The Bewilderness

Price slaughter in bricks and mortar

We have inflation with the commodity superspike. We have deflation with the bursting of a credit bubble ('sounds like *crunch*'). Piled on top are higher taxes and prices and interest rates, unsupported by asset prices, debt or income. Rising costs and falling income render British electors miserable as the misery index indicated in the last ICM poll.

The question upon everyone's mind is how far, as the rolling bust removes all vestiges of easy credit.  To those who denied the possibility of house prices falling, there is only one answer: affordability. Once most people cannot afford to buy a house, they are too expensive. That is when prices start to feel the effects of economic gravity. Yet, before this could take effect, the credit crunch crunched. The bubble was deflated by the removal of confidence as the counterparty crisis swung into action. Result: mortgage and remortgage hell.

Banks and building societies have been withdrawing their most generous deals and increasing their rates rapidly over the past two weeks, leaving would-be home buyers with far fewer options when it comes to finding an affordable loan.

The Telegraph/Lombard Street Research Housing Affordability Index, published today, shows that - despite the recent house price falls - homes cost far too much for most families.

The index calculates how expensive house prices are, in comparison with families' disposable incomes.

The affordability barometer, in which 100 points represents the average expense of house prices since the early 1960s, hit 83.8 points in the final quarter of last year.

Now the withdrawal of credit compounds the fall. debt is more expensive and people have saved less. Therefore,  houses will stay unaffordable for longer and  the fall in prices may be greater for confidence to return. The high price of debt and the fall in house prices will mutually reinforce: a marriage made in hell for Labour.

Kosovo: the crucible

Kosovo remains a crucible of potential violence. Like Azerbaijan and Armenia, a frozen war will allow conflict to fester as part of the DNA of both polities for possibly decades to come.

Already, the Serbs are undertaking steps to allow their fellow speakers within Kosovo to vote for seats in Serbia's Parliament and to participate in the life of the nation. With no recognition for Kosovo, Serbs in their enclaves will look towards their homeland for protection.

Whilst the United Nations have criticised Serbia for these actions and have stated that only they can organise their farce, steps need to be taken to prevent war from being a long-term solution for either party. Slobodan Samardzic, the Minister for Kosovo in Serbia, is a nationalist hardliner who backs taking measures to undermine Kosovan independence, including these elections. Yet,

On Monday, Samardzic repeated his call for splitting Kosovo along ethnic lines — but according to population rather than territory, with Belgrade in control of various areas where Serbs live.

"The Serbs will continue to work with Serb institutions and the Serb government, and that is the functional division of Kosovo," he said. "There will not be any territorial division of Kosovo."

This commences possible negotiations over a useful compromise, although Serbia needs to accept the territorial and functional partition of Kosovo. Partition is the strongest step towards the protection of Albanian independence and the safeguards needed to respect Serb property and institutions. The alternative is state sponsored nationalism and ethnic cleansing, designed to maintain the interests of corrrupt political elites who have contributed nothing to their nations.

Zimwatch: Stealing the election

The Movement for Democratic Change has declared victory early, on the basis of one third of a sample primarily undertaken in their urban strongholds. This is too soon for confirmation, but satisfies Morgan Tsvangirai's demand for momentum. The Zimbabwean electoral commission has not yet declared any results, fostering the suspicion that they will rig the election and steal the result.

A similar situation was faced in Kenya, where elections were tolerated so long as they confirmed the kleptocracy in power. Real prospects for change in the ruling elite were met with violence and civil disturbance. The comments of ZANU-PF appear to state the same:

George Charamba, Mr Mugabe's spokesman, warned Morgan Tsvangirai, the MDC leader: "He announces results, declares himself and the MDC winner and then what? Declare himself president of Zimbabwe? It is called a coup d'état and we all know how coups are handled."

Before the election, Zimbabwe's police commissioner, Augustine Chihuri, and the head of the armed forces, General Constantine Chiwenga, said they would serve only Mr Mugabe.

Now, the troops and police that they command are being deployed in MDC strongholds. The Electoral Commission has stated that the electoral results will be announced this morning, thirty five hours after the election. Prospective onlookers expect that Mugabe will steal the election and Zimbabweans will realise that they cannot remove their rulers by peaceful means.

Then a right of resistance will be declared and they can do what they will to find a system of government that they consent to. This will have drawn the fnal veil of legitimacy from Mugabe's own mind and ensured that he is forever known as Zimbabwe's first tyrant; his phrases clearly lies:

After voting in Harare, Mr Mugabe, who is seeking a sixth term, said: "We don't rig elections. I cannot sleep with my conscience if I have rigged."

Paying Brown's bloodright

The Iraqi war may prove to be the end of the 'Special Relationship' under Brown's stewardship. His scuttle in Iraq, and the prospective deployment of US troops to sort out anarchy in  Basra, should concentrate his mind.  Peter Oborne identifies his  flaw:

However, the same cannot be said of our politicians. Last September, the Prime Minister made a snap visit to Basra during which he revealed the decision to withdraw British forces.

 

At the time, he was planning an autumn general election and the announcement - made in the middle of the Tory Party conference - looked very much as if it had been made for partisan political advantage rather than being based on a disinterested judgment about the military situation.

 

The assessment - cynically leaked in advance to friendly newspapers - was na've in the extreme. In hindsight, it can be seen that Gordon Brown's act of political opportunism broadcast loud and clear the message that Britain was no longer committed in southern Iraq - a decision that was a contributing factor to the anarchy that prevails there today.

 

As a result, Mr Brown is vulnerable to the charge that he treated a vital decision upon which many lives and our national honour depended as if it were a shoddy public relations stunt.

Now, diplomats and soldiers are unable to agree on the need for the British Army to move back in and quell the militias in Basra. Overstretched and underfinanced, the  inability to police Basra is due to the years of neglect and make do. The diplomats are stating that the soldiers will support the Iraqis and the army is confining its forces to "niche roles" in order to avoid a potential collapse of its capabilities.

The cost of this overstretch is coming home to roost:

Shamefully for Britain, the White House is now considering sending its own forces to sort the mess that the British have left behind. Last week, one White House official acidly remarked: "American blood is going to have to buy off the British failure in Basra."

Let us welcome US deployment in the south of Iraq so that Basra is dealt with properly. This will ensure that the lies of success told to us by Brown are blown away and renders their abrogation of the military covenant clear to all.

Brown, you treated the war, the army and Iraq with contempt. Now, this will be made clear to you at a cost in blood, US blood. All of the decisions that you never made, the moral actions that you ducked, have their price. Which you and all around you will now pay, as innocents have paid for the last years and will do so for years to come. Truth will out.   

Fit to burst

The BBC is quick to report the reactions to Geert Wilders film, Fitna. Their emphasis is upon the relief in certain communities in The Netherlands at the lack of reaction to the film. Since the film appears designed to address media omissions in the discussion of Islam: trite comments like this,

In a press statement issued, unusually in English as well as Dutch, just a few hours after the film appeared on the internet, the Dutch Prime Minister Jan Peter Balkenende criticised the showing of the film.

"The film equates Islam with violence, we reject this interpretation. The vast majority of Muslims reject extremism and violence and in fact the victims are often also Muslims.

"We therefore regret that Mr Wilders has released this film, we believe it serves no other purpose than to cause offence."

which are undermined by the withdrawal of Fitna due to death threats against Liveleak.

Following threats to our staff of a very serious nature, and some ill informed reports from certain corners of the British media that could directly lead to the harm of some of our staff, Liveleak.com has been left with no other choice but to remove Fitna from our servers. This is a sad day for freedom of speech on the net but we have to place the safety and well being of our staff above all else. We would like to thank the thousands of people, from all backgrounds and religions, who gave us their support. They realised LiveLeak.com is a vehicle for many opinions and not just for the support of one. Perhaps there is still hope that this situation may produce a discussion that could benefit and educate all of us as to how we can accept one anothers culture. We stood for what we believe in, the ability to be heard, but in the end the price was too high.

I am still awaiting the BBC report on this, though it does not appear on their website right now. Giving offence to Islam is wrong, but death threats from Muslims who feel that their sense of the sacred has been abrogated should not be reported. That may reinforce Wilders' arguments.

The current developments already have. The next requirement is to identify those elements of the British media that facilitated this. They should be 'named and shamed'.

Tosspots

You may have their gratitude, but we are gunning for you...

In particular, he thanked the Prime Minister for forcing the new EU treaty - which is based on the old defeated European Constitution - through the Commons without a referendum.

The French leader said Mr Brown had the gratitude of every other EU leader.

"I am not the only one in Europe who appreciates what he has done. What he has done was necessary for Europe," Mr Sarkozy said.

He added that he had told David Cameron, the Tory leader, earlier this week that he should have been supporting the Lisbon Treaty instead of demanding a referendum on it.

Here is why you are fucked! You don't trust us, the voters, and then you wonder why we are disllusioned with you bunch of shitbags; that includes you, Sarkozy, after this display of contempt for us.

Nimrod the shunted

Miracles occasionally happen. The House of Commons Select Defence Committee has called for the cancellation of the Nimrod programme, a snip at £4bn. The project has been subject to cost overruns and long delays. Seven years at this point.

Cost when approved: £2.8 billion
Cost estimate now: £3.5 billion
Original in-service date: April 2003
Current forecast in-service date: September 2010
Cost rose at the end of 2006-07 by £687 million
Cost rose in 2007-08 by another £100 million

This has been a characteristic of this government: maintain procurement projects as industrial subsidies rather than taking the necessary action to buy the most effective equipment at a reasonable prize. The consequence of these zombie contracts is that the contract for the aircraft carriers has still not been signed.

The committee also outlines other defence projects that are seriously behind schedule and increasing in cost, such as the Astute Class nuclear-powered submarines and the Type 45 destroyers. These projects plus the Nimrod MRA4s are nearly 14 years behind schedule in total, and cost overruns amount to £2.9 billion. Given the current defence budget of £33.4 billion, which will rise by 1.5 per cent a year over the next three years, MPs say that it might make more sense to scrap projects rather than delay them.

They criticise the MoD for failing to explain why the contract for two large aircraft carriers has not been signed, which they suspect is because officials want to postpone spending the necessary £3.9 billion. James Arbuth-not, the chairman of the committee, said: “For too long the MoD has had an unaffordable equipment programme and needs to confront the problem rather than giving the usual response of salami-slicing and moving programmes to the right.”

There is a need to overhaul all procurement at the Ministry of Defence. Political pork is now undermining the defence of the United Kingdom. As custodian of these matters, Labour has failed miserably here, like everywhere else.

Expenses update

The Speaker has come under criticism from the Liberal Democrats for undertaking this court action to prevent the publication of second home expenses. Outflanking the Tories attempts at transparency, the Liberal Democrats announced that all information should be published without the addresses. They were joined by one vocal Labour MP. 

This is hardly the Commons revolt as characterised by the Times. However, Alex Salmond has now been drawn into the fray for his expenditure. This was based upon a freedom of information request from Labour and the tactic my backfire: undertaking a popular attack on Scotland's First Minister looks petty when Labour is unwilling to disclose its own dirty linen.

Mr Salmond responded: “I published these expenses three weeks ago when a freedom of information request came in. I wrote to the Speaker and said that in my view we should publish MPs’ expenses quarterly, as the Scottish Parliament does.

“I employ staff. I do the work of a constituency MP and I think I will be about 500th in the expenses league table. I am one of the few MPs who does not take advantage of the mortgage option in London [by claiming mortgage interest]. I rented a flat, and gave notice when Gordon Brown bottled the election in October. That ran out in December and I moved out.

“I’ve been in Westminster every week for the last month but I just stay overnight in hotels because it is cheaper than renting a flat. This is a pitiful effort from Labour.”

Quite. Labour hypocrisy.

Retreat in haste, repent never

If the Iraqi forces feel secure enough to police Basra and attack the Sadrist militias there, why should Britain start to provide a beefed up security role. Fighting does not indicate that security has got worse; it indicates that the Iraqi forces feel confident enough, under political direction, to combat militias in an urban setting. Their campaign is Saulat al-Fursan - "Charge of the Knights".

The Sadrist forces have ambitions to become a private state within Iraq, similar to the role of the Hezbollah in Lebanon. Such a role would destabilise Iraq, increase Iran's influence and perhaps foster partition. This is not an outcome favoured by the United States or the Iraqi government.

Does this indicate that the British forces left Basra in a state of insecurity? The answer to this question is yes, although it is not clear what the deployed forces could have done to provide greater security, as they proved incapable of preventing the fall of Basra to radical militias. Therefore, the intervention from this quarter brings unwelcome attention to the Army's record:

The latest round of fighting prompted a call from one of America's most respected retired officers, General Jack Keane, for British forces to reconsider their withdrawal from the city.

The general, architect of America's "surge" policy in Iraq, has said Britain must do more to fight Iranian-backed gangs in Basra.

"The security situation is worsening," he told the BBC's Today programme.

"It is a myth to say that this is just a political problem. We must maintain security and stability in Basra and the surrounding provinces, which we do not have today."

Any inquiry on the Iraq war must look at the role of the armed forces during the so-called period of reconstruction and identify the failures of policing and the counter-insurgency policy. There was an indecent haste to hand over responsibility to Iraqi authorities, even when it was clear that they did not have the skill or the resource to match our capabilities. Militias filled the gap and corrupted the security services.

The Iraq war has displayed failures of intelligence and military deployment. These need to be assessed and plugged before the next war.

GLONASS and Galileo

Russia reports that the GLONASS system equivalent to the Global Positioning System will provide an operational system of thirty satellites for dual military and civilian use within the Russian Federation from 2010. This will extend the current eighteen satellites froma Russian to a global footprint.

The Russian Federation will have provided a rival to the United States by the end of the decade. Their commercial rival, Galileo, is not doing so well. The system has been nationalised after too few customers and contractors were willing to pay the costs. After the endeavour was nationalised, the preparatory work has cost €2.6bn and the launch phase is estimated to cost another €3.4bn.

Galileo has been a predictable example of European failure: cost overruns, lack of planning, commercial disasters and projected date that reduces vaunted commercial rival to longwinded also ran. the project will be complete in 2013, three years behind GLONASS and without the customers or partners that the supporters of its early dawn promised.