Saturday, September 13, 2014

Tory fury as increasing aid budget becomes law: Conservative MPs ordered to vote in favour of proposed Bill

  • Ministers today backed a bill making it legally-binding to spend 0.7% on aid
  • Commitment means the Government will spend £12bn on aid next year
  • Tory MPs said aid spending should not rise while defence was being cut
  • One Conservative MP described it as a 'sop' to 'Guardian-reading liberals' 
  • But Lib Dem MP introducing the bill insisted it was 'the right thing to do'
  • Gordon Brown broke off campaigning in Scotland to back plan in Commons

A law which would force future governments to increase Britain’s bloated aid budget was voted through last night in the face of furious opposition from backbench Tory MPs.
Crucially, Conservative MPs were ordered to vote in favour of the proposed law, which would make the Government’s controversial policy of spending a minimum 0.7 per cent of national income on international aid a legal requirement.
It means Britain’s aid budget – which is already £12billion a year – will continue to grow if the economy grows, unless the law is repealed. 
Last night, one furious MP described it as a ‘sop’ to ‘Guardian-reading liberals’.
Ministers today backed a Lib Dem proposal to enshrine in law the Government's commitment to spend 0.7 per cent of GDP on foreign aid. Supplies of UK aid were dropped over northern Iraq last month to help fleeing Yazidis cornered by ISIS terrorists
Ministers today backed a Lib Dem proposal to enshrine in law the Government's commitment to spend 0.7 per cent of GDP on foreign aid. Supplies of UK aid were dropped over northern Iraq last month to help fleeing Yazidis cornered by ISIS terrorists
But Government support for the Bill, which was proposed by a backbench Liberal Democrat MP and is also backed by Labour, means it is much more likely to become law.
Significantly, it could also derail attempts by Tory MPs to pass into law a Bill for an EU referendum in 2017 by taking up limited debating time. 
A Liberal Democrat Bill on the ‘spare room subsidy’ is already on its way to the House of Lords and after yesterday’s vote, supporters of the EU referendum Bill will find it much more difficult to find the time to debate it.
 

A group of Tory backbenchers furiously opposed the aid Bill, warning about the dangers of waste and corruption in aid spending. 
Conservative MP for Shipley, Philip Davies, described the Bill as ‘gesture politics of the worst possible kind’. 
He added: ‘If you criticise Britain’s huge, often mismanaged, aid budget you are accused of not wanting to help the neediest in the world. [The Bill] says we are going to spend the same amount of money every single year in perpetuity.
Tory MP Philip Davies said the Bill was only going through Parliament to 'make a few middle-class, Guardian-reading, sandal-wearing, lentil-eating do-gooders' feel better about themselves
‘That is basically an acceptance that our assistance will fail, that it will not turn around a country’s fortunes or deal with the causes of poverty, and that it will just be a hand-out to make a few middle-class, Guardian-reading, sandal-wearing, lentil-eating do-gooders with a misguided guilt complex feel better about themselves. 
'It will do nothing to alleviate the real causes of poverty in those countries.’
Former Scotland Secretary Michael Moore introduced a private members bill today calling for the Government to commit to spending a minimum amount on foreign aid
Former Scotland Secretary Michael Moore introduced a private members bill today calling for the Government to commit to spending a minimum amount on foreign aid
He said that at a time of national austerity, huge increases in aid spending ‘at the same time as we have been making the case that we have got no money is completely and utterly ridiculous’.
Tory backbencher Sir Gerald Howarth asked why international aid spending was being singled out when defence spending was ‘allowed to go hang’. 
Sir Edward Leigh said Conservatives should be ‘judged not by how much we spend on something but by the value for money of what we achieve’.
However, International Development Minister Desmond Swayne backed the Bill, saying Britain’s aid spending could help reduce the number of migrants trying to arrive here from Calais.
He said: ‘There are all sorts of arguments to be had about whether it should be 0.7 per cent and a long debate might be had on that basis.
‘Indeed, we might be having one today ... but all I can say that as an elected politician I feel myself bound by commitments that I have made and I made a commitment at the last general election to 0.7 per cent.’
The Tory minister deflected criticisms from some of his own backbenchers, fighting off the claim that ‘charity should begin at home’.
Mr Swayne insisted international development aid is not charity, it is taxpayers' money spent in the national interest on things such as vaccination programmes for children.
He said: ‘Charity is what you dip your hand into your own pocket and distribute.
‘Taxpayers' money is taken from your pocket without your leave, with all the coercive power of the law behind it.
‘And it is essential therefore that it is spent in the national interest.’
Back from Scotland: Former prime minister Gordon Brown broke off from the independence referendum campaign  to back the plans in Westminster today
Back from Scotland: Former prime minister Gordon Brown broke off from the independence referendum campaign to back the plans in Westminster today
Labour’s shadow development secretary Jim Murphy and former prime minister Gordon Brown broke off from the independence referendum campaign in Scotland to back the plans in Westminster today.
Mr Murphy said: ‘For all the dry language of spending targets, goals, statistics and shortfalls to a scale of millions and billions, it is important not to forget what official development assistance is really about.
‘We live in a world where one million babies a year die on their first and only day of life. One in eight people go to bed hungry each and every night. 1.5 billion people are trapped in the brutality of conflict-affected and fragile states. 58 million children are unable to go to school and 20,000 under-five-year-olds die every year of easily curable diseases.
‘British aid works. The support we give changes lives.’
The Bill was tabled by former Scottish secretary Michael Moore, who said it would deliver ‘for the poorest in the world’. The Bill, which was voted through by 164 to six, now goes to committee stage and then to the House of Lords.
All three major parties pledged to support the aid target in their manifestos, and it was part of the Coalition agreement.
The last Labour government made law legally-binding targets for child poverty and climate change. The 2008 Climate Change Act included the target of reducing the UK’s greenhouse gas emissions by at least 80 per cent from its 1990 level by 2050. A 2010 law set a target of ‘ending child poverty’ by 2020.
It is thought that any government not meeting the targets as set out in law could face a legal challenge requiring it to do so. 

Putin looks to Asia as EU announces new sanctions


Putin looks to Asia as EU announces new sanctions

"I believe it is necessary to further improve the efficiency of our interaction to meet the challenges of the time," Putin said at a summit of the Shanghai Cooperation Organisation

World Bulletin/News Desk
President Vladimir Putin called on Friday for new efforts to strengthen cooperation with China and ex-Soviet republics in Central Asia after the European Union tightened sanctions on Russia over the Ukraine crisis.
In comments at a meeting in Tajikistan, he made no direct reference to the sanctions but has been trying to build economic ties with Asia, and particularly China, to reduce their impact on Russia's economy.
"I believe it is necessary to further improve the efficiency of our interaction to meet the challenges of the time," Putin said at a summit of the Shanghai Cooperation Organisation (SCO), a security bloc, in the Tajik capital Dushanbe.
"Moreover, the situation in the world is difficult, there are a growing number of threats."
Putin said the leaders had discussed the situation in Ukraine, where Moscow denies arming pro-Russian separatists waging a rebellion against Kiev's rule or sending in troops to support them.
Expressing concern about the state of the global economy, he added: "With this in mind, I propose we consider updating the SCO's programme of trade and economic cooperation and the plan for its implementation."
The SCO groups China, Russia, Tajikistan, Kazakhstan, Kyrgyzstan and Uzbekistan.

CURRENCY WAR! China, Argentina, Russia, Iran Bypass U.S. Dollar!


Argentina to get $1bn in currency swap with China before end of 2014
On August 5, Russia and Iran signed a Memorandum of Understanding (MoU) on oil-for-goods exchanges under which Russia could take 500,000 BPD of Iranian oil exports in returns for providing goods, services and equipment to Iran.
Russia seeks safe haven in gold, away from dollar and euro
Ecuador’s ‘digital currency’ explained
Fed: Under Obama, only the richest 10 percent saw incomes rise
IMF warns of market fallout from a Scottish split
Marc Faber: McDonald’s tells us why the market will collapse

Meet The Puppetmasters: Here Are The 25 Most Politically Influential Billionaires In The US

It has been said, correctly, if only by those who see beyond the false "left-right" paradigm, that those who call the shots in US politics, and thus American socio-economics, are not so much America's lobbying corporations, but the people behind the corporations - i.e., those who have the money... all of it. Obviously, nobody has more money than America's billionaires. So who are the true puppetmasters who determine America's fate?
For one answer we turn to Brookings Institution Governance Studies Director Darrell West in whose upcoming book "Billionaires: Reflections on the Upper Crust" examines the political use of great wealth, including campaign expenditures, activism through nonprofit organizations and foundations, holding public office, media ownership, policy thought leadership, and behind the scenes influence. Most importantly, it ranks the 25 most influential American billionaires.
So from the Koch Brothers, to Bloomberg, to Tom Steyer, all the way to Marc Andreesen, Donald Trump and Alice Walton, here they are, whether readers agree with the ranking or not.


For more on West' perspectives and reasons for his rankings, below is a clip of the author with Bloomberg's Betty Liu:

America’s Poor, Deeper in Debt Than Ever

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Mark Whitehouse
U.S. consumers have made a lot of progress in paring down the extreme debt loads that helped make the 2008 financial crisis such an epochal disaster. Fresh data from the Federal Reserve, though, offer an important caveat: Millions of the poorest families are still very deep in the hole — and might be getting deeper.
The triennial Survey of Consumer Finances, released by the Fed last week, confirms an overall improvement in the state of U.S. household finances. The average debt burden for all families stood at about 105 percent of pretax income in 2013, down from about 125 percent in 2010 and the lowest level since the 2001 survey.
The improved finances, along with more recent signs that consumers are feeling comfortable about borrowing again, has given some economists cause for optimism: The more progress households make in getting out from under their debts, the logic goes, the greater the chances that renewed spending will boost growth.

WARNING: Keep Ignoring John Hussman, Robert Shiller, Jeremy Grantham, And All The Other Data Oriented People Who Honestly Assess The Stock Market And Are Positive We Are In For A Big Fall.

Keep ignoring John Hussman, Robert Shiller, Jeremy Grantham, and all the other data oriented people who honestly assess the stock market and are positive we are in for a big fall. The market is so overvalued at this point that it won’t even need an external event to trigger a crash. Gravity always wins in the end.

Opinion: Being a stock-market bull just got a lot harder

Published: Sept 9, 2014 6:00 a.m. ET
The U.S. is overvalued when using many different metrics
Reuters
It’s hard to ignore the cyclically adjusted price-to-earnings ratio (CAPE) of stocks pioneered by Yale professor Robert Shiller. The CAPE has been higher only three times in the past: in 1929, 2000 and 2007.
London (MarketWatch) — Making the bullish case is getting a lot harder.
Let’s say that you want to wriggle out from underneath the bearish conclusions of the cyclically adjusted price-to-earnings ratio (CAPE), which for some time now has been very bearish. Sidestepping that conclusion turns out to be a lot harder than you think.
The CAPE is the version of the traditional P/E ratio that has been championed by Yale University finance professor (and recent Nobel laureate) Robert Shiller. Currently, for example, the CAPE stands at 25.69, which is 55% higher than its average back to the late 1800s of 16.55 and 61% higher than the ratio’s median level of 15.95. In fact, there have been only three times since the 1880s when the CAPE has been higher than where it stands today: 1929, 2000 and 2007 — all three of which, of course, coincided with major market highs.
The CAPE isn’t a perfect indicator, as Shiller himself will tell you. There are legitimate reasons to question its approach to market valuation. In addition, the bulls have shamelessly come up with myriad other “reasons” not to pay attention to it.
But Mebane Faber, chief investment officer at Cambria Investment Management, has this to say to all these so-called CAPE haters: “Fine, don’t use it. Let’s substitute in book and cash flows, two totally different metrics.”
Unfortunately for the bulls, the conclusion of looking at the market from those alternate perspectives is almost identically bearish.
Courtesy of data from Ned Davis Research, Faber ranked 43 countries’ stock markets around the world according to their relative valuations according to the CAPE as well as to cyclically adjusted ratios of price-to-book, price-to-cash flow, and price-to-dividend. When ranked according to the CAPE, for example, with top ranking going to the most undervalued country’s stock market, the U.S. is in 41st place. Only two countries are more overvalued according to this indicator.
Indicator US market’s rank out of 43 countries, with #1 being most undervalued
CAPE 41
Cyclically-adjusted price-to-book ratio 37
Cyclically-adjusted price-to-dividend ratio 39
Cycilcally-adjusted price-to-cash-flows ratio 36
The accompanying table shows where the U.S. market would rank according to the other three indicators. Notice that ignoring the CAPE doesn’t get the bulls very far.
To argue that the U.S. stock market isn’t overvalued, in other words, the bulls not only have to dismiss the CAPE but also argue why the U.S. market should be priced so richly relative to book value, cash flows and dividends.
That’s not necessarily impossible. But it is clear that the bulls have a lot more work cut out for them.
Furthermore, even if the bearish conclusions of these diverse indicators turn out to be right, you should know that they are long-term indicators, telling you very little about the market’s near-term direction. My favorite analogy to describe the situation comes from Ben Inker, co-head of the asset-allocation team at Boston-based money management firm GMO.
He likens the market to a leaf in a hurricane: “You have no idea where the leaf will be a minute or an hour from now,” he says. “But eventually gravity will win out and it will land on the ground.”

Chinese Premier Li: Chinese Contribution To The Global Economy Hit 30% In 2013

Live Squawk @livesquawk
Chinese Premier Li: Chinese Contribution To The Global Economy Hit 30% In 2013

“A third of US GDP is now going to repay interest & principal on loans” – GordonTLong

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"a third of US GDP is now going to repay interest & principal on loans" - @GordonTLong

Richard Branson: Alternative Currencies Have Bright Future!