The life expectancy gap between rich and poor people in England is widening, despite years of government and NHS action, a hard-hitting National Audit Office report reveals today.

Extensive efforts have failed to reduce the wide differential, which can still be 10 years or more depending on socio-economic background, says the public spending watchdog. While life expectancy has risen generally, it is increasing at a slower rate for England’s poorest citizens.

In Blackpool, for example, men live for an average of 73.6 years, which is 10.7 fewer than men in Kensington and Chelsea in central London, who reach 84.3 years. Similarly, women in the Lancashire town typically die at 78.8 years – 10.1 years earlier than those in the London borough, who reach an average 89.9.

The gap in life expectancy between government-designated areas of high deprivation and the national average has continued to widen, so Labour’s aim of reducing it by 10% will not be met, the NAO concludes. The failure to meet the target has cost an estimated 3,300 lives.

The report criticises the Department of Health and the NHS for making too little progress to tackle this key barometer of inequality. Although the DoH set a target in 2000 to reduce health inequalities and published a strategy in 2003, real NHS action did not begin until 2006, it says.

“The Department of Health has made a concerted effort to tackle a very difficult and long-standing problem,” said Amyas Morse, head of the NAO.

“However, it was slow to take action and health inequalities were not a top priority for the NHS until 2006.”

The service was also slow to apply three key policies, including giving more poor people drugs to reduce their blood pressure or cholesterol level. “These have yet to be adopted on the scale required to close the inequalities gap,” the NAO said.

The report also highlights a continuing lack of GPs in poor areas with high health need, despite shortages having been identified as a problem in 2000. It is also unclear whether an extra £230 a head spent in some areas to improve health outcomes has had any real impact.

Professor Alan Maryon-Davis, president of the UK Faculty of Public Health, said the disparities showed the inequality of English society. “If we see ourselves as a civilised society, these gaps are an indication of unfairness, which shouldn’t be there, and is an unfairness which costs lives, damages people’s health and will eventually be a huge burden on the NHS if they aren’t tackled,” he said.

But the NAO report did contain good news about improvements in the health of England’s poorest citizens, he added. “The health of the people in the poorest areas is going in the right direction – that’s good news. We shouldn’t regard that as a failure. But the bulk of the population are improving their health at a faster rate.” He urged ministers to resist any temptation to cut spending on health inequalities in the tough financial climate.

Anne Milton, the public health minister, emphasised the government’s belief in health equality. “Everyone should have the same opportunities to lead a healthy life no matter where they live. We want the public’s health to be at the very heart of all we do, not just in the NHS but across government,” she said.

“This report shows that efforts have been made to address health inequalities but that more needs to be done to tackle the deep-rooted social problems that cause ill-health. I want to see the NHS, doctors and local government acting at the right time to improve the health of those who need it most.”

The NHS Confederation, which represents most health service organisations, admitted that more progress was needed. Jo Webber, its deputy policy director, said: “The NHS and its partners, especially in local government, have a responsibility to help stop people falling into and continuing in ill-health rather than picking up the pieces when it may be too late. Encouraging improved health requires a focus on all aspects of society, including economic inequality, and quality of life in early years.”

Tammy Boyce, of the King’s Fund health thinktank, said the NHS could only achieve so much. “Tackling health inequalities is not a task for the NHS alone. It requires a co-ordinated, long-term commitment across government to address the wider causes of ill health such as poverty and poor housing,” she said.

“The first test of whether the coalition government is likely to succeed where the previous government failed will come in this autumn’s spending review. It is vital that cross-cutting issues like health inequalities are not overlooked in the scramble to deliver spending cuts on a department-by-department basis.”

Michelle Mitchell, charity director at Age UK, said the big gap in life expectancy had to be tackled in the light of the government’s intention to increase the age at which people can draw the state pension. “With a 13-year disparity in life expectancy between different areas of the country, it’s shocking that primary care trusts are still failing to use simple and effective treatments to help tackle the problem.

“This report follows the government’s announcement last week to raise the state pension age further and faster, which will hit those with a shorter life expectancy in the poorest areas of Britain hardest,” she said. “In this context, tackling health inequalities is more urgent than ever and the government must set ambitious targets to close the yawning life expectancy divide.”

Also see – Taxed To Death our film special on this issue

Source: http://www.guardian.co.uk/society/2010/jul/02/poor-in-uk-dying-10-years-earlier-than-rich

]]> http://renegadeeconomist.com/blog/telegraphpoor-uk-dying-10-years-earlier-rich-years-government-action.html/feed 0 http://renegadeeconomist.com/headline/independent-forget-mortgage-debt-happy-renter.html http://renegadeeconomist.com/headline/independent-forget-mortgage-debt-happy-renter.html#comments Sun, 27 Jun 2010 09:54:22 +0000 admin http://renegadeeconomist.com/?p=934 First-time buyers are suffering, and mortgage rule changes could lead to yet more misery, so perhaps it’s time to consider the benefits of being a tenant, writes Laura Howard

George Osborne’s recent pledge to dismantle the Financial Services Authority and hand greater powers to the Bank of England could be the final nail in the coffin for the nation’s first-time buyers.

Under the Chancellor’s new arrangement, the Bank would have the authority to place a cap on the amount that mortgage lenders could hand out to borrowers – and some fear this could mean maximum loans of 75 or 85 per cent of the property price.

Ray Boulger, the senior technical manager at broker John Charcol, insists that the move would particularly hurt first-time buyers, by denying them a mortgage that they could afford or driving them to finance part of it with an unsecured loan or a credit card. “And this is a group that the Government claims it wants to help,” he says.

Things are sticky for first-timers already. Since the banking crisis hit in 2007, those yet to get on the property ladder will need to raise at least a 10 per cent deposit – a sum that, in spite of the recent housing crash, is often unobtainable. For example, the average house price is now £169,162 according to Nationwide, following a 0.5 per cent monthly rise.

Even if average first-timers can muster up the required £17,000 and qualify for a mortgage on the remainder, they will pay through the nose in interest. According to Moneysupermarket.com, the average interest rate on a 90 per cent mortgage is currently 5.83 per cent, compared with 4.2 per cent for a loan of 75 per cent of the purchase price.

“This translates into an extra £144 each month for someone buying a £150,000 home, which is already a major impact on first-time buyers’ monthly budgets,” says Hannah-Mercedes Skenfield of Moneysupermarket.com. But she adds that a 75 per cent loan-to-value cap on mortgages would make things worse still. “We have grave concerns about this possibility – it seems like a new government is trying to fix a complex problem with a blunt instrument.”

High property prices combined with increasingly obsolete mortgages will result in a generation of the “haves and the have nots” when it comes to property, says Helen Adams, director of FirstRungNow.co.uk. “Generally speaking, only those with wealthy, generous parents, or very well-paid jobs, will be able to step on to the property ladder. Those who can’t get a mortgage and don’t inherit a property may well be committed to a lifetime of renting.”

Evidence of this is already under way. Figures from the Association of Residential Lettings Agents (Arla), the industry body, reveal that there were 3.8 million privately rented homes last year, compared with 2.4 million in 2001.

A recent report published by the National Landlords Association (NLA) has also revealed that as many as one-in-five households could be renting from a private landlord in the next 10 years. NLA spokesman Alan Ward said: “At a time when government funding is strapped, it is private investment that will enable essential housing needs to be met. Rather than being seen as a last resort, private tenancies are becoming the choice of many people who need the freedom to choose homes where they need and for as long as they need.”

There are several clear benefits to long-term renting, according to Peter Bolton King, the chief executive of the National Federation of Property Professionals. “Unlike house prices, rents have risen almost exactly in line with the average wage since 1994 – which makes renting more affordable in spite of low mortgage rates. Tenants will also escape the cost of repairs and maintenance to their homes, as this will fall to the landlords, and have total flexibility to move.”

If you are looking to stay put for the long-term, Assured Shorthold Tenancy Agreements (ASTs) – the contracts used in the private rented sector – can state any duration of tenancy agreed by both landlord and tenant. But an AST lasting several years should incorporate break clauses which will allow either party to exit or continue the arrangement, says Mr Bolton King.

Tenants should also be prepared for landlords to use break clauses to hike the rent up – especially when the contract spans several years, he adds. However, such raises should typically be in line with the Retail Price Index (RPI) measure of inflation.

Economies of scale will apply though, which means you can use the longer-term tenancy as a negotiating tool to barter down your starting rent. “Especially for landlords with larger portfolios of property, long-term tenancies are attractive,” says Mr Bolton King. “It’s expensive and time consuming to keep switching tenants.”

Since 2007, deposits – which typically amount to between four and six weeks’ rent – will be held by the lettings agent and protected by the Government’s Tenancy Deposit Scheme. According to figures from the TDS, the average deposit amounts to £1,000, but don’t expect to earn any interest on it – even if it’s being held for 10 years, says TDS spokesman Malcolm Harrison. “The lettings agent will probably argue that the interest barely covers the administration costs of holding the deposit in a ring-fenced account. Or if they do pay interest, they might charge an administration fee.”

A thorough inventory – that states what furniture and appliances are in the property, and in what condition, when your tenancy begins – becomes especially important with long-term renting. “With the best will in the world,” says Mr Harrison, “who is going to remember what was and wasn’t there five years later?”

Staying in any home for several years will mean it needs to be redecorated and, as a tenant, you will be entitled to do this. However, the AST is likely to state that the property will need to be restored back to its original condition before you move out.

All tenants, regardless of the length of contract, will need to undergo a credit and reference check to ensure they are a reliable payer. Costs vary but, at a typical £50, this is one charge that will fall at the tenants’ doorstep.

Bricks & torture: ‘A mortgage would have cost £1,300 a month – renting is just £750′

Lucy Kemp, 29, and her partner, Dan Nash, 27, pulled back from the brink of buying their first home in Birmingham last month in favour of continuing to rent.

“We put an offer in at £210,000 against the £230,000 asking price and began looking for mortgages,” said Lucy, a marketing account manager. “But only having access to a 10 per cent deposit, the cheapest deal we were offered was a three-year fix priced at 6.5 per cent. With bills, this would work out at more than £1,300 a month.”

Instead, Lucy and Dan found a larger, more central two-bed apartment with en suite and terrace, available for rent at £750 a month. “The money we are not spending means we can continue having fun and that we have retained total flexibility to move to a house with a garden when the time is right.”

Lucy was also worried about tying her money up in a dubious property market.

“If you buy an apartment, you can’t extend it to increase the value – you have to rely on the market to increase or even hold its value – and I don’t trust that at all.”

Lucy and Dan are not worried that they have never been homeowners. “My mother only bought one house in her life but things are different now. We move around more so long-term renting suits us.

“Some people say renting is throwing money down the drain, but you have to pay to live, and it offers a whole host of other benefits.”

Source: http://www.independent.co.uk/money/mortgages/forget-about-mortgage-debt-ndash-become-a-happy-renter-instead-2011347.html

Warren Buffett and Bill Gates are acting as if they’ve discovered the fountain of youth as they are now telling other billionaires they don’t need to spend their lives addictively pursuing and hoarding wealth.  On the surface this is noble, even though most people learned such things from their pet as a kid.  They’re inspiring other billionaires to follow their lead.  So we’re supposed to cheer right?  Many people are cheering.  The comments range from “thank you!” and “bless you Warren!” to the more worshipful “you are a hero!” and “this proves Microsoft’s commitment to humanity!”

Wow—the power of corporate PR.  It’s unfortunate that snake oil has always been a bestseller.  So rather than cheer, I’ll give a different perspective on what this billionaire PR campaign might be all about.

The real reason Gates and Buffett are doing this in the media now is because they’re still doing what they’ve done their whole adult lives—serving their bosses, the moneyed establishment behind Wall Street.  While the exponential growth machine was inflating, the establishment wanted them addictively pursuing EPS and share growth, and they dutifully did so better than most.  But now that the machine is shutting down, the fact is that billionaires won’t be able to pursue wealth—the game is over for a while.  And now that we’re headed for a major dose of deflation that will cause a lot of pain for a lot of people, the establishment wants Gates and Buffett on TV talking about charity.  Why?

Among other things, it’s a preemptive strike against the rage of the lower classes that will result from the final reckoning with our broken monetary system and the fact that the corporate system has shifted American jobs and production offshore.  This is an orchestrated billionaire PR campaign, kicked off at a dinner with David Rockefeller himself, “lord” of the US banking establishment.  Gates and Buffett are providing strategic marketing through CFR (Council on Foreign Relations) mouthpiece Charlie Rose and other major media arms of the establishment, then companies and smaller billionaires are following their lead and giving away money in return for more PR effect.  Two examples:

Corporate charity:  JP Morgan Chase got a lot of bang for its buck on June 9th announcing a $5 million charity program for education.  CEO, billionaire, and inner CFR member Jamie Dimon said, “As a company, we’re highly committed to serving our local communities…We’ve now seen that when corporations listen to the communities they serve, they can learn a great deal and, in turn, help worthy causes achieve goals that would have never been possible.”

Billionaire charity:  Marc Benioff, CEO of salesforce.com, billionaire, and CFR member just gave away $100 million to a hospital in San Francisco.  The PR master has stirred many on Facebook to lawd him with near religious fervor and thank him for caring so much for his community.  It’s the corporate suit equivalent of a rock concert.

Again beyond the PR, this is part of an organized campaign being run by the corporate ruling class.  While the most powerful folks at JPM Chase know the truth, the non-profit team inside the bank and an individual like Marc genuinely believe in what they are doing.  They’re decent people.  They just don’t realize how their compartmentalization within the mega corporate structure keeps them from seeing the truth of the debt-based corporate empire they’re serving.  So what’s the truth?

Will the Real JP Morgan Chase Please Stand Up?

Let’s start with JP Morgan Chase.  It is a voracious institution driven by ruthless usury putting people, towns, counties, states, and countries in debt.  It has fed the multi-generational billionaire families that have controlled the bank through history (the merger of JP Morgan interests and Rockefeller interests behind Chase) while making a few of its operating officers like Jamie Dimon billionaires as well.  It has done so by being the most powerful member of the Federal Reserve cartel that puts the US government in servitude and forces all of us to borrow and pay interest in order to have money, i.e. in order to survive.  So the bank effectively controls the rest of us in an economic structure similar to the old days of feudalism.

Some specific examples are useful to help understand the true character of this institution.  The bank, sometimes through foreign surrogates, has a track record of being involved in the financial crises that put foreign governments under even more debt from the Anglo-American banking establishment and give western corporations more power and control over natural resources and other assets.  The bank helps drive smaller levels of government into insolvency, with Jefferson County Alabama being the most obvious current example.  The bank has been accused of insider market manipulation, most recently in the silver market.  The bank has participated in the general banking attack on much of the world having blown indebtedness, and therefore asset bubbles, to such stratospheric heights that major “discontinuous adjustment” is guaranteed, to use an innocuous Greenspan phrase for “unprecedented catastrophe.”  And the bank showed how ruthless its operating officers can be in the aftermath of the collapse of 2008 when they had no problem jacking up credit card rates and kicking people out of their homes as Jamie Dimon went on CNBC to tell Americans they better pay up so his team can keep pocketing millions.  At the same time, the powers behind the bank were extorting the government to put the nation in even more debt, transfer billions to them, and hand them valuable assets like WAMU.

This should reveal the truth behind Jamie Dimon’s claim that Chase “serves its communities.”  That is PR spin straight out of Orwell’s 1984 where corporate propaganda from a smooth Harvard billionaire replaces truth.  I also hope this helps put in perspective a $5 million charity handout designed to give them PR value.  $5 million isn’t even pocket change to Chase.  It’s a tiny drop in the ocean of money that has been stripped from the population in the first place through usury.  So a helpful analogy to this Chase charity stunt might be a viciously abusive husband who gives his wife a Reese’s peanut butter cup after 10 years of broken bones, hospital visits, and psychological horror.  Don’t be a sucker.

Marc Benioff and the Truth of the Tech Boom

In Marc’s case, the story is far less severe.  He’s not in the dark usury business.  He’s not evil.  But the gap between truth and PR is still wide.  He became a billionaire in the 2nd phase of the tech boom in which the establishment chose Web 2.0 technologies for its corporate empire vs. the old client/server architecture from the 1st tech boom.  At the micro level, people inside his company think they’re benevolently serving human progress.  But the macro perspective reveals that salesforce.com is just one small component of the overall new world economic order being built by the financial empire that rules much of the world.  His product helps the corporate system go global and turn away from national and community loyalties.  So salesforce.com’s gain is, for example, the industrial midwest’s ruin—so much for the idea that he loves community.  As a few comfy employees in the company have gotten rich IN the tech bubble, manufacturing towns have been destroyed BY the tech bubble.  His product also puts data in the “cloud computing” architecture on the internet beyond corporate firewalls and national borders so the banking establishment can further consolidate power and control.  This explains why a CFR lawyer was a top officer at the company for a few years and why a public CFR representative like Colin Powell would speak at a Benioff conference for techies, not typically a venue where one sees national leaders who have more important things to do.

What’s really sad about the tech billionaires is that their wealth was driven by putting the rest of the world in massive debt.  They don’t understand this.  They think they really are “self-made” billionaires as described by establishment rags like Forbes.  But as Teddy Roosevelt said, business elites don’t know much outside their own business, so they don’t realize the true mechanism that funneled so much wealth into the tech industry and their personal bank accounts.  As a result of Greenspan and team driving the real estate debt boom and the US government massively increasing its debt at the same time, the Wall Street cartel had new unprecedented levels of liquidity to funnel into the corporate empire system.  This gave corporations billions to allocate to new capital projects, and since Wall Street governs the corporate system, it dictated how that money would be spent.  So guys like Marc saw their share prices shoot to the stratosphere as corporations funneled to them billions in funny money backed by the debt that would soon drown millions of people.

Truth vs. Corporate PR

This is the truth of the corporate system, our supposed captains of industry, and the tech billionaires we admire for entrepreneurial efforts.  This is the truth that more and more Americans are waking up to.  And this is therefore likely the reason the CFR corporate establishment is encouraging guys like Marc to dole out money in a coordinated campaign designed to make people admire billionaires and the corporate system that rules them.  If they can buyoff enough of the population with charity PR, they might avoid the reckoning that would otherwise be coming their way.  They will be able to stay peacefully in their billionaire enclaves separate from real communities as the rest of the population suffers in the next phase of deflationary decline coming our way.

So Warren, Bill, Jamie, Marc, am I glad some of the money that was sucked into your accounts by the debt system is being given back to the community?  Absolutely.  But will you go further?  Will you learn the truths this article discusses?  Will you actually get out in your communities, meet real people, learn about how their indebtedness is directly proportional to your wealth, and work with them to change the system rather than writing a check, hiding behind PR professionals, and serving the CFR agenda?

The people are awake to the truth now.  The system is reverting back to reality.  The PR matrix is coming down.  You should move beyond the fake PR facades as well.  Warren, you said the dinner with Lord Rockefeller was almost like a therapy session.  I promise you’ll feel even better if you simply choose truth over PR. As opposed to the narcissists that Rothkopf calls the “superclass” which surrounds you, most people are forgiving by nature. You don’t have to hide behind PR any longer.

By Damon Vrabel http://canadafreepress.com/index.php/article/24501

The euro is under threat – along with our entire free-market system, warns Edmund Conway in today’s Telegraph.

Between the SEC charges and the congressional panels, the government is finally doing its job going after Goldman Sachs, right?  And this last week in April ends with the Justice Department picking up the baton, which puts Goldman under threat of criminal prosecution.  Things have suddenly gotten serious.

Two weeks ago on a radio interview, I suggested the SEC investigation will either be a chump charge to pacify the masses or it might potentially be the beginning of the sacrifice of Goldman Sachs for reasons explained below.  The Justice Department referral makes the latter more probable.

Criminal prosecution is indeed appropriate.  Goldman deserves to be broken up.  In fact, all banks of that size need to be broken up so that power is passed down to state and local economies, and countries are no longer held hostage by the mega firms.  Is that what is happening here?  Are we being saved from the financial parasites that have destroyed our economy?

Childlike Perspective:  Left vs. Right

The left thinks so.  The major media establishment is suddenly, as if by script, trumpeting the idea that government is cracking down on boogie man Goldman Sachs.  This view says, “Yey! Our good government servants that have our best interests at heart are fixing those greedy Wall Street parasites.”  That’s the entire purpose of the congressional panels—a stageshow for the Wall-Street-funded media to promote this narrative. But those very same government officials were the ones who did what Goldman Sachs representatives and the real powers behind Wall Street told them for the last 20+ years.  They still get all of their money from Wall Street.  Have they suddenly turned on the very people who feed them?  Of course not.

The right thinks this crackdown is bad because Wall Street and Goldman represent a benevolent free market.  This view goes beyond childlikeness and approaches insanity, like Goldman CEO Lloyd Blankfein thinking of himself as an angel from God.  Wall Street, the Fed cartel, is a government creation.  There is nothing “free market” about it.  It is the most powerful monopolized cartel in the history of the world.  Conservative media mouthpieces who trumpet Wall Street do not have a clue about our monetary system.  They have never looked beyond the false religion of neoclassical economics, which conveniently ignores the issue of money.

Conclusion: rule out the simplistic view of the left and right.  The Washington DC government has served Wall Street and big business for decades.  There is no divide between big government and big business.  They go hand in hand.  Neither could exist without the other.

Adolescent Perspective:  “They’re All Criminals”

Another group of people, far more accurate than the left vs. right disciples, think that Wall Street is just a predatory bunch.  Bringing down Goldman Sachs would therefore be a good thing in their view.  But they think DC government is a predatory bunch as well.  They see through the salesmanship and PR pumped through the corporate media.  They understand that frat boy behavior creates a self-serving clique whether on Wall Street or in Washington DC.  In fact, they understand how the boys in both groups get their power from working together.  It is all one club.

Conclusion: as correct as this view is, it leaves us paralyzed.  Adolescents are brilliant at seeing through adult facades, but they may fail to see the higher level picture.

The Godfather:  Who the Criminals Work For

The key to what is really happening is to understand that the suits we see on television are not in charge.  A bunch of random self-serving people would not be able to pull off strategic, coordinated plans—the adolescent view is only half correct.  There are people far above the pay grade of a senator like Chris Dodd or a wage servant like Lloyd Blankfein.  He may be the top operating officer at Goldman, but by definition that means he is a servant of the ownership class—the Anglo mafia—that controls all money in the system.  The fact that he earns a wage and gets a W2 at the end of the year means he and his firm are not in charge.

Goldman Sachs is effectively a capo regime.  It is a powerful player in a game of controlled chaos.  It was given a territory and was then expected to deliver the goods.  And Goldman delivered better than all the other capos in the system.  It reaped the rewards.  Goldman’s officers were paid better than any other regime throughout the last several decades.  Its hit men were the most productive. The most loyal—Rubin, Paulson, etc—have been inducted into the upper level circle around the Godfather and removed from the stressful street jobs that bring public scrutiny.  Those guys made their hundreds of millions and no longer care whether Goldman exists or not.  And from the Godfather’s perspective, there comes a time when capos have served their purpose.  At that point, their life is in danger.

“The Game of the Century:”  Bobby Fischer and the Queen Sacrifice

But capos typically are not sacrificed unless doing so would serve a Machiavellian purpose.  So what would be the purpose of sacrificing Goldman?  Well, in one of the more famous games in chess history, 13-year-old Bobby Fischer brilliantly pounced on his opponent and guaranteed victory by boldly sacrificing his queen on move 17.  The queen is the most powerful chess piece.  Average people would narrowly play a game defensively protecting their queen and assuming any chance to take your queen would lead to victory.  But that elementary view would be precisely the weakness upon which a true chess mind, a Godfather, would prey.  Beware of the bait being laid in front of you.

Goldman Sachs is very much analogous to a queen in the chess game being played by the ownership class—the richest pools of private capital controlled by multi-generational wealthy families that hover above countries via the central banking system.  It has been one of the most potent pieces on the board for many years, its most recent attack being on the entire nation of Greece.  But as the endgame comes into view, perhaps the most brilliant play to reach checkmate is now the queen sacrifice.  Goldman employees had better be sending their resumes to JP Morgan Chase—a critical chess piece in the endgame that will be protected at all costs.

The Great Global Restructuring

What is the end game?  The ownership class is attempting to restructure the world under a new financial system.  We have had a global currency for a long time—the US dollar—but it has run its course.  Wall Street has leveraged up the dollar as far as possible.  The dollar now holds most nations hostage thanks to the power of the bond market, the central banking system.  The ownership class needs a new debt-based currency and banking structure to maintain control as they pump the capital engine through the 21st century.  This is why the G20 is working feverishly to build up the IMF, BIS, and new global financial rules.  This time the production center will be China rather than the US, which is why China and Japan are the most asset-rich countries in the world while the western world is the most indebted.  The west is on track for decades of slow decline while Asia is on the verge of seeing “the rising sun.”

So unfortunately the government vs. Goldman Sachs story has nothing to do with reforming Wall Street in the interest of average Americans. Rather, it is a strategic move to further the endgame of consolidating Wall Street power, focusing public rage on Goldman to protect JP Morgan Chase, fueling new regulations to clamp down on the smaller banks that we so desperately need, and creating a global structure even bigger than the already “too big to fail” banking system.  This may be setting up one of the biggest, most successful queen sacrifices in history.  We should take the queen by all means—Goldman is a predator.  But heed the lesson from 13-year-old Bobby Fischer.  Be wary of checkmate.

Source Link:  Canada Free Press

By Damon Vrabel  Saturday, May 1, 2010

Source: http://www.guardian.co.uk/money/2010/apr/12/buy-to-let-first-time-buyers

British property prices benefited from a 25-year bull market since the 1980s, pushed up by low inflation and real interest rates, and the influx of millions of younger less well-off buyers who were suddenly able to get hold of mortgages, according to Lombard Street Research. But the organisation has given warning that homeowners must prepare for what could be a similarly long period in which economic forces work in the opposite direction.

The warning, from LSR’s senior economist, Jamie Dannhauser, will cause particular concern, since it comes amid hopes that having slumped by around a fifth since the peak of the bubble, the housing market has now recovered.

However, Mr Dannhauser said that although house prices may continue to rise for some months, buoyed by short-term factors such as low interest rates and thin trading, the impact of the credit crunch may mean that the long-term direction of the market could take a turn for the worse.

He said that although the past 25 years had been punctuated by two housing crashes, the long-term trend for house prices had been overwhelmingly positive.

“There was a big 25-year adjustment that came through three factors, which are one off shocks – inflation, real interest rates and credit availability,” he said. “The real story now is credit, and more specifically what is happening in the mortgage market. For people who are bullish on housing as a medium term investment, that is a big question. It seems highly likely that given this banking shock there’s been a step change in availability of credit.

“My medium term view now is that real house prices over the next three to five years will be flat at best. But it’s quite conceivable that the equilibrium level of real house prices of 06/07 will not be reached again.”

This implies that although nominal house prices may once again shoot through the levels they hit at the peak, the price when adjusted for inflation and the cycle may never again attain such a level.

The warning came as LSR said that its housing affordability indicator, in conjunction with The Daily Telegraph, showed that house prices became marginally more expensive in the final quarter of 2009. The indicator, in which 100 points represents the average affordability level since the early 1960s and a higher figure means prices are undervalued, dropped from 118.6 points to 118.4 points, meaning homes became slightly more overpriced. The indicator compares house prices to families’ incomes and mortgage payments, and was one of the most reliable yardsticks in the run-up to the recent slump.

Affordability started to deteriorate for the first time in the third quarter of 2009, as house prices began to pick up enough to compensate for the fall in mortgage rates. Although prices rose by more than most economists expected last year, Mr Dannhauser warned that this was partly a function of the fact that so few people were putting their homes on the market.

“One reason prices have bounced back is because the volumes have been so thin. The effective level of housing demand is still way down on previous levels – particularly at the first-time buyer level.”

In the Budget last month the Government pledged to exclude first-time buyers from stamp duty up to a level of £250,000, in a move which is intended to draw more buyers into the market.

Article: http://www.telegraph.co.uk/finance/economics/houseprices/7557222/UK-house-prices-face-prolonged-bear-market.html

But hundreds of pages of documents which are thought to detail the Bank’s concerns and advice to the Chancellor have been withheld by the Treasury.

The Bank of England has been responsible for managing Britain’s reserves for centuries but it appears to have effectively been overruled by Mr Brown, when he was Chancellor.

The decision to sell the gold is one of the worst to have ever been taken by the Treasury and has cost the country about £7 billion as the price of bullion has since risen sharply.

The loss to the Exchequer is now twice as high as the Conservatives’ decisions over the Exchange Rate Mechanism on black Wednesday.

Last night, the Prime Minister was accused of a “cover-up” after the Treasury declassified only limited information on the sale and refused to release most of the key documents. Some pages were heavily censored to remove crucial information.

Last week, Mr Brown told the House of Commons that he was “happy” for all the documents surrounding the controversial sale to be released. However, the Treasury said last night that they would not be releasing any further information.

Lord Oakeshott, the Liberal Democrat’s Treasury spokesman said: “It is clear from the documents that the Treasury was desperately trying to get the Bank involved. Ed Balls and Gordon Brown were trying to suck the Bank into the decision-making.”

The limited documents that have been released show that on 10th August 1998, Tom Scholar, then Mr Brown’s principal private secretary, ordered Treasury officials to work on a joint proposal with the Bank of England on a “programme for gold sales”.

Treasury officials met with their counterparts at the Bank on August 28th and asked them to prepare a paper with detailed options for selling gold. Only a technical “annex” of the paper subsequently prepared by the Bank has now been released.

In late November 1998, Treasury officials prepared a “secret” submission for Mr Brown on the gold sales. The Bank of England was asked for its comments on the document – but the released records make no reference to any comments being received.

Key Treasury advisers including Ed Balls and Ed Miliband, who are both now senior Government ministers, were copied in to the correspondence.

On December 23rd, a key aide to Mr Brown sent an email to the Treasury officials asking for Bank backing for the proposal. The email said: “The Chancellor is keen that officials at the Treasury and the Bank work together to produce a joint proposal. As I understand it the latest proposal is not a joint one. The Chancellor needs to know the status of the proposal, what the difficulties are in drawing up a joint proposal, how you think we can move forward in achieving a joint proposal.”

Another email sent later the same day again stressed that Mr Brown wanted a “joint proposal” he could discuss with the then Bank of England Governor, the late Lord George.

A note of a lunch meeting between Lord George and Mr Brown is censored in the sections stating the views of the Bank of England governor.

Last night, senior Bank of England sources confirmed that they had not supported the Treasury’s proposal to sell the gold reserves.

“This was a policy decision to be made by the Treasury and therefore it was not the responsibility of the Bank to support a proposal or prepare a joint-proposal” the source said. “Private advice was offered.”

The Treasury has unsuccessfully fought for more than four years to suppress all documents on the gold sales – following Freedom of Information requests from The Daily Telegraph.

However, after a series of private meetings between the Information Commissioner and the Treasury, the Government was finally ordered to release some information earlier this month.

But, the Information Commissioner controversially allowed the Treasury to censor large swathes of the documents in spite of public concern at the gold sale.

The issue was seized upon by David Cameron at last week’s Prime Minister’s Questions – expected to be the penultimate encounter before the election campaign. The Conservative leader asked Mr Brown to confirm that documents relating to the gold sale “will be published in full, with no redactions, before the general election”.

The Prime Minister answered “I am very happy for any document to be published on that matter.”

However, yesterday, a spokeswoman for the Prime Minister denied there had been a cover-up or that Mr Brown had misled Parliament.

“As the Prime Minister said at PMQs last week, it is a matter for the Information Commissioner and the Treasury which documents are released,” she said.

http://www.telegraph.co.uk/finance/7542525/Gordon-Brown-accused-of-cover-up-over-gold-sale.html

Blair has a commercial consultancy, called Tony Blair Associates, plus jobs advising a US bank and a Swiss insurer. He has a multimillion pound book deal. He also has a charity, the Tony Blair Africa Governance Initiative, and another called the Tony Blair Faith Foundation. But much of the income, which includes charitable donations from other sources, has been funnelled through a structure called Windrush Ventures No 3 Limited Partnership. Our contest asks: what is Windrush?

Blair has a complex web of structures involving 12 different legal entities handling the unprecedented millions he is receiving since he stepped down from office in 2007.

So mystifying are the former prime minister’s financial structures – which involve highly specialised limited partnerships and parallel companies – that the Guardian today launches an open invitation to tax specialists and accountants to attempt to explain the motivation behind such structures. We have published the Companies House documents and other legal papers regarding the structure of the partnerships at guardian.co.uk and invite expert comment via our site at guardian.co.uk/politics/series/blair-mystery.

There is no suggestion Blair is doing anything illegal. But he refuses to explain the purpose of the secretive partnerships.

Tax specialists say Blair could use these unusual arrangements at some point in the future to seek to transfer millions tax-free to his four children.

Blair denies, however, that the structures are such an inheritance tax avoidance scheme, known as a “family limited partnership”.

“Family limited partnerships” were being publicized to lawyers and accountants in November 2007 at the time Blair’s lawyers started to set up his structures.

Known in the trade as “Flips”, family limited partnerships are a way of getting round stricter inheritance tax rules in the 2006 budget, imposed by Gordon Brown while Blair was still prime minister.

Jay Krause, a partner at the law firm Withers, is credited with inventing the Flips concept for use in the UK. He told the Guardian it is “entirely possible” to use such Blair-style partnership structures legally to avoid inheritance tax.

Instead of setting up trusts, which are now heavily taxed, children can be granted an ongoing interest in the partnership’s wealth, as a “limited partner”.

There are other more conventional uses of such specialised limited partnerships, accountants say. These include venture capital schemes, private equity investments, or short-term projects such as film finance.

In each of those cases, the so-called limited partner invests cash, but has little control over what is done with it by the general partner.

In return, they are protected from unlimited liability if anything goes wrong.

None of this seems to apply to Tony Blair, however. No outside “angel” investing cash in Blair Enterprises appears in the records. The structure is so artificial that in one part of it, Blair is, in effect, forming partnerships with himself.

The former prime minister refuses to offer any explanation of why he is using the complex structures.

As they stand, they were recently described by the Financial Times as “neither tax efficient nor managerially useful”.

Millions of pounds have been funnelled through one arrangement called Windrush Ventures and a second parallel structure called Firerush Ventures.

They may handle some of the large amounts coming in from Blair’s book deal, his six-figure speaking fees, his banking and insurance consultancies, and his pay from Middle Eastern regimes.

The Windrush structure pays for Blair’s £560,000 a year lease on his Mayfair office, in Grosvenor Square near the US embassy.

Blair’s profit-making commercial schemes involve 12 different Windrush and Firerush legal entities centring on a pair of “limited partnerships”.

His spokesman, former No 10 staff member Matthew Doyle, refuses to say who Blair’s partner is.

Windrush Ventures No 3 LP, for example, consists on paper of a partnership between an entity owned by Blair himself and an anonymous off-the-shelf company.

This off-the-shelf company, which appears to have been set up by Alex Harle, Blair’s lawyer at the Westminster solicitors Bircham, Dyson Bell, is merely called BDBCO No 819 Ltd.

Set up as a nominee company to act as a trustee or an executor of a will, this entity does not reveal its ownership on records at Companies House. Instead, its shares are listed as held by a second off-the-shelf entity, BDBCO No 822.

This company in turn conceals its true ownership. Its shares are listed as held by the lawyers, acting as nominees.

This partner company does not appear to have made any significant investments on its own behalf. The register shows that its sole contribution to the partnership when it was set up in December 2007 was the sum of £19.

The Guardian asked Doyle who owned Blair’s partner company. We also asked for the terms of the partnership agreement which divides up the rights to Blair’s money. We asked the purpose of the schemes, and what funds had been paid into them.

Doyle refused to answer. He even refused to say why the name “Windrush” was chosen.

In a written statement, he said: “Why we set it up … was in order to allow Mr Blair’s office sensibly to administer his different projects, in accordance with relevant regulations and company law in the UK. He has an operation that has over 80 people working for it around the world. This was done on the basis of advice.”

The limited financial information available under company law shows that more than £6m has been passed through the Windrush partnerships, and on to a company owned personally by Blair, called Windrush Ventures Ltd.

The £6m is extracted from the partnership funds by being described as “management fees” going to the general partner – which is a Blair-owned entity.

There is no published record of what other cash or assets remain in the partnership, or how it will be distributed.

The opacity of Blair’s Windrush structures is increased by the fact that they have also been used to handle some charitable donations for projects in Africa.

A Sainsbury family charity, the Gatsby foundation, declares it has paid a total of £992,000 to the Windrush limited partnership. This was for charitable projects in Rwanda, in the two financial years to April 2009.

The Gates foundation, funded by the founder of Microsoft, declares it paid $2.46m (£1.49m) to the Windrush LP in June 2008, for similar capacity-building projects in Sierra Leone.

Blair this year applied to set up a charity, the Tony Blair Africa Governance initiative, in February 2009, according to the Charity Commission.

But its application was not accepted until this month, partly because of its novelty and partly through concerns as to whether it was sufficiently separated from Blair’s personal office arrangements.

The link with Blair and his office was “one of the issues we considered … when looking at public benefit and the independence of the charity,” the Commission said.

Blair’s Wealth

Blair is estimated to be in the process of receiving up to £14m, making him one of Britain’s wealthiest ex-prime ministers. This includes a £4.6m memoirs deal with Random House.

He is also receiving a series of US fees from the Washington Speakers Bureau for making speeches estimated to include a £600,000 signing-on fee; consultancies with the US bank, JP Morgan and with Swiss insurers Zurich Financial Services; and commercial consultancy deals through his private firm, Tony Blair Associates, with regimes in Kuwait and the United Arab Emirates among others.

The growth in Blair’s personal wealth was illustrated in May 2008, when he agreed to pay £5.75m for the late actor John Gielgud’s Buckinghamshire residence, described as “a small stately home”.

This was in addition to the £4.45m paid earlier for a London home in Connaught Square, together with an adjoining mews house.