog (3)

  13  Legendary animal but still to be found (7)

  15  Where sailors go for a drop? (6)

  17  Hard to find a decent one in the rest of it (6)

  18  Another Queen but rarer than 2ac (4)

  20  It does during licensing hours (5)

  21  Old-style transport – usually white or black (5)

  22  See 14 & 26ac (4)

 

Issue 101: 2017 04 20: Cracking Eggs With Donald, JR Thomas

20 April 2017

Cracking Eggs With Donald

President Trump’s Easter message.

by J.R.Thomas

President Trump, clad in jeans and sweat shirt, appeared on the White House lawns to distribute Easter favours, join in the egg painting, dance with the Easter Bunny, and fling handfuls of mini eggs into the grass, crying “Take that, you suckers”…

No, you are right, he didn’t.  He and Mrs Trump, along with youngest son Barron, did appear on the steps of the White House and the Donald even risked the satirical possibilities of walking alongside the Easter Bunny, a strangely odd looking version this year.  But the President stuck to his reliable uniform of blue suit, white shirt, and red tie, walked with dignity and mostly unsmilingly to where the traditional festivities were unfurling, and waved at the crowd.  Then he gave a short speech; no Obama jokey address this year; Mr Trump said that things were going well to make America a strong nation once more and that many of those playing on the lawn would grow up to be successful in his reinvigorated United States.

Much of the media has of course had fun making the President look stiff and out of touch with his mostly young audience, but maybe Donald has a point.  He is not their eccentric uncle but their President, indeed a man old enough to be the grandfather of many of the guests, and a man who at the same time as he is entertaining children in his back yard is making momentous decisions concerning the future peace of the world.  Perhaps a more serious approach is appropriate in these times?  Certainly that is the message the Trump presidency is giving out at the moment.

It is a message which has been received in what, in the nineteenth century, were known as the chancelleries of Europe.  The one in Brussels muttered and grumbled, but in the chancelleries that Mr Trump is addressing – Moscow, Berlin and Ankara – the message was received and suddenly Mr Trump looks more serious and less far out than he did.  In Beijing too it was acknowledged that Mr Trump’s reach may be longer and swifter than almost anybody had expected.  Whether they believe that in North Korea is another matter.  If they do, how Mr Kim Jong-Un will respond to it is on the list of known unknowns.

What is causing perplexity though is that the Trump Presidency, assumed to be all about America alone, and building walls against the world, is busy examining the state of that world and in some cases reacting to it.  It is undoubtedly true that some of Mr Trump’s sweeping campaign statements have been quietly put back in the filing cabinet and that the President and his cabinet are having to deal with matters, and in ways, that they probably did not contemplate four months ago.  The operative word here may be “cabinet”.  Mr T is a businessman as we have pointed out before; he appoints the best man (sometimes woman) to the job and lets them get on with it, unless or until they mess up or turn out to be “unlucky”.  And Donald does seem to have a particular faith in the competence of military men – as people who have run businesses often do have, not least because military types tend to be very good at getting things done, on cost and on time.

Here is a good example.  He is letting his military men run the military department.  Mr Obama was not prone to engaging in warlike actions.  He did not like the political risk and he did not, we suspect, like to be a party to taking human life for any cause, even the lives of bad guys, but especially the lives of those persons who are known in military circles as “collateral damage”.  We are not suggesting that Mr Trump is bloodthirsty, far from it, but we do suggest that he is more inclined to take calculated risks and accept the damage that may result, if the actions achieve the desired results.

So if his top advisors in uniform say that they have a problem in Afghanistan but have a weapon that will deal with it directly and with minimal damage to what is around it, then The Donald may ask a couple of questions but his fundamental inclination will be to say “That’s your job, get on with it”.  If he wants to punish the Assad regime for appalling behaviour but try to prevent any fatal damage to Russian personnel, and the guys with the shoulder tabs say that they can do just that, then he will let them do just that.  And if his strategists come to him and say that North Korea is dangerously close to being able to launch a weapon that could hit Los Angeles, (even if, in fact especially if, the North K technology is so rubbish it might hit San Francisco or Tokyo by mistake) then he will ask them to evaluate with his team how to respond to that.  Maybe a “friend” of North Korea – say the President of China – will point out to Mr Kim that if he starts a nuclear war he will lose; maybe the North Korean generals will do anything to avoid living in a bunker for a couple of years with their President-for-life; maybe Google can interfere with the weapon control systems so that they can never leave Korean shores.  But Donald has only a limited belief that jaw is better than war, so if a reliable solution involves weaponry we may yet hear a bang from the South China Sea.  The reason we have not heard one so far may be that there will have to be some careful calculations as to the risk of North Korea hitting South Korea before American technology switches everything off, and as to whether, in the post bang world, the replacement government in North Korea might turn out to be even more odd than the extinguished one.

None of this means that the America First theme has left the White House.  IF American interests are at stake then America will defend itself, even pre-emptively.  That is very clearly the case with North Korea and also where American troops are still engaged, as in Afghanistan.  It is a bit harder to work out what drove the targeted bombing of a nerve gas unit in Syria – but how about a true moral imperative?  Mr Trump sounded very genuinely outraged by a politician gassing his own infant citizens, and when that outrage melds with a tidy little warning that American has the technology and the will, is happy to provide a practical demonstration to other rogues of what may happen to them, and gives a friendly warning to the Russians that the president of USA has just as strong nerves as the president of Russia, it is perhaps odd we even need to consider the question.

The message Mr Trump would like the world to hear is that we can all sleep a little more soundly in our beds with the new occupant of the White House watching over us – so long as we are not bad guys.  Time will tell whether we might be better off sleeping in our normal bedrooms – or in our cellars.

 

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Issue 101:201 04 20:Week in Brief International

20 April 2017

Week In Brief: INTERNATIONAL NEWS

Europe

ALBANIA:  More than 20 policemen and customs officers were arrested on suspicion of helping drug smugglers export cannabis to Italy.

FRANCE:  The first round of the presidential vote will take place this week.  The three leading candidates – Macron, Le Pen and Fillon – are neck and neck in the polls (with around 21%-22% each). Mélenchon (far left) has about 18%.

Emmanuel Macron’s campaign appears to have been the target of fake news stories and computer hacking, which many suspect are originating from Russia.

Jean-Luc Mélenchon, the far-left candidate and leader of the Rebellious France movement, is emerging as the most innovative user of new technology and social media, with widespread support from young votes, in spite of being one of the oldest candidates.

See comment Le Dilemme des Citoyens et Citoyennes.

GERMANY:  A suspect has been detained in connection with the bombs which damaged the Borussia Dortmund’s team bus and injured a player and a policeman last week.

HUNGARY:  The Constitutional Court overturned a ban on mosques and headscarves which was introduced by the mayor of the village of Asotthalom five months ago.

Tensions have increased between Hungary and the EU after President Orban threatened to close the Central European University in Budapest, refused to accept refugee quotas or to stop the detention of asylum seekers, and maintained the closure of the border to migrants. The EU commission has threatened to take Hungary to court unless it agrees to the EU policies. Angela Merkel has temporarily stopped the return of asylum seekers to Hungary, until she receives assurances that they will not be detained in border camps.

PORTUGAL: A Swiss-registered light aircraft crashed into Lidl warehouse in Lisbon – five people killed.

RUSSIA: President Putin and foreign minister Sergei Lavrov met the USAs secretary of state Rex Tillerson in the Kremlin, in spite of increased tension between the two countries following the punitive US air attack against the Syrian air force.

Security services have detained the suspected mastermind of the St Petersburg Metro bomb attack.  Abror Azimov, from Kyrgyzstan, was arrested in Moscow.

The Kremlin published pictures of the Arctic Trefoil, its new military base in the Arctic.  It is the biggest man-made structure in the Arctic, covering 150,000 square feet and accommodating at least 150 troops.

An independent Russian newspaper, the Novaya Gazetta, reported the abduction of about 100 gay men by the authorities in Chechnya, the mainly Muslim republic which is part of the Russian Federation.  They are allegedly held in secret jails and tortured.  The paper claims that at least 3 have been killed.  Two of its writers who covered Chechnya have been murdered in the last ten years.

SPAIN: Prime Minister Mariano Rajoy was summoned to give evidence in a corruption trial involving MPs from his Popular Party.

UKRAINE: Ukraine, the host of this year’s Eurovision Song Contest, has barred the Russian contestant, Yulia Samoylova, from taking part in the competition because she has performed in Russian-annexed Crimea.  Russia’s state broadcaster has retaliated by boycotting the competition.

Middle East and Africa

EGYPT:  Gunmen killed a police officer and wounded four others in an attack on a police checkpoint at the 6th century St Catherine’s Monastery in Sinai.

IRAN: The former president, hardliner Mahmoud Ahmadinejad, has registered as a candidate in next month’s presidential election. His registration was a surprise, as it appears to defy the wishes of the supreme leader Ayatollah Ali Khamenei.  President Hassan Rouhani has also registered, hoping for a second four-year term.  Almost 200 candidates have registered so far (including 8 women); they will be vetted by the Guardian Council, which will draw up a final list by the end of this month.

ISRAEL:  Over 1000 Palestinian prisoners in Israeli jails have gone on hunger strike, demanding better conditions including more access to telephones and more visits from family members.  There are 6,200 Palestinians held in prison in Israel.

SENEGAL:  At least 20 people were killed in a fire at a Muslim spiritual retreat in Medina Gounass, a village in east Senegal.

SOUTH SUDAN:  The civil war’s increasing violence is plunging the country further into famine and destruction.

SYRIA:  A suicide car-bomb attack on buses taking evacuees from the northern towns of Fuaa and Kafraya killed at least 43 people.  The two government-held towns are being besieged by rebel forces.

The Battle for Mosul continues. The UN reported that 500,000 civilians have fled the city, and another 500,000 remain in the conflict zone.

TURKEY:  President Erdogan narrowly won the referendum about constitutional change, with 51.49% of the vote.  His powers will be considerably increased now that the country will be governed by a presidential system rather than a parliamentary system.  The EU fears that this will increase friction between Europe and Turkey. See comment Erdogan’s Uneasy Triumph.

Far East, Asia and Pacific

AFGHANISTAN:  The US air force dropped its largest non-nuclear bomb on an Isis underground complex in Nangahar province, near the Pakistan border.  It was the first combat use of the GBU-43/B Massive Ordnance Air Blast bomb (MOAB – also known as the ‘Mother Of All Bombs’), which is satellite-guided, 30 feet long, weighs almost 10,000kg and is detonated 6 feet above the ground.  Afghan authorities said that at least 92 Isis fighters were killed.  US and Afghan ground forces are advancing on the area, which is protected by bunkers, tunnels and mine fields.

CHINA:  President Xi, speaking on the phone to President Trump following their meeting in Mar-a-Lago, criticised North Korea’s defiance of UN resolutions against its nuclear weapons programme, but called for a peaceful resolution of the crisis.  Foreign minister Wang Yi discussed the crisis with Russian foreign minister Sergei Lavrov by phone.

China abstained from voting on a UN security council’s resolution condemning the recent chemical attack on civilians in Syria.  President Trump praised China for not voting against it.

JAPAN:  The Japanese navy announced plans to conduct joint exercises with the US navy’s USS Carl Vinson aircraft carrier strike group which is approaching the Korean peninsula.

KOREA, NORTH:  The 105th anniversary of birth of state founder Kim Il Sung on Saturday was marked with the usual military parade.  An attempt to test a ballistic missile failed.  US vice-president Mike Pence, visiting the border during a ten-day tour of Asia, warned Pyongyang about the US’s new resolve; in Japan, however, he stated that President Trump would prefer diplomatic and economic tactics rather than military ones.

PAKISTAN:  A student at Abduki Wali Khan University was attacked, beaten and murdered by fellow students who accused him of blasphemy for expressing his Ahmadi faith on social media.  Twelve people have been arrested, and eight have been charged with murder and terrorism.

SRI LANKA:  150 homes were destroyed and at least 29 people were killed when a rubbish dump collapsed onto the town of Meetotamulla outside Colombo.

America

USA:  A man who filmed himself randomly killing a passer-by in Cleveland (Pennsylvania), and posted the footage on Facebook, shot himself dead after a police chase.

A gunman shot four people dead in Fresno, California. He shouted Muslim slogans during the attacks, but the authorities think these were race hate crimes rather than acts of terrorism. A spokesman for the local Islamic Cultural Centre condemned the attacks.

A doctor of Indian origin was arrested under suspicion of conducting FGM on young girls.

See comment Cracking Eggs With Donald.

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Issue 101:2017 04 20:Week in Brief Financial

20 April 2017

Week in Brief:BUSINESS AND THE CITY

NEWS, the word in pink on a grey background

GOLD SORES:  You know that the problems are real when Goldman Sachs misses its own performance forecasts; especially when they and fellow investment banks have been making positive noises, albeit unofficial, about the beneficial effects on their businesses of political change in the USA and Britain . Goldman’s first quarter this year was expected to show the investment banking giant powering on, but in fact the performance was flat – good results in mortgage and interest instrument trading were cancelled out by underperformance in commodity trading, credit related businesses, and currency trading.  The core reason seems to have been that Goldman expected interest rates to start rising under the new President and positioned their book accordingly – buying early in the expectation rates would be on the up. Initially that looked like a good call but then rates have fallen back, leaving the trading books showing losses at mark to market.  Once upon a time of course banks could re-mark their books as longer term holds and avoid mark downs, but no longer, books must be valued as if being sold at the valuation date.  But do not despair too much for the struggling bankers – in spite of the weak quarter, net revenues were up 27% against the comparative quarter last year, with especially strong performance in areas which are added value – advisory based activities, such as underwriting debt or equity raises or investment management.

The news has knocked Goldman’s already retreating share price, down 5% since the November election, and also knocked the share price of some competitors who it is thought in the market may be experiencing similar issues – without the cushion of Goldman’s strong position in added value products.

IRON AGE:  One commodity price we do not follow in our weekly round-up of market trends is that of iron ore, a basic but highly essential raw material of many industrial (and domestic) products.  Iron ore is a bit like oil – for a long time the world looked as though world reserves were running out whilst use kept going up, but then the rising price made exploration more interesting and massive new reserves were found.  Just as, needless to say, the world started to be much more efficient at using metal so demand, whilst not dropping, slowed.  And unlike oil, iron can be reused, over and over again – as the scale of the world’s scrappage business demonstrates.  It is true that Europe is pretty much mined out, the big suppliers now being in Australia, India, and Brazil – and the big users in India and China, and to a declining extent, the West.  Ore prices have also been behaving like oil recently, recovering to highs of over US$95 per tonne at the beginning of the year as demand seemed to be picking up among steel manufacturers, but now sliding back to around $65 as steel production reaches new records – but world demand for the stuff slows.  The ore industry knows what will happen next and the price reflects sharp concerns that both iron ore and steel are being stockpiled – indeed ore reserves ready for processing are said to be up about a third in the first three months of 2017.  The slow up in demand is now starting to affect mines which are easing up on production; an especial problem for Brazil where mining is a big (and relatively well paid) employer, it is also hitting the share prices of the big public mining companies most of which are also suffering from the slide in copper prices over the last few months.

LOOSE RIGGING:  The LIBOR rigging scandal just will not go away.  After a series of trials of individual traders accused of attempting to adjust the market rates for interest rate products, for their own benefit or that of mates, which produced a few convictions but also a lot of acquittals, further suggestions have been made that the real impetus came from higher up.  Recently revealed evidence suggests that this reached as high as the Court of the Bank of England, and linked in the Treasury, which is said to have wanted interest rates pushed down as low as possible to help in the crisis of 2008 – but it goes back  further than that.  The allegations have now been picked up by John McDonnell, Labour’s shadow Chancellor of the Exchequer and a close ally of Jeremy Corbyn, who has called for a public enquiry into exactly what went on and who knew what.  Given other distractions for politicians this week and into June, it seems unlikely the government will oblige him, but there may be more revelations to come about the relationships between the Bank, the regulators, and the clearing banks.

NOT GOOD ENOUGH: The legacy of 2008 still hangs over one major bank.  RBS was supposed to sell its recently carved out Williams and Glynn’s subsidiary (a loose successor to the bank of that heritage which was centred in the North West).  After years of trying to separate it off – complex reporting and management systems seemed to make that almost impossible – it was finally able to persuade the Treasury and is currently urging European Commission competition regulators to be allowed to keep it, provided that it injects about £750m into rather vaguely described initiatives to increase competition in the small business market.  RBS’s small competitors – the so-called “challenger banks”, do not like that at all, calling for the government to force RBS to divest itself of a range of assets into the market so that the RBS business can be shrunk and the challengers be given more of a leg up to become competitive.  They also want RBS to be forced to continue to provide basic services at cost so they do not have a one stop advantage over smaller banks that do not have capabilities in, say, foreign exchange or derivative provision.  The UK Treasury has said the RBS proposal is the best way ahead – but it is far from certain that the EC will take that view.

HEAVY BOOZERS: Good news for those facing the uncertainties and upsets of a General Election campaign – in 2016 45 new gin distilleries were opened, giving all the benefits of diversity and competition to a market which is so close to so many hearts.  Or livers.  For the first time gin sales exceeded £1billion, and HM Revenue and Customs, who has awarded itself the not unpleasant job of monitoring the sector says that British gin is exported to 139 counties.  Many of the new batch are artisan distilleries, capable of being run from a big garden shed or even a couple of back bedrooms.   A lovely way to sooth yourself to sleep.

KEY MARKET INDICES:

(as at 18th April 2017; comments refer to changes on last 7 days; $ is US$)

Interest Rates:

UK£ Base rate: 0.25%, unchanged: 3 month 0.34% (steady); 5 year 0.64% (falling).

Euro€: 1 mth -0.37% (steady); 3 mth -0.33% (steady); 5 year -0.01% (falling)

US$: 1 mth 0.99% (steady); 3 mth 1.15% (steady); 5 year 1.83% (falling)

Currency Exchanges:

£/Euro: 1.18, £ rising

£/$: 1.26, £ rising

Euro/$: 1.06, € steady

Gold, oz: $1,285, rising

Aluminium, tonne: $1,915, falling

Copper, tonne:  $5,620, falling

Oil, Brent Crude barrel: $55, rising

Wheat, tonne: £147, steady

London Stock Exchange: FTSE 100: 7,123 (fall).  FTSE Allshare: 3.9204 (slight fall)

Briefly:    Mrs May’s election announcement seems to have affected many things – even in international commodity markets.  That traditional shelter, gold, rose; the traditional index of nervousness, oil, also rose; and everything else fell.  On the financials front, though there was very little movement – sterling was slightly up and most longer term interest rates fell.  Or maybe it is just that everybody is away for Easter?

 

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Issue 101:2017 04 20:Le Dilemme des Citoyens et Citoyennes (Richard Pooley)

20 April 2017

Le Dilemme des Citoyens et Citoyennes

Game theory and the French elections.

by Richard Pooley

photo Robin Boag

Polls in France still show that around a third of citizens have not decided who they will vote for in the first round of the presidential election on Sunday.  In many cases, if my French friends and acquaintances are any guide, this is not because they dislike all eleven candidates.  Indeed, those friends have told me very clearly who impresses them and who does not; but only two have told me who will get their vote.  The problem the French face is this: if they simply vote for the candidate whose character and policies they most like, they may well end up with a president they can’t stand.

They are in a situation not unlike that faced by the two criminals in The Prisoners’ Dilemma, the most well-known example of game theory.  Each prisoner, colleagues in a violent crime for which they are awaiting trial, is in solitary confinement, unable to speak to the other.  Each is offered a choice: confess or remain silent.  Each is told that if both confess, both will be sentenced to two years in prison; if one confesses and the other remains silent, the confessor will be set free and the silent one will get five years in prison; if both remain silent, they will only be in prison for one year on a lesser charge. The rational decision for each prisoner is to confess; neither knows what their partner will decide and it is safer for each to assume that the other can’t be trusted to keep his mouth shut.  Yet, the best outcome for both would occur if they both stayed silent.

Like each prisoner, no French voter can be sure, of course, what decision their fellow citizens are going to take on Sunday.  It would not matter if, as nearly always in the past, they were certain who the two winning candidates would be. But this time only a handkerchief, as the French say, separates four of the candidates. The distance between the recent average polling figures for Emmanuel Macron and Marine Le Pen (23%) and those of François Fillon and Jean-Luc Mélenchon (19%) make it too close to call. Normally, the pollsters release their exit poll predictions at 20.00 on the evening of Election Day.  People attending election night parties count down the last few seconds to the hour and champagne corks fly a few seconds afterwards, whatever the result.  But not this time. 20.00 will pass without exit polls.

The fact of this mouchoir is the main reason why pollsters have been spending so much time and money trying to find out who voters will vote for in the second round according to three hypotheses.  Assuming Le Pen is one candidate, how would people vote if she faced Macron, Fillon or Mélenchon?  In all cases, Le Pen would lose. In fact, the pollsters initially asked how she would fare against Benoît Hamon, the Socialist Party candidate, not Mélenchon.  But Hamon has trailed off in this race and is even in danger of being overtaken by Nicolas Dupont-Aignan, a candidate who shares most of Le Pen’s views.  However, Le Pen is no longer certain of being in the second round. The permutations have now become six.

One polling organisation, IPSOS, decided to ask voters who their second choice was in the first round.  I suspect IPSOS felt that this would be a more accurate pointer to who will win, should many people vote not for who they most like but against who they most fear.  The results were revealing and have been pored over by commentators.  They also provide voters with some idea of how others might cast their ballots.

François Fillon, Republican Party candidate, is supposed to represent the centre-right. However, he has recently been shown to be flirting with Sens Commun, a tiny group of social conservatives who are against same-sex marriage, as is Fillon.  He has said more than once that if he does not get to the second round, nearly all his supporters will vote for Le Pen “less out of conviction, more out of rage.” But IPSOS has found that, in fact, only 6% of Fillon’s supporters give Le Pen as their second choice.  58% said that Macron, the centrist, ex Economy Minister in the current Socialist Government, was their second favourite (and 21% had right-wing Dupont-Aignan as their number two). This was not what any political expert seems to have expected.  But even more puzzling was the response of Macron’s supporters. 30% said that the Communist-backed Marxist, Mélenchon, was their second choice.  Only 12% would switch to Fillon.  Exactly a third of Macron’s supporters declared that they would not choose any other candidate.  What about the second choice of those currently intending to vote for the extremists?  33% of Le Pen’s people said Macron and 26% said Mélenchon. Hardly any of them would consider Fillon, the person whose policies are not too different from Le Pen’s.

What does this tell us? First, the old loyalties to simplistic labels like Right and Left have largely disappeared. Secondly, there is a yearning for change and a readiness to accept some extreme solutions to France’s problems. Thirdly, there is across-the-board contempt for the old guard, represented in this election by ex-Prime Minister Fillon.  Finally, a very large number of French people will only decide who they will vote for at the last moment.

I was in the UK two weeks ago. I found it difficult to get across how ground-breaking and strange this French presidential election is proving to be.  Imagine that in the upcoming UK general election you had to choose between these four people to be the UK’s leader: Nigel Farage, George Osborne, an early version of Tony Blair and Ken Livingstone.  Polls show them to be running neck-and-neck.  Only two can go through to the final round.  Who would you vote for?  Add in the fact that if Farage were to win, he would have, initially at least, only two UKIP MPs.  Osborne would have perhaps half of the existing Tory MPs on his side.  Blair would have no MPs at all. And Livingstone would only have those Labour MPs who find Jeremy Corbyn too far to the right for their taste.  Around 70% of existing MPs would not have backed any of the four candidates.  It is not an exact comparison with the French election.  Neither Osborne nor Blair are that close in character and political views to Fillon and Macron respectively.  However, though their backgrounds are utterly different, Farage and Le Pen share the same world view.  And Mélenchon has turned himself in a few months from someone who resembled Arthur Scargill in his heyday to a close approximation to Ken Livingstone.

It is now perfectly possible that the French will have to choose between Mélenchon and Le Pen for their president.  If so, I would expect Mélenchon to win.  Either choice would spell the end of the European Union. The Japanese would set the Euro plummeting in value overnight on Sunday. Or it could be Fillon versus Le Pen (predicted by five brave students of Télécom Paris Tech whose new-fangled polling methods have Le Pen on 24.13% and Fillon on 21.77%, just ahead of Macron; I love their confidence in going to two decimal places).  If so, everyone (including those students) expects Fillon to win.  I am not so sure.  And if he did win, would he have the moral authority or sufficiently solid support from Republican MPs to push through his painful reforms?  Best for France would be Macron against Le Pen. I think the result would be much closer than pundits currently suggest. Most importantly, two radically different futures for France would be presented to the French people.  At last, they would be able to have a proper debate, a return to a world they understand.

By the way, in the course of this election I have hardly mentioned the French parliamentary elections which are coming up on 11 and 18 June (yes, two rounds again).  The general election campaign does not end late on Sunday 7 May.  France will then have a president but the political party which he or she heads may have no or very few MPs.  Yet another battle will start: to fill 577 parliamentary seats.  Expect a complete change to the names and nature of France’s political parties.

See you on the other side.

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