Barrel Strength

Obama, the first Canadian President.

My conservative meter is barely moving. The needle of concern hovers over the zero mark. I have conservative friends who were predicting the apocalypse when Obama would ascend to the Oval Office. I could perceive no such danger. I still cannot.

His appointments have been sensible for the most part. The Dark Lord has legitimate concerns for the appointment of a science advisor who has swallowed global warming Kool-Aid. The rest of them seem quite unexceptionable.

The tone is appealing. The portrait of all four living Presidents in the Oval Office was a powerful signal that the new man is accepted as a peer by the Bushes and by the Democrats.  The public statements seem designed to calm the troubled waters.

Am I missing something here? Last night it came to me. Obama is a Canadian. He understands that half the nation did not vote for him, and he has to earn their trust. Yes, he will appoint liberals to the Supreme Court and I will not like their inclinations and decisions. But so far the whole message of Obama seems designed to quell the anxiety of Americans who did not vote for him that the economy will be better managed than it was under Bush the Younger, and that the quality of government appointments will be taken more seriously.

My gravest criticism of Bush the Younger was that the quality of government apointees to run various federal agencies was in several cases inexcusably bad – I think of the FCC and the Emergency Measures Organization. Others could be found equally bad.

Iraq – we have won

Afghanistan – we do not know yet

The quality of management and leadeship in the organs of the US government – appalling.

Where the Republicans had taken their own Kool-Aid, in my opinion, was the belief that since government did not matter, government appointments did not matter. Wrong on both counts.

If the Obama presidency signals a return to the belief that government matters to the health and wealth of the nation, it will have achieved something important immediately.

There is something strangely Canadian about the US President-Elect. A notion that one governs from the middle, not the edges. This is the vibration I have been detecting. I hope I am not mistaken.

With apologies to Leonard Cohen.

The poor get angry, the rich get rich
Thats how it goes
Everybody knows

Cohen – “Everybody Knows”

The current events in the world provide a sober reminder of how tenuous life can be.  The Cold War dividend is a distant memory and almost totally forgotten.  How did things change so suddenly?  Nature abhors vacuum and the disappearance of collectivism led to a void that was replaced by Islam.  The ascendancy of Islam, in secular countries such as UK, has now led to great deal of anger among the poor whites.

The research by the Department for Communities and Local Government found that white working-class communities felt they had been “betrayed” and abandoned by the establishment, which no longer had their concerns at heart.

The Communities Secretary, Hazel Blears, said that politicians had to start engaging with the disenchantment among poorer, white sections of society in order to combat growing “myths” over the treatment of immigrants.

Her department’s report suggested, she said, that the resentment, unfairness and disempowerment perceived by the group together with the absence of an “open and honest discussion” about immigration had created fertile ground for the far-right to exploit.

The Communities Secretary might want to consider some changes very quickly before her department becomes a “myth” as well.  Meanwhile the rich have their own worries.

Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or “paper” proxies.

That is how it goes till the next revolution.

The continuing decline in interest rates in UK, the lowest since the Bank of England was formed in 1694, could lead to financial events that were never contemplated.

Lawyers suggested that if rates dropped further, borrowers could end up having their mortgage paid for them by their bank.

Eddie Goldsmith, of property law firm Goldsmith Williams, said: “This interest rate cut is bringing lenders and borrowers perilously close to a bloody conflict.

“Many lenders will never have taken into account the prospect of such a drop in rates and will have their lawyers scurrying back to their offices to look at the small print of their mortgage conditions as the prospect of having to pay their borrowers is to awful to contemplate.”

The majority of borrowers with a tracker deal pay the bank rate, plus a percentage on top. But some deals available just over a year ago allowed borrowers to pay the bank rate minus a percentage.

If the bank rate falls much further, these borrowers could be paying negative interest on their mortgage.

In a world where the word “unprecedented” is bandied about recklessly, this is truly unprecedented and mind boggling.  Theoretically the rates can go negative in a deflationary environment, but nobody expected it to be that way in practice.