The biofuel mendacity

For sometime now, the green movement and their ilk have been pushing their agenda of coercing governments to force us the consumers to use biofuels. As is typical with the greens and their inability to see past their own towering moral vanity; such policies for the uninitiated are bound to have a catastrophic impact on the vary people that they say they “care” about.

Eliding as do on the consequences of green polices, while substituting as fact, their “remedy in search of a problem”; the greens have attempted, and with some semblance of success, of painting a picture that conjures up images of renewable abundance, minus the downside of being an encumbrance on the planet.

For anyone whom took just a cursory glance past page one of Environmental Greens & Co press releases, it would have been abundantly clear that all this razmataz was intentionally obscuring some glaringly obvious shortcomings.

People, land, resources and food are inextricably linked with social, political and economic forces. Unbridled “green bias” skews and distorts such relationships, which by its very nature is inimical to us all.

I know the greens hold anything that has but the slightest hue of capitalism in contempt, but they could learn a few things, should they set aside their dogma for a moment. There is no such thing as a free lunch!

Biofuels, in principal are a good thing. Panacea it isn’t. I support biofuels in principal if but for the purpose of reducing our dependence on energy from volatile regions of the world.

As an energy / commodity trader, I can see that that old adage of “no free lunch” is alive and well. For one thing biofuel precursors, have sky-rocketed on the global commodity exchanges. This has had the effect of pushing up prices on pretty much all staple ingredients to which we are dependent on.

My advice to the greens and their allies is to spend less time in their air tight ivory towers and a little more time in reality. Inflicting pain on the people in an attempt to prove a point which can never be proven is an exercise in futility, but more important downright dangerous.

Thank G-d for Lord Lawson!

Last night I had the pleasure of watching Lord Lawson on “Newsnight” (http://news.bbc.co.uk/1/hi/programmes/newsnight/default.stm) dare to question the premise of global warming / climate change advanced by the Environmental / Green Lobby. I have never needed any convincing on this as I have always been unashamedly incredulous of this whole environmental scaremongering.

For far too long we have collectively allowed that “cosy liberal consensus” to monopolize this debate with innuendo and supposition, substituting where empirical evidence should be offered. Lord Lawson was right to expose the holes as he did last night on the environment lobbies most egregious claims, and boy are they are plenty!

Make no mistake about it; the green lobby is nothing more than socialism repackaged. They are quite adept at “throwing mud” on any of us if we dare question their premise. Well I for one believe it’s time we were able to have a grown up and frank debate on this topic. We can not afford to leave an issue as important as this in the hands of the liberal elite.

Ahhh! But we have science on our side, I can hear them all shout. The fact is, they have never had science on their side. “Voodoo” science does not count. This trick of limited data points extrapolated with contempt, is about as empirical as taking a humpback whale out of the sea; placing it in a fish tank and then concluding, that what is observed in such a limited scope is what we can conclude happens in nature.

Just to be clear here, my understanding of empirical is: provable or verifiable by experiment. For all the talk about the earth being “two minuets to midnight”, we have seen nothing but extrapolation and computational modelling. Great tools they are, but I have to tell you as a former financial engineer, computational modelling as well as interpolation / extrapolation are only part of the necessary tools meant to argument the scientific toolbox, not replace it. In other words, context is always necessary, and results are NOT prophecy scribed in stone.

And on that topic of the “science” of the environmental debate, to my knowledge based on the information I have read the earth is not warming, its’ actually cooling. Taking 2002 as my reference point the earth’s temperature has pretty much reached a juncture of little or no growth, ergo the argument advanced by the environmental lobby that CO₂ emissions is driving temperature flies in the face of facts. The fact is, CO₂ is increasing yet temperatures are plateauing, and no, you don’t have to take my word for it, the International Panel on Climate Change (IPCC) has acknowledge this very observation!

There seems to be a whole industry created solely for the purpose of inculcating us the consumer, that we should carry the baggage of global guilt as a consequence of humankind’s progress. This is a recipe for disaster, and would affect the majority world countries worst, the very same people the green lobby, cries is their Raison d'être.

Repetitive yes, but in closing I must state as a matter of fact the following – In light of decades spent churning out computer models, there remains no empirical evidence that anthropogenic CO₂ production is causing global warming. The caveat here is, if you except that the earth is warming in the first place. If you do go on to except that premise that yes in fact the earth is warming, calculating the contributions from a thawing earth as a result of the last ice age, itself the consequence of changes in solar heat following changes in the earth's elliptic orbit and in its tilt, can never be answered with certainty.

This nonsense of the “precautionary principal” if followed to it “illogical” but logical ends has no boundaries. After all the next time you get in the bathtub, walk down the stairs, leave your home, you risk death. Yet if we adhere to the environmental lobby’s premise, we should as a matter of caution cease these activities – crazy? My point and sentiments in a nutshell!

The North Atlantic Treaty Organization “cri de coeur”

The North Atlantic Treaty Organization (NATO) has since August 2003 taken on the responsibilities of command and co-ordination of the International Security Assistance Force (ISAF) in Afghanistan.

At this particular juncture, NATO forces are coming under increasing attacks, more ferocious in nature as the Taliban adopts more effective tactics such as the use of improvised explosive devices (IEDs), kidnapping and summary executions to name but a few.

I suspect that most people now accept the legitimacy of this NATO operation in light of the events of September 11, 2001. Unlike the war in Iraq, were my “suspicions” tell me the plurality of opinion was / is against the Iraq war, to which I hold contrarian views on; we can at least agree that principals that underpin the whole Afghanistan exercise is different but equal, and are laudable.

As it now stands, the aim of the alliance in Afghanistan is as follows:

To assist the Government of Afghanistan and the International Community in maintaining security within its area of operation. ISAF supports the Government of Afghanistan in expanding its authority to the rest of the country, and in providing a safe and secure environment conducive to free and fair elections, the spread of the rule of law, and the reconstruction of the country.

As the Taliban consolidates its ability to conduct what I could only conclude is a war of attrition; certain members of the NATO alliance find it more appropriate to adopt a posture akin to that of an ostrich, whereby, they would sooner bury their collective heads in the sand, exposing to all of us their “true” working parts.

By any measure, the United States, Great Britain, Canada and The Netherlands are unfairly shouldering the bulk of the heaviest fighting, as they are currently being forced to take on the most dangerous combat roles.

Conspicuous by their absence in the South or the East of Afghanistan(where the heavy fighting is), some our European partners namely - Germany, France, Italy and Spain make a mockery of the collective doctrine of the NATO alliance. These offending members not content to do anything that remotely resembles “heavy lifting” have inoculated themselves by hiding behind the use of caveats.

The use of caveats by some members of the alliance have prevented and will continue to prevent irrespective of additional troop numbers, because they conditionally prevent these members from actively engaging with the enemy. You may recollect the riots in Kabul of May 2006. Perhaps what is less well know is that as a result of such liberal use of caveats, some of these countries do not permit their troop to handle tear gas, one of the most effect tools in dealing with riots.

Irrespective of what the liberal elite of Europe would have us believe, it is NATO, not the European Union that has served us well in Europe since it’s inception on April 4, 1949. Any attempts to undermine this institutions role does a disservice to us all, and we should resist with rigor the attempts by the European “chattering classes” to undermined this institution and replace it with one created by Brussels and run by France and Germany. France has long established its credentials on NATO that much is not up for debate.

The summit currently taking place in Bucharest, Romania must have a successful outcome. What is at risk here is far greater than the political egos of Merkel, Sarkozy, Zapatero & Co. This is a war that that will be long in duration and high in cost. Make no mistake about it, the cost in not finishing, or following through to its end is far higher.

The Taliban is currently having little problems in moving through the tribal areas of Pakistan and Afghanistan. They are currently, if not already, are establishing secure supply lines, increasing the production of heroin, as well as other illegal activities which as a result increases their coffers with money.

Couple the above with weak and ineffective leadership by our European allies is merely a delayed recipe for disaster. Far worst is the result of an embolden Taliban with the money and means to do us all harm. We can not allow poor leadership and surreptitious political agendas to viciate that great institution - NATO

New Labour & the FSA Experiment - Res ipsa loquitur

The cacophony of background noise is a trademark of the political theatre a.k.a. - Prime Minister’s Questions (PMQ’s). But occasionally, one can make what I could only describe as rather telling observations.

David Cameron decided to use his “bag of six” – questions that is, to bludgeon the Prime Minster on the Financial Services Authority (FSA) inept handing of the Northern Rock crisis. Unfortunately for him, his observations on ineptitude were partially reciprocated, as he returned the favour; making a poor case for a valid argument.

The fact is we really need not look very far to see an excellent example of effective regulation in action – cue The Federal Reserve Board. Just take a look at how deftly the Fed dealt with the near collapse of Bear Stearns, and contrast this with the slipshod action or “inaction”, of the FSA in conjunction with BoE in dealing with a similar situation – the collapse of Northern Rock. Even as the dust is still settling, it is clear that the American approach of quasi-public regulation is far more superior. More importantly, the Fed as a unitary authority is an approach that while not perfect, has the benefit of pooling resources, and presenting itself to the banking industry as a sole place of reference.

While I am not quite ready to hitch my cart to the Tory economic engine, I most certainly support the Tories premise to hammer home the point that all this talk about New Labours economic prowess is just that – talk! Furthermore; the decision to split responsibilities of banking supervision and regulation between that of the Bank of England and the FSA have proven to be categorically short-sighted and economically sophomoric.

Yes, we all know the ability of Gordon Brown to verbally vomit statistics at will is amazing, if not of a mild autistic savant. However; The Tory party can rightfully argue that the decision to separate the powers of regulatory supervision between the FSA and the BoE was one of poor judgment.

I further opine that in light of FSA admitting in their own style that they are simply not up to the job, that the regulation of addressing:

• Banking panics;
• Striking a balance between private interests of banks and the centralized responsibility of the government;
• supervising and regulating banking institutions;
• maintain the stability of the financial system and containing systemic risk in financial markets;
• to be responsive to local liquidity needs
  

Be solely the domain of a quasi-public Bank of England. As a trader myself I have a keen interest in a stable and efficient market place. If the regulator of first instance can’t be trusted, relied upon or worst – proves incompetent, it affects us all. For all the talk from new Labour on prudence and stability, it’s only when things fail, that we get the accurate picture.

Res ipsa loquitur – it speaks for itself! The idea that the status quo of relying on the FSA to effectively deal with systemic risk and regulation in the banking sector, is clearly no longer a sustainable proposition. I fear however, that New Labours response to today’s report from the FSA will be genetically in the style of New Labour – more regulation! It really is the case that "less is more!"

More regulation in the area of banking would be the wrong response. What is needed here is calm insightful fortitude in dealing with issues in banking, against the current backdrop of “tight” credit markets. I know it would be the breaking of a lifetime habit for New Labour to instead look to the private sector for the experience necessary in dealing with and examining the types of risk that banks take.

The ability of the regulator to understand such operational banking risk, goes some way to pre-empting such catastrophic failures such as Northern Rock. The Bank of England is in the best position to understand this, it would be folly indeed to not re-examine this remit, and learn a few lesson from our cousins on the other side of the Atlantic – The Fed!

The Freshman’s Budget

A politician's words reveal less about what he thinks about his subject than what he thinks about his audience. George Will

The Chancellor today presented his budget to Parliament, and I have to tell you after watching and listing with keen interest, I was left recollecting about an interesting traffic sign I once saw – “slippery when wet”. This was a “budget”, and I use the term loosely, that was vexatious in the selective statistics used and intellectually pretentious.

Chancellor Brown, pardon – Darling, took my breath away, when he said: “Britain is more resilient and more prepared to deal with global shocks.” Inebriating incredulity on the Chancellors part comes to mind. The fact is, for all the right decision that the government took in 1997, such as giving the Bank of England its independence; we are now at a state where government finance is in bad shape. Why? Simple, this government failed to set aside or ensure preparedness for the “rainy season”, a staple of all economic cycles.

The government has stated, and nauseatingly so, their adherence to the “golden rule”
http://en.wikipedia.org/wiki/Golden_Rule_(fiscal_policy) - Huff and puff all you want Chancellor that rule is the only thing blown over. Mr Cameron was correct when he said, the trade deficit was set to rise to a record £72bn while the rate of investment was "slumping" by two thirds and debt as a share of GDP, if Northern Rock was included, was 43.8%. Clearly this would "bust" the chancellor's fiscal rules.

In October's pre-budget report, Mr Darling forecast growth at 2.0-2.5 percent in 2008 and 2.5-3.0 percent in 2009. This contrasted sharply with a poll conducted by Reuters of 60 economists, whom put economic growth at 1.8 percent in 2008, picking up only slightly to 1.9 percent in 2009.

The persistent conviction of the Chancellor that the economic weather can safely be described as a slight overcast seems to be grossly at odds with most economists who see the high risk of an oncoming storm.

One could not ignore the incessant use of the word “stability”, as if somehow repeated Ad nauseam would produce the result. I would have thought that if stability were desired, a posture of tax cutting to stimulate the economy would have been a more sane prescription.

I am incredulous of stories about “green taxes”. It is patently clear to me that this governments wish to relegate plastic bags, excessively tax alcohol and the automobile, is nothing more than government by authoritative decree. And anyway, we are not stupid; we know a tax jack when we see and feel one. This is really a case of – “I just need the money!

Jacqui Smith, The Charlatan Poseur

The political nomenclature of today throws up some rather interesting results when one begins to scrutinize New Labour. Leadership has been substituted with political ignobility, and frankness, with that of subterfuge. The most deleterious act this week, would have to be the failure of Parliament to live up to its promise of giving us the people the right to vote in a referendum, on the European Constitution. I am mindful to point out that this was promised by all major parties in the last general election.

Cowardice's it seems, knows no lower boundry. Just when you though this government could sink no further, they surprise you. I refer to this governments fervent belief that George Orwell’s novel, “Nineteen Eighty-Four” was a treatise to be adopted. New Labour it appears, are determined to whittle us down to nothing more than a bar code, supporting as they do the implementation of identity cards.

The most interesting fact to come out of the whole discussion on ID cards, is that Home Secretary Jacqui Smith is using the “back door”, to get the ID card into the building. This “sleight of hand” would make even Robert Houdin blush!

What is most egregious of all, is the copious amounts of unnecessary and intrusive information that the government wishes to collect on us. Name and address just will not suffice this insatiable appetite to “know us just a little better”.

As a voter, I am deeply concerned with the government’s impetus to implement ID cards and I can’t for the life of me determine why they feel it a necessity to collect the amount of information they intend. My “red line” has been drawn firmly, boldly and forcibly on the topic of biometric data collection. Why the government feels my DNA is their property I will never understand.

If you had asked me about a year ago, was I in favour of identity cards, I would have said yes. However in light of the events of the last 12 months, the government has proven beyond all reasonable doubt, that they are incompetent and indifferent with we the citizens personal data. I could no longer support this position. When you couple this fact with the notion that the government had always intended to go further with the information that they wish to collect, I could only come to the conclusion that permission would be tantamount to ascribing the Orwellian premise.

For all the talk that Jacqui Smith puts out, with her promise to engage with the people on this topic, one can’ help but conclude that she, and New Labour to which she represent at its upper echelons, is nothing more than a charlatan poseur. We all fell this once; it won’t be second time lucky!

The European Beast is feeding again!

I have been following with great interest the ratification of the European Union Constitution as it makes its way through parliament. Yes, I called it the European Union Constitution, for that’s exactly what it is. Any attempt to refer to it as something else, is disingenuous at best, or dissembling at its worst.

You don’t have to take my word when I say it is the same old constitution that the liberal elite of Europe tried to pass and failed miserably in 2005, when it was rejected by the people of The Netherlands and France, here are some quotes worth repeating:

Germany

“The substance of the Constitution is preserved. That is a fact.”

(Angela Merkel, German Chancellor, Telegraph, 29 June 2007)

Spain

“We have not let a single substantial point of the Constitutional Treaty go… It is,

without a doubt, much more than a treaty. This is a project of foundational

character, a treaty for a new Europe.”

(Jose Zapatero, Spanish Prime Minister, speech, 27 June 2007)

Ireland

“90 per cent of it is still there... these changes haven't made any dramatic change

to the substance of what was agreed back in 2004.”

(Bertie Ahern, Irish Taoiseach, Irish Independent, 24 June 2007)

Italy

“As for our conditions… I outlined four red lines with respect to the text of the

Constitution: to keep a permanent president of the EU, to keep the single overseer

for foreign policy and a common diplomatic service, to keep the extension of

majority voting, to keep the single legal personality of the Union. All of this has

stayed.”

(Romano Prodi, Italian Prime Minister, La Repubblica, 24 June 2007)

Still not convinced? Here is one quote from the author of the original constitution:

“This text is, in fact, a rerun of a great part of the substance of the Constitutional

Treaty.”

(Valery Giscard d’Estaing, Telegraph, 27 June 2007)

This clearly reinforces my belief that the bureaucratic beast, a.k.a. The EU wishes to gorge itself further on powers hitherto the domain of member states. For the sake of clarity, and to ensure that there is sufficient “clear blue water”, between myself and others whom simply can’t stand or tolerate Europe at all, I need to make it clear that this is not the train I am hitching my cart to.

What I object to, and vehemently so, is the insatiable appetite of the European Union beast to emasculate national governments and their representatives of their fundamental purpose, of being accountable to the people they represent.

Proponents of this constitution can not argue with the fact that ratification would mean surrendering vetoes, in somewhere between 45 and 70 policy areas. The tactic of using gobbledygook to write and explain the constitution won’t work either. We the public can see this for exactly what it is – get the constitution through by any and all means necessary. Just look at what Belgian Foreign Minster said on the constitution:

"The aim of the Constitutional Treaty was to be more readable; the aim of this

treaty is to be unreadable… The Constitution aimed to be clear, whereas this

treaty had to be unclear. It is a success.”

(Flandreinfo, 23 June 2007)

This is breath taking! The politicians failed to win the argument and now they have decided in their collective wisdom, to precede full stop with their project irrespective of what we the public think. This can not be right! We are constantly told by New Labour and the Liberal Democrats that the EU is there for the people, which begs the question, which group of people?

Prime Minster Tony Blair in the last election promised that there would be a referendum on the constitution, and Gordon Brown went further as recently as June 24 2007, when he stated:

“The manifesto is what we put to the public. We've got to honour that manifesto. That is an issue of trust for me with the electorate.”

I will be most appreciative of anyone who can explain to me what part of “trust” did the Prime Minster have trouble understanding. Perhaps I just did not realize it was yet another “aspiration” of New Labour and not a promise. If we can’t count on the Prime Minster to tame the beast of Europe, we might as well pack up and go home.