Precious little detail on the FirstBuy first-time buyer scheme so far, but it seems designed partly to prop up the housing market:

The new FirstBuy scheme will provide a £250 million fund to help first-time buyers get on the housing ladder, via a shared equity arrangement. It will be jointly funded by the housebuilders.

Osborne claims FirstBuy will help 10,000 first-time buyers, which is non-trivial in a market where only 43,000 or so mortgages were approved in February 2011 – way down from the 80,000 or so that was previously seen as required for stability in the housing market.

(Source: Monevator)

There’s a pretty striking article in Vanity Fair this month by Michael “Liar’s Poker” Lewis on the Greek debt crisis:

Beyond a $1.2 trillion debt (roughly a quarter-million dollars for each working adult), there is a more frightening deficit. After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks.

Some quirky nuggets include:

• The average Greek railway employee earns 65,000 euros a year – yet the nationalised train system is so broken it’s been calculated that it’d be cheaper to put all the passengers into mini-cabs.
• ‘Arduous’ pensions kick in at 55 for men and 50 for women. Among those who’ve managed to get themselves on the list are hairdressers, radio announcers, and musicians.
• No one is ever punished for not paying taxes – it is compared by one insider to not opening a door for a lady.

There’s paragraph after paragraph of this stuff. Dumbos who compare Greece with the US or UK, read it and weep tears of relief.

(Source: Vanity Fair)

While I am pretty bullish and think the banking system is now fundamentally sound – a combination that makes people drop their forks in open-mouthed amazement at a certain kind of dinner party – even I’ll admit the EU banking stress tests weren’t exactly testing the banks against Armageddon:

An important caveat is that the chance of another extreme lurch downwards in GDP so quickly after the last is negligible.

In fact, perhaps it could only be brought about by a banking panic inspired by a too-severe stress test! (They’re nothing if not realists in Brussels).

Besides, the main point of the stress tests was to flush data out of the banks and into the market. Now you – or your team of back office quants – can run your own stress test and reach your own conclusions.

(Source: Business Insider)

You don’t set up a new watchdog unless it at least starts by telling you what you want to hear, and if you’re UK Chancellor George Osborne that means growth (so spending cuts won’t be fatal) but weak growth (so they’re still required):

The Office for Budget Responsibility predicts that the economy will expand 2.6% in 2011, down from the 3.25% estimate given in Labour’s last Budget.

The lower figure will likely increase the impetus of the coalition government to cut public spending, as lower growth means fewer tax revenues.

The chancellor is due to unveil an emergency budget next week.

However, the Office for Budget Responsibility also predicts that the UK’s public deficit will fall, down to 10.5% of GDP in the 2010-11 financial year, from the 11.1% estimated by Labour.

It uses the old Treasury model, anyway. There’s just no politician picking what GDP prediction looks ‘likeliest’ on the fan chart…

(Source: BBC)

According to this article in The Guardian, the US outcry over the BP leak in the Gulf is as usual rather myopic coming from the world’s largest per capita consumer of oil.

Look at the situation in Nigeria:

According to Nigerian academics, writers and environment groups, oil companies have acted with such impunity and recklessness that much of the region has been devastated by leaks.

In fact, more oil is spilled from the delta’s network of terminals, pipes, pumping stations and oil platforms every year than has been lost in the Gulf of Mexico, the site of a major ecological catastrophe caused by oil that has poured from a leak triggered by the explosion that wrecked BP’s Deepwater Horizon rig last month.

I think the US public is right to be up-in-arms about the BP leak – but I think it’s anger should go further.

(Source: The Guardian)

This is a bit spurious in that it doesn’t really make the picture any clearer – except in that it shows the huge gap between commitments and what’s needed:

Click to Enlarge

It’s from The Guardian. I trust that newspaper remembers the scale of the task required when it’s kicking the Tory’s for doing the job in a few year’s time.

(Source: The Guardian)

(Source: Unknown, came to me via email like in the old days)

The European Union was never an experiment. It had to be a project, because monetary union without political union was always going to throw up analogous situations that would lead to the mire we’re seeing in Greece.

With Southern European countries having lived high on the hog (or the Palma ham) on the back of low interest rates more appropriate for Germany and France, they’ve run up huge debts and imbalances, and there’s no way out but to get deeper into bed with their European fellows – or to get out and go bust.

Compare that with the UK, which is booming (okay, getting there!) thanks to the devalued pound.

As John Redwood MP recently wrote on the UK’s advantage versus the Eurozone:

The market is beginning to work, to adjust the big imbalance in the UK balance of payments. Foreign shoppers will swell receipts, whilst UK shoppers will buy fewer foreign made goods as their prices surge.

Families nervous of job prospects and finding it difficult to balance domestic budgets will cut back on foreign holidays. Gradually imports and exports will come into better balance.

Redwood spells out the issues facing the Eurozone from a political perspective, as opposed to the trader-centric spin the financial media has taken.

He’s quite right to – the political ramifications are what will matter in the long term, once the smashed plates in Athens have been tidied away.

The reason I say the Eurozone was a project is because an experiment has multiple outcomes, and the Euro could end only one way.

Economic and monetary union without political integration is a pipe dream – just ask the United States.

Margaret Thatcher saw this very clearly, and while I’m no dyed-in-the-wool Tory, every single one of us – particularly the UK manufacturing workers who would never voted for her – should raise a glass tonight.

I’m also a fan of the European Union – anyone familiar with the region’s insanely bloody past must be thankful for 65 years of peace, give or take the fringes (and the other unifying force that was the Soviet threat…) But the Union works fine as a friendly trading bloc. Beyond that it risks stoking the very tensions its founders sought to ease.

The Greek drama will make the Eurozone stronger in the medium term, but the long-term aspirations of its people and the consequences of the inevitably deeper political union to come can only be guessed at.

The Telegraph reckons a hung parliament is looking more likely on the back of a poll printed in yesterday’s The Sunday Times.

It says currency traders are selling the pound as a result:

[The poll shows] that the Conservatives’ lead has narrowed to just two percentage points over the Labour Party. Experts reckon if that voting pattern were replicated on polling day – widely expected to be May 6 – Labour would win enough seats to lead a hung parliament in which neither of the main parties has a majority. [...]

“The (Sunday Times) opinion poll has given us the prospect of maintaining this Government for another few years,” said Hans-Guenter Redeker, head currency strategist at BNP Paribas. “The markets have reacted and are giving a vote of no confidence in Gordon Brown.”

Sterling is down more than a cent against the dollar to $1.5097, its lowest since May 2009.

I didn’t see Conservative leader David Cameron’s speech yesterday, but traders apparently believe feeling a ‘patriotic duty’ to oust Labour won’t be enough to do it.