Matt Buck’s Hack Cartoons Diary

Measurements of recession change depending on the political and economic beliefs of the times. In the recent past in the UK, recessions have been measured by perceptions of ‘growth’ in national economic activity, so the second definition at the last link is the relevant one.

Of course, the government is very pleased to see today’s news that the UK is now growing again (0.1% in the last quarter – BBC report.) However, every set of statistical information has something called a margin for error which gives some allowance for inaccurate information and this puts this growth into perspective.

Even if we are growing again, the contraction in economic activity that has taken place over the past two years means we are growing again from a very much lower base than previously. You can blame that on the recession (rather perhaps than individual banks, central bankers or politicians) but, if you do, don’t forget to ask yourself what caused it.

The Telegraph reports on the marketplace squabble between BT and Virgin media over faster access ADSL lines.

It looks as if the long-running battle for control of the Birmingham-based chocolate manufacturer, Cadbury, will result in a takeover by the American conglomerate, Kraft. The Board of Cadbury are recommending acceptance of the American firm’s last takeover offer. Often institutional investors and ‘Johnny-come-latelys’ such as hedge funds (who buy into stock on the expectation of a deal) make some serious money as it is finally approved by shareholders.

Updated 12th January 2015: The takeover was the start of the end of the world as The Independent explains.

Reuters report on full body scanning at airports in the EU.

There are times when old imagery is irresistible to a cartoonist. Yesterday  was one of those occasions as Alastair Campbell, Tony Blair’s former Press Secretary, gave evidence to the Chilcot Inquiry on the intelligence published before the invasion of Iraq. Francis Barraud’s original picture of  Nipper the dog and the cylinder phonograph has inspired a lot of satire over the years. The version of the image most of us parody features a disk gramophone because that was what was being marketed and sold at the time. Barraud’s image is properly iconic, in that it became part of many peoples everyday life through its association with the recording firm HMV.

Cristiano Ronaldo‘s last gift to his former club was to help keep the heavily indebted football club out of the very deepest red with his sale to Real Madrid. When the English football club was purchased by the Glazer family in 2005 the new owners borrowed very heavily against Man Utd’s future earnings. It is in this context The New York Times notes the second round of debt refinancing which the club’s owners are making since the purchase. This is Money explains how the debt financing operates. Despite Manchester United’s enormous annual turnover it owes something more than £60m in interest payments every year on the outstanding capital debt of something close to £700m. The renegotiation of debt deals suggests financial strain and if the Glazer’s couldn’t meet payments, or renegotiate them, the club would belong to a selection of US hedge funds.Wikipedia lists the creditors as Citadel, Och-Ziff Capital Management Group and Perry Capital.

Clearly, Man Utd need to keep winning and stay popular.

Kudos to Keith Law for passing the how-to-make-a-parody test.

The  full gory story of the Robinsons (Northern Ireland’s first couple) can be followed in detail at Slugger O’Toole. The BBC Spotlight programme which openly accused the wife of the first minister of corruption is available on iPlayer.

So, the 2010 election campaign in which no one talks about the issue has started. We know it has because expensive poster sites have been purchased. It’s going to be a tiresome few months while respective campaigners batter glossed messages back and forth and the potential voters look for something more enlightening, or productive to do.

The essential issue, which will be avoided as much as possible, are  how the cuts in wages, public services and the rises in taxation made inevitable by the gift of money to the insolvent financial houses will be managed.

The ‘emergency’ budget following the election will be brutal whoever wins. Social distress (a euphemism for further unemployment and mass protest) may come in the wake of wage cuts and job losses in the public sector later in the year.

On the party political front, Labour are a mess, unable to ditch Gordon Brown, a massively unpopular (and probably unhappy) leader. They seem to need an argument and a leadership election about what they are for. The Tories have a ‘flawless’ front man in David Cameron they appear to neither particularly  want or like, but they will be loyal while he holds the prospect of a general election victory after 12 years in opposition. (The launch of the first Conservative poster may reveal an explicit Cameron not Conservative sale.) After the election and probably in office, the internal party loyalty will be more prone to fracture, perhaps even under pressure from business interests lobbying about the need for entry to the Euro, especially if sterling continues to be devalued to inflate away the enormous national debt.

Nick Clegg, leader of the Lib Dems and the other minority nationalist parties will find themselves courted as potential partners in any possible coalition or minority government should the result be as messy and close as some predict.

More unpredictable general problems are the after effects of printing money to prop up the economy during 2009 (quantitative easing), the collapse in sterling relative to the Euro and the Dollar and the price of interest payable (yields) on UK government debt (gilts). The Chancellor (of the Treasury) and the Governor (of the Bank of England) have to try and sell record volumes of gilts to finance future national spending.

When asked for something optimistic to add to this speculative post, a close collaborator said, we may not need an election for another four years. Some people also hold out hope for Fabio Capello’s England team in the World Cup. (Labour are bound to roll out the old line from Harold Wilson about only winning it under a Labour government…)

Perhaps the weather will also improve. Please add reasons any more reasons to be cheerful in the comments below if any spring to mind. Happy 2010.

A virginal Alastair Darling features in this drawing about the results of the immaculate conception between the financial gods and mere political baggage carriers.

Best wishes for the new year of two thousand and ten. Is anyone else intrigued by the current mode for the phrase twenty ten? Sometimes this sort of shorthand makes me think we are only seeing half of the picture. 😉

Happy time off* to one and all.

* if and when you get it.