Brown's law

First Gordon Brown ignored the advice of civil servants and embarked upon his devastating raid on the nation's pensions.  Now we learn from The Sunday Times that he ignored the advice of the Bank of England when, from 1999 to 2002, he sold much of the nation's gold reserve.  His pig-headedness cost the nation an estimated £2bn.

Hardly a day goes by at the moment without a damaging headline about Gordon Brown.  This website isn't complaining - oh no - but it is interesting that stories that previously couldn't be sold to newspapers are suddenly getting splashed across front pages - day after day after day.  Both the pensions and gold sale stories are not new stories.  The Tories have been trying to get the nation angered at them on many previous occasions.

What has changed is that the media are now in herd-like pursuit of Brown.  Probably because they want a leadership contest.

I suggest therefore that we should institute Brown's law and Brown's law states the following:

"80% of the size of a story depends upon the mood of the journalistic pack and 20% on the intrinsic importance of the underlying news event."

Or perhaps it should be 90% to 10%?

Click on the graphic on the right to see a Sunday Times chart on the disastrous timing of Gordon Brown's gold sales >>>

Related link: Gordon Brown and the real New Labour project

Comments

[Jake]

The relationship of Brown with the Labour party has been likened to that of the Austrian teenager Victoria Kampusch whose kidnapper kept her locked up in a cellar for 8 years - except that , for Labour , it has been longer than that . She formed a, sort of, bond ( Stolkholm Syndrome ) with her jailer who allowed her out for walks on occasion but who generally took extreme care to keep her physically and mentally incarcerated .
She didn't really like it very much but was unclear as to why .
Thus also Brown / Labour .

One day Labour might run away .

[Oberon Houston]

Yes it's interesting that The Times (& Sunday Times) are gunning for Brown. I have noticed that for the last 12 months or so the stories these two papers have been publishing have been getting progressively more critical so the balance is now even keeled. The BBC, however, are still very pro-Brown. What Murdoch is thinking however is still a mystery to me. But didn't he say that he thought Brown had spent moeny ineffectively and that it was too early to make a call on Cameron? Still it goes to show where real power lies in this Country, depressing.

[Curly]

The Sale of the Century!

[Curly]

Err,......hang on which Browne are we talking about here?

[John Coles]

I was a "wonderful" bit of timing - it marked the very bottom of a decade-long bear market.
If ever this deranged psychological wreck recommends investing in shares, it will be one of the best "sell" signals you can ever expect.

[Oberon Houston]

Nice gameshow!

The aim is to raise as much money as possible and waste it as quickly as you can.

Round1. (easy warm-up) Sell the gold reserves off, despite the short term dip in the market.
Round 2. Get the civil service to compile a list of assets for sale from the worldwide assets register then sell the nations silver. Bonus point for sly moves like binning the Royal Yacht and sending it to rot in Leith.
Round 3. Tax pensions just as the markets are falling and land a windfall tax on utility companies. Note that there are no points for returning windfall cash to the bill payers.
Round 4. Drastically reduce budgets for departments who serve people you don’t like. Double points for screwing farmers and the MoD.
Round 5. Quickfire Round: Try to borrow as much money as you can, 2x bonus if you can hide it from the books – try PFI!
Round 6. Blow it all on the NHS and move on to another subject, like education.
Round 7. Blame it on the Tories round. Extra points if you can use tricks like emotional blackmail, frighten old people, get people dependant on you, construct a welfare trap or even give kids nightmares. Don’t forget you can lie as much as you like!! Anything goes!!

[David Belchamber]

A number of us have tried to keep this story fresh over the last year or so because it really does highlight Brown's appalling judgment. I think from memory that he compounded the error by announcing his intentions in advance.
Possibly someone (Comstock ? or more likely Mark W) could confirm or deny that.
Anyway,Gordon Waste-a-Lot has chucked a huge part of our reserves away; the pertinent question is: what did he do with the proceeds? Have they been frittered away to pay for the billions lost on the tax credits fiasco?
These were assets and should not have been spent on revenue items.

[Oberon Houston]

Possibly I have been unkind in saying Brown hates the MoD. Just after gaining office the Defense Sec. Robertson said he had been asked to approve a £23million refot for a sub. "Don't approve it" Brown said, "Ask me where" Robertson replied. "Where said Broon", "Rosyth" (his constituency), "Oh well thats okay then...ha ha ha".

True Story.

[Fred Baker]

Socialists prefer a deprived electorate which must rely on the state for hand outs. That is the reason why Labour does so well in Scotland and why so much immigration from the third world is allowed.
It makes sense for Brown to sell at a low price and buy high.
His often used phrase “Good House Keeping” does in fact mean keeping power in the House of Commons.

[michael mcgough]

Isn't the real story his reason for selling the gold and not the loss .Bang on about that!

[Oberon Houston]

Correct. He sold at market prices, nobody can refute that, so not a real problem. Where did the money go, and who owned the gold? Thats a question.

[michael mcgough]

Weren't the proceeds invested in other 'assets'?

[Fred Baker]

"He sold at market prices"

Yes, at the bottom of the market!

He bought Euros, to pave the way for joining the Euro. Euros actually went up faster than gold because bullion buyers were put off for some time.

He actually informed market makers and all of his forth coming sales! What a Wally?

[Oberon Houston]

I'm sorry Fred but anyone could have bought or sold at that price, and they didn't, he can't be blamed for 'losing' on the sale. The sale itself however is a different story.

[michael mcgough]

"He bought Euros"-----fool's gold

That's the story

[Ted]

Hat tip to Man Who Would Be King - the graphical evidence of Brown's stupidity
http://www.marketoracle.co.uk/Article670.html

[Oberon Houston]

Euros have been steady as far as I know, but is there anything in this story, tell me more!

[michael mcgough]

What about Railtrack,what advice was received from major City firms,Andersens,CSFB,CMSCMck etc?

[Annabel Herriott]

I'm afraid dear Gordon has been working from the script of Brave New World. We need to identify what he has been using as Soma, to keep the Proles quiet.

[Oberon Houston]

Michael - The person to look at is Brown's special advisor Shriti Vadera. Ex investment banker and treasury advisor on Public-Private partnerships. she dismissed the interests of small private shareholders of Railtrack, many of them old-age pensioners whose savings were invested in the company, as "grannies" who might, in the collapse of their company, "lose their blouses". Bower's biography of Brown covers this episode in gret detail.

[William Norton]

Brown's argument - which is Blairism par excellence - was that it was necessary to modernise the Bank of England's reserves by moving out of gold (old-fashioned, and a dud investment for years previously) and into the euro, which was just coming into place. Cut away the surface drivel and, love it or loathe it, the euro is actually used by a few major economies, so it makes sense to have reserves held in euros and you can see where Brown was coming from. It's not as obviously a dud idea as, say, joining a fixed exchange rate system on an over-valued currency.

So far, so-so. Brown did announce the sale in advance: and everyone told him at the time he was standing on a street corner and handing out tenners for free to every passing gold trader. Gold price duly dips to price the news into the market ahead of the sale. Through clenched teeth, in fairness, Brown was more or less forced to announce the sale in advance to avoid accusations (=writs) that he was manipulating the gold market. There's rules about these things.

The real cock-up, then, wasn't the underlying decision (which turns out to have been wrong in hindsight, but a charitable man would give him the benefit of the doubt) or the announcement (which given the scale of the decision was more or less forced on him): the cock-up was deciding to make such a large shift so quickly - which betrays a genuine ignorance of how markets operate and are likely to react.

What the pillock should have said is: we are looking over time to rebalance the reserves; gradual shift from gold to euro at prudent rate as market will bear; no fixed target in mind; you never know we might end up in the euro one day (but not on my watch); in the fullness of time; broad sunlit uplands; motherhood and apple pie; mankind will never know hunger again waffle waffle etc etc. Then left it to the Bank to handle it as they thought best and when the prices moved adversely the policy could have been buried decently.

[Oberon Houston]

A good balanced summary William. Thanks.

[George Hinton]

Just goes to demonstate, that the media have their own vested interests and despite their trumpeting, they do not act for the good of all or bother to inform.
A demonstration of the power of the press, the manner in which it has thwarted the Tories messages regarding NuLab, and the way in which it has frustrated due electoral process and the dissemination of information.
Free press?, free country? I suggest a radical re-think.

[Oberon Houston]

...and here he is on YouTube... very good...

http://www.youtube.com/watch?v=nMyoOTHzgPw

...ps I didnt know Chelsea barracks were being flogged too. Will there be anything left when he goes?

[David Sergeant]

Just thought you might like to hear Trade Union reaction to one of Brown's government cuts.

He said: "These cuts are unjustified and
the only reason they are being made is to meet the Chancellor's civil service job cull target.

"This government obviously cares little about the vulnerable people in society who rely on benefits to survive, or the hard working staff who deliver the benefit."

[Effie Notts]

Can anybody tell me how much Lamonts pig-headedness cost the nation? I would wager that it would make an estimated £2bn look like really small beer.
Who was the Clown that was advisor to Lamont can someone remind me please