Another week of politics, another polifix; corrupt banking, a queeny handshake and Egypt’s new president. Yes, it is all very serious this week. Oh wait, and everyone thinks Obama can beat an alien invasion.
Bad Boys Barclays
There’s only one way to begin and its with Barclays who, last week, were fined £290 million for their role in a interest rate-fixing scandal. Now for most of us (maybe apart from economists, bankers and of course Robert Peston), banking mumbo jumbo goes way over our heads.
So let’s try to synopsise. Libor, the London Inter-Bank Offered Rate, is a formal way to measure the cost of inter-bank lending – which occurs to cover short-term balance sheet holes – thus sets out an average rate that banks use to borrow and lend from one another.
Barclays rigged this amount, feeding false information, at certain times, into the system that works out the Libor rate which: 1)allowed the bank to protect its reputation by appearing in a stronger position than they really were; 2) help traders’ predictions come true, turning profits by speculating on rates. Investigations also showed that Barclays staff worked with other banks to make money for themselves, with rumours that Barclays are just the tip of an gigantic iceberg with Royal Bank of Scotland, HSBC and Lloyds also under inquiry.
Any better? No? Well, basically, its all very corrupt and unethical. The £290 million fine is laughable – especially considering the UK’s FSA comeuppance was only £59.5 million – with Barclays able to make more than that in an hours trading. The rate ragging directly affected over £2 trillion pounds of financial products, with estimates that around 250,000 mortgages are linked to the rate, possibly adding hundreds of pounds to repayments.
The fact that criminal prosecution is impossible is considered ridiculous by most with nearly 80% of the public baying for a banker in handcuffs. It’s hard to argue; rioters got 10 months prison sentences for stealing trainers and gloves, but bankers can commit fraud by manipulating the whole financial system without punishment.
Was anyone really surprised about this story though? Just another rotten apple in those running the system. This, coupled with the mis-selling of PPI, has brought confidence in banking to a new low in a time when it needs to be high.
However, maybe it was just a genuine mistake. A memo leaked from Barclays explains their trader’s behaviour, claiming that none of them can read or write and they thought it was spelled Liebor. And then took it a bit too literally.
Two People Shake Hands
Big News this week as the Queen shock a “commoner’s” hand. Hundreds tuned in to see the big event with some believing that her Majesty’s hand might dissolve when touching a mere mortal’s.
Oh, she was wearing a glove anyway. Does the Queen ever not wear gloves? (Editor note; get back to the real story)
So a historic handshake this week, with the Queen shaking hands with Martin McGuinness, deputy first minister of Ireland. McGuinness is a former IRA commander whose main goal was to remove Northern Ireland from the UK in order to bring about a united Ireland, using violence as a means to bring this about. The organisation infamously killed the Queen’s cousin, Lord Louis Mountbatten, in 1979 as well as targeting other royal family members, including the Queen during their period of activity.
The handshake is a symbol of how far the Northern Ireland Peace Process has come – a monarch that epitomises the British establishment shaking hands with a republican ex-leader of a paramilitary group – with McGuinness, now a Sinn Fein politician, claiming it could define a new relationship between Britain and Ireland. McGuinness even said he was reaching out the hand to all unionists; those who prefer a political union between Great Britain and Ireland.
Of course, some people were less happy with the handshake, with many die-hard republicans believing that it is a sell-out and that they “shouldn’t waste their breath on the Queen”. Sinn Fein, however, feels it shows that they can do diplomacy and believe it could increase the party’s vote. At the same time, unionists saw the incident as another Sinn Fein backdown, alongside the Jubilee tour as a true portryal of their Britishness. So well, a victory for all? Such hullabaloo over a handshake.
Lots Morsi To Do
Well, they left it like a cliffhanger, but at last it is official; Egypt have a new President. The announcement, delayed by three days due to allegations of ballot-rigging, confirmed that Mohamed Morsi, the Muslim Brotherhood candidate, had won the election with 52% of the vote, becoming Egypt’s first democratically-elected president.
Despite (fairly unfounded) fears from that the Brotherhood will seek to create an Islamic state – seen as a threat to woman, non-muslims and the situation in the Middle East – Morsi immediately resigned from the party in order to be “president to all Egyptians”. Indeed, fears from the west that the ongoing discrimination against women, religious minorities and homosexuals will continue seem to have collective amnesia on their own history. After all, “the land of free” existed as a slave state for its first 89 years; revolution is slow, not instant.
Let’s also not forget that Ahmed Shafiq, the opposition candidate, is a former military man and Hosni Mubarak’s last prime minister, so Egypt has voted for democracy, rather than military. Of course, the US preferred the military option which is could bend to its needs with Egypt being the largest recipient of US aid – after Israel – since 1979.
Indeed, the real challenge will be to wrestle control back from the military, who have ruled Egypt over the last sixty years. The Supreme Council of the Armed Forces (SCAF), the interim military leaders, made a power grab during the election; dissolving the elected parliament, granting themselves legislative control to write the constitution and removing civilian oversight of the military. The Egyptians now needs to spring towards a real revolution. (To check out how well Morsi is doing in power, check out the Morsimeter)
An EU Referendum. Sometime. Maybe.
In what was the biggest non-news story of the week, David Cameron said he is “prepared to consider an EU referendum”. Writing in The Sunday Telegraph, he stated that he felt European Union membership must have the support of the British people, but that such a course of action would not be in the immediate future. He also stated that it would not simply be a yes-no question, but was unsure what format it would take.
So no date. No question. Useful. It basically was the political equivalent of a weather forecast that says “there will be some sun eventually but we are unsure when”.
Most feel that Cameron is pandering to the right-wing of the party (the people who actually want to be UKIPers, but then snobbishly feel they aren’t really a real party). Over 100 Conservative MPs, many eurosceptic backbenchers, have called for a poll over the UK’s EU membership though it is unclear what leaving the organisation would really achieve. After all, the UK is in Europe and makes most of its trade with the continent, so why would isolationism be better?
(Above Picture: ©Alphadesigner)…Oh, another memo; the Conservatives want to become the 51st state of the US.
And Lastly, Who Needs Will Smith (When You’ve Got Barack)?
In our first ever polifix, we shown that one in every ten Brits (or at the very least Daily Star readers) thought that David Cameron was an alien. Well, over on the other side of the pond, they’ve had their own poll concerning extra-terrestrial life.
The poll, taken by the National Geographic Channel, showed that 80 million US citizens think aliens exist. Moreover, most of them wouldn’t mind aliens invading due to the belief that they would come in peace and friendless. (Have they not watched Independence Day?)
The good news is that two-thirds of Americans feel Obama would be better at handling aliens than presidential candidate Mitt Romney. So aliens? If you plan on invading, please do it in the next 4/5 years. After all, the last Republican president would have probably locked you up in a detention camp in Cuba before you even said hello (or the alien equivalent).
The best bit of the story, however, is that the poll came in the wake of a new programme named ‘Chasing UFOs’ which followed three men who consider themselves ‘UFO Hunters’. How that job can exist at all – but moreover in this economic climate – is staggering.
In Other News…
Paul Chambers, the man sentenced due to a tweet about blowing up Robin Hood Airport, was in court to appeal his conviction in the #twitterjoketrial.
Another unhappy week for the Eurozone, as the crisis continues with Spain formally asking for a bailout, with figures showing that their short-term debt has tripled. Cyprus have also joined in the money binge, with their banks left extremely exposed due to Greece’s failing economy. Oh dear.
The Patient Protection and Affordable Health Care Act has at long last been approved by the supreme court, giving Obama a key victory in the run to the Presidential election and “for people all over the US”. That’s right; ObamaCares.
And Rupert Murdoch is set to divide News Corporation into two parts, separating the company’s newspaper business from its entertainment arm of its movie studio and television networks in order to save in order to stop the phone-hacking scandal damaging the rest of the media empire. It might be a bit too late to save his reputation though.
Tune in next Sunday for your weekly political news fix…I promise it won’t be as long or as serious. (That is a David Cameron Referendum promise though).