The Dubai Bubble has burst

Just 2 months ago after visiting Dubai for the first time I wrote about the Dubai Bubble and today it seems that this bubble has burst with one knock on effect being the FTSE 100 index suffering it’s biggest one day fall since March.

Clearly not everything was ok when I visited back in September but the failure of a government owned company, Dubai World, to meet a debt repayment will naturally lead to concerns about whether the remaining $59bn debt will be repaid. To put this in perspective it is the equivalent of the NHS in the UK not meeting a $3.5bn payment.

There is little definitive evidence yet of how much of the outstanding $59bn debt is owed to UK banks, but the big drops in their share prices suggest they are heavily exposed. Now I am not a genius and I am certainly not paid a million pound salary, but I was able to indentify the problems out there in just a few days so the banks really deserve what they have coming to them this time.

Have Labour just won the 2015 General Election?

There is one bill above all the others in today’s Queen’s speech which will be making all the headlines tonight, and that prize goes to:

Fiscal Responsibility Bill

Provides a "firm and binding statutory basis" for the government’s promise to halve its budget deficit within four years. Gives Parliament power to approve medium-term fiscal plans. Promises that businesses and investors will have "certainty" about the government’s fiscal plans.

Firstly apologies to the BBC for lifting this straight from their website but we all have to get our news somewhere!

Now ignoring the fact that I would have thought the Chancellor and Prime Minister (who just happened to be the Chancellor for the previous 10 years) should have been doing everything they can to reduce the deficit anyway, or arguably have avoided it in the first place this might just be Labour’s ticket back to power in 4-5 years time.

Regardless of whether this has bill gets passed into law Brown has set his stall out for the next general election, which even he must know he is going to lose. So after they have packed their bags to return to those luxury second homes we have all paid for and David Cameron is in power, his first term will effectively be measured against this impossible goal (maybe it is possible, but we’d all be living off bread and water for that to happen).

So come the 2015 general election whoever is leading the Labour party (probably David Milliband) can attack the Conservatives for failing to halve the budget deficit and if the public buy this argument they’ll win the 2015 election by a landslide. 

Of course if the Conservatives win next year you can never write off them simply imploding in a series of internal battles over Europe. So maybe it is time we gave the Monster Raving Loony Party a try, at least their manifesto promise to withdraw MPs’ £118,000 expenses allowance, and for the money "in future be distributed to the poor and needy so that they can waste it instead" makes more sense than some of the nonsense the major parties are suggesting. And I am a big supporter of their idea to introduce a 99p coin to “save on change”

Remember, remember the Fifth of November

…. The Gunpowder Treason and Plot, I know of no reason, Why the Gunpowder Treason, Should ever be forgot.

Now I wasn’t around back in 1605 when Guy Fawkes attempted to destroy the Houses of Parliament so I can’t comment on what happened that evening. But ever since that evening festivities have centred on the use of fireworks as we celebrate the downfall of the Gunpowder Plot.

I happen to live in a 7th floor flat so normally I have great views of the almost constant fireworks in the week leading up to and after the 5th November. But this year there were very few fireworks, clearly a sign of the harder times.

So maybe it’s time we forgot all the current economic measures such as inflation, unemployment, GDP, balance of payments etc and used the number of fireworks launched on the 5th November as a true measure of the state of the economy. After all, what better measure than the amount of money people are willing to set fire to!