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  The pound is today trading at the top of its post-Brexit referendum range against the euro near €1.20. Credit default swaps (CDS), which measure bankruptcy risk on five-year UK debt, are a well-behaved 23 points,  lower than for the US (31), France (35), Canada (40), China (55), Italy (56), Saudi Arabia (62) and Brazil (171). The notion that Britain may soon need an IMF bailout akin to the sterling crisis in 1976 plays fast and loose with historical context.  “It is nonsense,” said Dario Perkins, global strategist at TS Lombard. Denis Healey was borrowing in dollars, which the Bank of England cannot print, in order to defend an indefensible exchange rate.  Nor is this anything like the ERM crisis in 1992, when the Bank of England had to raise rates to 15pc during a deepening recession and a property crash, in order to defend sterling against the D-Mark just as the Bundesbank was on the war path over Germany’s reunification boom.  Cardinal lesson: never subcont...

  Financial Times 22 January 2025 https://www.ft.com/content/3cad1c8d-0478-47d3-a2e1-9bae066de647 Tillbaka till Rolfs länktips 23 januari 2025 https://englundmacro.blogspot.com/2025/01/rolfs-lanktips-23-januari-2025.html

  David Lammy, the Foreign Secretary, has condemned the Kremlin’s “gangster threat” against The Times after the newspaper defended Ukraine’s assassination of a senior Russian general in Moscow. Telegraph 18 ecember 2024 https://www.telegraph.co.uk/world-news/2024/12/18/russia-ukraine-zelensky-putin-war-latest-news16/ Fed sänker styrräntan med 25 punkter till spannet 4,25-4,50  Men skruvar upp räntebanan. S&P 500 backar  Two cuts for 2025 if the economy grows steadily and inflation continues to decline.  In September, officials had penciled in around four cuts next year. https://www.wsj.com/economy/central-banking/fed-cuts-interest-rates-again-but-officials-expect-fewer-reductions-in-2025-70562fac What’s the Fed’s ‘Neutral’ Interest Rate? https://englundmacro.blogspot.com/2024/12/whats-feds-neutral-interest-rate.html Tunga ekonomer vill se dubbelsänkning https://englundmacro.blogspot.com/2024/12/tunga-ekonomer-vill-se-dubbelsankning.html Long-dated Treasury y...

  Nigel Farage said on Tuesday that Elon Musk was giving “serious thought” to providing a donation to his Reform UK party, as it seeks to bolster ties with president-elect Donald Trump. Financial Times 17 December 2024 https://www.ft.com/content/44e54af6-4976-429b-97db-695a817a2de6 När Nigel Farage och jag år 2002 talade i Westminster Abbeys kyrksal https://englundmacro.blogspot.com/2021/01/i-dag-31-december-2020-lamnar.html

  Prislappen är ännu okänd, men bedöms hamna någonstans mellan 100 och 150 miljarder kronor, kanske ännu mer. Mats Knutson SvT 16 december 2024 https://www.svt.se/nyheter/inrikes/svaraste-och-dyraste-forsvarsbeslutet-pa-decennier Ett av de alternativ som ska utredas är om Saab ska utveckla något nytt. https://www.svt.se/nyheter/inrikes/dronare-central-del-i-nasta-generations-stridsflyg   UK, Italy and Japan’s defence groups set up venture overseeing fighter jet project Company will be accountable for delivering next generation combat aircraft under Global Combat Air Programme Financial Times 15 December 2024 https://www.ft.com/content/23d10a02-533f-44a7-be34-194fd76375a7 Den svenska utrikespolitikens eviga fråga. Skall vi följa Tyskland eller skall vi följa England? https://englundmacro.blogspot.com/2024/03/den-svenska-utrikespolitikens-eviga.html

so the UK needs to cut a deal with Mauritius for a 99-year lease.   Still trying to rule the waves.  Photographer: Finnbarr Webster/Getty Images Now the two countries are in final negotiations of a vital deal that would turn sovereignty over to the Mauritians but — most important —  allow the US-UK base to remain. For decades, it has been one of the last overseas land areas claimed by Britain (along with Gibraltar, Bermuda, the Cayman Islands and a handful of others). Perhaps most important, Diego Garcia is capable of supporting the fleet of long-range strategic bombers — B-1B Lancers, stealthy B-2 Spirits and B-52 Stratofortresses. All could have a key role in any major attack on Iran. James Stavridis Bloomberg 5 december 2024   a retired US Navy admiral, former supreme allied commander of NATO  https://www.bloomberg.com/opinion/articles/2024-12-05/diego-garcia-is-a-us-navy-base-too-important-to-lose The sun has now officially set on Britain’s African...

  Season five of The Crown makes reference to Diana being a "Sloane Ranger." In honor of the new season, we're resurfacing our 2017 guide to the title. In 1982, The Official Sloane Ranger Handbook, an era-defining little work of humorous social anthropology, became an unlikely chart-topping success.  https://www.townandcountrymag.com/society/money-and-power/a10356763/sloane-ranger-handbook-princess-diana/ As The Official Sloane Ranger Handbook turns 40,  Tatler talks to its co-author Peter York on its relevance and legacy  https://www.tatler.com/article/as-the-official-sloane-ranger-handbook-turns-40-tatler-talks-to-its-co-author-peter-york-of-its-relevance-and-legacy Tillbaka till Rolfs länktips 6 december 2024 https://englundmacro.blogspot.com/2024/12/rolfs-lanktips-6-december-2024.html

  “The idea that we must choose between our allies, that somehow we’re with either America or Europe, is plain wrong,” said Sir Keir Starmer at the Lord Mayor’s Banquet. “ https://www.telegraph.co.uk/politics/2024/12/02/starmer-warns-trump-britain-wont-side-with-us-against-eu/ Trump is surrounding himself with economic appointees who can loosely be described as pro-British. Jamieson Greer, his pick for trade chief, wants America to pursue closer bilateral deals with countries that are geopolitically aligned, listing the UK as a “good start”. The Heritage Foundation’s Project 2025 is explicit, saying “trade with the post-Brexit UK needs urgent development before London slips back into the orbit of the EU”. Trump is packing his team with the key authors of this document. A Brexit enthusiast is to head the National Economic Council. Kevin Hassett It is impossible to predict how Trump will behave but he might well relish drawing the UK away from the EU The European project has failed a...

  Of all the hallowed American institutions that have experienced a loss in public esteem over the last few years, perhaps none has suffered a bigger drop than higher education.  Whether the explanation is sky-high tuition, grade inflation, moral confusion or, lately, the milk and cookies for students anxious about the election, the most egregious examples always seem to be from the most elite institutions. There is a way to restore trust, one of the most valuable courses of study is a curriculum developed a century ago, commonly known as Philosophy, Politics and Economics, or PPE. The PPE program is a course of study that has been offered at Oxford since the 1920s.  https://www.ox.ac.uk/admissions/undergraduate/courses/course-listing/philosophy-politics-and-economics Allison Schrager Bloomberg 4 december 2024 Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothe...

  Kemi Badenoch blir Torypartiets sjätte partiledare på mindre än åtta och ett halv år. SvT 2 november 2024 Kemi Badenoch blir ny partiledare för Tories efter Rishi Sunaks katastrofval | SVT Nyheter + In July’s UK election the Conservatives suffered, in their terms, a wipeout.  Their 121 seats on 24 per cent of the vote were their worst results since the party was formally established in the 1830s.  Her victory marks a doubling down on the post-Brexit swerve to the right that is the root of the party’s current travails.  The only road back to power is through restoring its appeal to the UK at large, not a narrow right flank. Both candidates, in different ways, misdiagnosed the cause of the Conservative rout as being insufficiently rightwing, particularly on immigration and tax.  In reality, many voters were so disenchanted with 14 years of Tory rule that they sought to dispatch the government by any means possible. FT Editorial 2 November 2024 https://www.ft.com...

 “We have the lowest tariffs of any nation in the world, and we relentlessly punish our own companies for doing business in America.  I intend to reverse this model and once again turn America into the manufacturing superpower of the world,” he said. Trump’s billionaire friends say his maximalist rhetoric should be understood as a deal-maker’s trick. Talk of 20pc tariffs across the board is a sledgehammer to smash down foreign barriers, says the hedge fund speculator Scott Bessent, a Soros veteran and candidate for treasury secretary. Protectionism worked for the British Empire in the specific circumstances of mass unemployment in the 1930s, when the Gold Standard had become a deflationary doomsday machine. Ambrose Evans-Pritchard Telegraph 25 October 2024 https://www.telegraph.co.uk/business/2024/10/25/trumps-nostalgia-19th-century-tariffs-alarming-implications/ Hur det kom sig att England övergav guldmyntfoten 1931 Många föreställer sig gärna att Englands beslut att överge g...

Germany nagged southern Europeans into austerity, but now its own pfennig-pinching ways look misguided.  A constitutional amendment limiting budget deficits, dating from Mrs Merkel’s time in 2009, has resulted in chronic underinvestment in public services.  Spending that could have been done at 0% interest might have made Germany fit for the 21st century.  Instead, bridges are literally collapsing and the train system is kaput due to previous neglect. The Economist 24 October 2024 https://www.economist.com/europe/2024/10/24/angela-who-merkels-legacy-looks-increasingly-terrible Den tyska grundlagen och skuldbromsen https://englundmacro.blogspot.com/2024/01/den-tyska-grundlagen-och-skuldbromsen.html The UK government will change its self-imposed debt rules in order to free up billions for infrastructure spending Rachel Reeves said that she would make a technical change to the way debt is measured which will allow it to fund extra investment "so that we can grow our economy ...

  The ECB still has the genes of the very inflation-resistant Bundesbank. The bloc has been far keener than the US to resort to austerity, and its economy has failed to grow anything like as fast Unemployment is very significantly higher. The ECB doesn’t have a full employment mandate like the Fed Europe’s politics are not propitious for the ECB to be at all hawkish.  The economic structure of the euro zone — which forced Mario Draghi to promise to do “whatever it takes” to save the currency from its sovereign debt crisis 12 years ago — is in question again.  The spread of French over German sovereign bond yields, the market’s measure of the perceived extra risk, is at almost exactly its level of the 2012 “whatever it takes” moment. Poland’s Prime Minister Donald Tusk — formerly president of the European Council and a great champion of the European project — created a shock over the weekend by announcing that his country was “temporarily suspending asylum rights.”  T...

  Smedjan 11 oktober 2024  https://timbro.se/smedjan/oavsett-ny-partiledare-blir-tories-mer-konservativa/ Tillbaka till Wall Street och Stockholm 12-13 oktober 2024 https://englundmacro.blogspot.com/2024/10/wall-street-och-stockholm-12-13-oktober.html

Oscar Wilde in an 1887 short story called The Canterville Ghost: “We have really everything in common with America nowadays, except, of course, language.” If you read Bloomberg Opinion this week, however, you might feel that the Mother Country and its former colony are ending their 250-year separation.  The points of convergence, unfortunately, are: soaring debt, bad health, poor education, ineffective government and, to borrow another cliché (from Dean Acheson), an inability to find a role in the world. Tobin Harshaw Bloomberg 22 september 2024   https://www.bloomberg.com/opinion/articles/2024-09-22/uk-and-us-debt-education-and-health-are-in-a-race-to-the-bottom

Starmer’s visit to Rome comes days after he met with US President Joe Biden in Washington.  They discussed whether to let Ukraine conduct long-range strikes in Russia with the Storm Shadow missiles guided by US navigational data, though Biden has so far resisted such a move out of concern it could escalate the war. He and Meloni are also due to discuss plans to tackle illegal migration, with Starmer keen to show progress on his election pledge to cut the number of people entering Britain via vessels crossing the English Channel. Starmer has appointed a new border security commander and has said he is “interested” in how Italy has reduced migration, in part by sending people to refugee camps in Albania. Bloomberg 15 September 2024 https://www.bloomberg.com/news/articles/2024-09-15/uk-s-starmer-seeks-italy-s-support-for-missiles-to-ukraine

Out of power and out of answers, the UK opposition struggles for direction. First, the good news for the next leader of the UK’s benighted Conservative party — the popularity of the new Labour government is tanking.  The bad news is that few people are listening to any of the five rivals for the Tory crown. That’s as it should be.  The party has only been mostly talking to itself for more than a decade and has been riven by feuding for most of that time.  In further bad news, the only performer on the right who gets a hearing isn’t a Conservative in the traditional sense, but Nigel Farage, leader of the populist Reform party.  Farage, Donald Trump’s buddy, has greater name recognition than all five Tory candidates combined. The Conservative predicament is hardly unique.  Across Europe, center-right parties have been trying and failing to solve the same electoral puzzle. Mass migration, “woke” social issues and the “green socialism” of net zero fuel the fires of ...

... after July’s election that saw an alliance of left-wing parties come top will fuel the sense of betrayal among voters who have in the past held their nose and supported Macron to block the far-right from power.  It’s Marine Le Pen who will feel emboldened: Her own group’s 143 seats will be crucial to helping Barnier’s government survive future confidence votes in France’s divided 577-seat parliament. if there’s one idea that’s likely to outlast Macron, it’s his plea for a stronger and more influential Europe — even Le Pen has backtracked on her plan to dump the euro. What Macron really needs is not just a prime minister, but a successor.  Margaret Thatcher, asked what her greatest achievement was, cited Tony Blair and New Labour — because it proved she had convinced her opponents to change their mind.  That hasn’t happened in France Lionel Laurent Bloomberg 5 september 2024 https://www.bloomberg.com/opinion/articles/2024-09-05/macron-s-choice-of-barnier-is-a-shrewd-bi...

  After Stuart’s defeat, tartan was restricted in its use for decades in Scotland through Great Britain’s Dress Act, but it had a fashionable revival in the early 19th century that received royal support, particularly from Queen Victoria.  The era saw an “elite appropriation” of Highland craft and lifestyle, Maxwell explained.  Previously a formidable sight to encounter on the battlefield, it now represented a different kind of pride in the form of status and wealth, making it an ideal textile to use in schools promoting prestige and heritage. CNN 5 September 2024 https://edition.cnn.com/2024/09/05/style/plaid-school-uniforms-dress-codes/index.html

  Everyone knows the real power at 10 Downing St. is Larry, a tabby who has ruled the roost since 2011.   Larry, officially the Chief Mouser to the Cabinet Office, has now outlasted five prime ministers—and their pets.  A British icon, he has his own X account, with 900K followers.  He is so well known that Downing St. has even reportedly made plans for how to break the news of his eventual death (Larry is 17).   Starmer, the sixth British leader of Larry’s tenure. Starmer, his wife, Victoria, and two teenage children moved into 10 Downing in July after a sweeping election victory. But another family member also moved in: JoJo, a male ginger cat.  JoJo has yet to meet Larry, and the family is working out how to engineer an encounter that doesn’t end in flying fur, according to sources familiar with the matter.  The Daily Mail tabloid warned of a “cat-astrophe” if the meeting goes wrong.   For now, JoJo and the new kitten are largely...