Nobody cares if a country's credit rating gets cut, so why listen to the agencies at all?

Credit ratings agencies are wrong, confused and frequently completely ignored

Bloomberg reported on a new study yesterday evening, showing the effects of a credit rating agency cutting its rating of a sovereign's debt is not what many expect it to be. 

Almost half the time, government bond yields fall when a rating action suggests they should climb, or they increase even as a change signals a decline, according to data compiled by Bloomberg on 314 upgrades, downgrades and outlook changes going back as far as 38 years. The rates moved in the opposite direction 47 percent of the time for Moody’s and for S&P. The data measured yields after a month relative to U.S. Treasury debt, the global benchmark.

The British experience is one of the key case studies in the piece, and we are actually one of the better examples of the ability of ratings agencies to move the market. On the chart below, the first orange flag is when Moody's said that the UK should implement severe cuts to keep it's Aaa rating, and the second is when our Aaa rating was put on negative outlook. Bad news would be expected to move the line up:

Yup, the markets pretty much ignored Moody's. Not quite as embarrasing as the French experience. In this case, the first orange flag is Standard and Poor's reaffirming the country's AAA rating and the other three are, respectively, a warning of a downgrade, a downgrade, and being put on negative outlook:

So the good news was followed by a steady rise in the spread, and the bad news was followed by sharp drops. Gee, I sure hope my country doesn't get downgraded by a ratings agency!

Not that any of this news is particularly new. Bloomberg even cite an IMF study from January which came to much the same conclusion:

In a January analysis of Moody’s rating changes, researchers at the IMF used credit derivatives to show that prices moved in the expected direction 45 percent of the time for developed countries and 51 percent for emerging economies. For outlook changes, the ratios were 67 percent and 63 percent.

The IMF study, by going into a bit more detail, reveals a bit of what's going on. Notice that the effect of outlook changes was significantly stronger than the effects of actual downgrades. As Felix Salmon points out, one of the strengths of markets is that they are very good at pricing in future events. When an outlook changes, a downgrade is likely to follow, and so a lot of the expected spike in yields happens before the actual downgrade.

But the other reason why the ratings agencies are ignored so often is that they simply aren't very good, particularly when dealing with countries like the UK and US, which control their own currencies. As Jonathan Portes has written time and again:

When it comes to rating sovereign debt, they simply do not know what they are talking about; worse than that, they do not even understand what their own credit ratings mean.

Ratings agencies are frequently ignored because it is nigh-on impossible to parse their ratings into actual claims. They aren't discussing increased risk of default; and nor are they discussing the risk of investing in gilts, because what they cut ratings for is frequently good for gilts (low growth, for instance, makes gilts a better deal). And the Bloomberg piece even closes with a quote which demonstrates the agencies' own cluelessness:

"The U.K. shouldn’t care at all what its rating is,” says Vincent Truglia, managing director of New York-based Granite Springs Asset Management LLP and a former head of the sovereign risk unit at Moody’s. “A rating is not what you’re supposed to be interested in. You’re supposed to be interested in the right public policy.”

If the UK shouldn't care about its own rating, then the fact that Moody's issues ratings phrased as guidance to governments – like the warning in 2010 that the UK needed to implement "severe cuts" to maintain its Aaa rating  – is very strange indeed. Ultimately, Truglia is just trying to shift the blame for the disastrous outcomes caused by policies his organisation recommended and threatened governments into implementing.

Credit ratings agencies: Falling over all the time? Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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A first look at this week’s magazine | Summer double issue

All the highlights from the new issue.

29 July - 11 August 
Summer double issue

 

Special report: Stephen Bush visits three Labour heartlands.

George Eaton on the challenge facing Jeremy Corbyn.

Xan Rice on the Met’s new weapon, the super-recognisers.

Martin Fletcher on abortion in Northern Ireland.

Notebook from Istanbul: Jeremy Bowen sees rough times ahead for Turkey.

Diary: Tim Farron on the battle between liberals and authoritarians.

Tanya Gold on Philip Green and Britain’s honours system.

Deborah Levy is taken back to her hero-worshipping teenage years by Paul Morley’s The Age of Bowie.

Kate Mossman on the multimillion-dollar world of Trans-Siberian Orchestra – the biggest band you’ve never heard of.

Hunter Davies recalls the year it all went right: 1966.

John Bew is beguiled by Malcolm Rifkind’s genteel memoir.

From anarchists to Isis: John Gray on the urges that drive modern mass murder.

A N Wilson on the theology of Martin Luther according to Lyndal Roper and Diarmaid MacCulloch.

 

****

Special report: Labour’s heartlands on the party’s future.

The NS’s special correspondent, Stephen Bush, visits Wallasey, Pontypridd and Islington North – three Labour heartlands that show much about the party’s future:

This summer, there have been three main characters in the soap opera (or farce) that has played out in the party – the beleaguered leader, Jeremy Corbyn, of Islington North; the leading rebel, Angela Eagle, whose constituency is in Wallasey; and finally, the eventual challenger, Owen Smith of Pontypridd. I visited all their constituencies in a whirlwind week in the hope that it would illuminate the leadership race and the wider challenges for left-wing politics in Britain.

In all three places, the easy assumptions about Corbyn’s appeal were complicated by the facts on the ground, but a common thread united them. Outside the Holloway Road Odeon, I heard it first: “Jeremy is a nice guy, but he’s not a leader.” The trouble was that even those who questioned Corbyn’s leadership had little faith in those challenging him.

On 4 July, during a meeting of the Parliamentary Labour Party, Neil Kinnock talked about “the supermarket test”: how people in Tesco or Lidl would say “I want to vote Labour, but I can’t vote for Ed Miliband”. He urged Labour’s representatives in the Houses of Parliament to “apply the supermarket test for Jeremy Corbyn and see what answer you get”.

In reality, they had been applying it for months. That was the spur to the attempts in late June to oust Corbyn as Labour leader. For the 172 MPs who said they had no confidence in him – and the 41 per cent of Labour members who told YouGov that they thought Corbyn was doing either “fairly badly” or “very badly” – he is an obstacle on the road to saving Britain from the Tories. Idealism didn’t create a minimum wage, set up Sure Start centres, or bring in civil partnerships: assembling a broad enough coalition to elect a Labour government did.

The minority of MPs who support him, and the thousands of members who say they will vote for him again, feel differently. For them, Corbyn’s demise would feel like a capitulation. It would feel like accepting that neoliberalism, capitalism and austerity have won the day, that the role of the Labour Party is to ameliorate rather than oppose them.

When I visited Islington North, Labour’s leadership election was only just starting to get under way and Angela Eagle was still in contention. Her tough performances deputising for the leader at PMQs have made her popular at Westminster but that enthusiasm has not made it as far north as Islington. “To me, I can’t see Angela Eagle as a prime minister either,” said Mike, one of the regulars at the Coronet, a Wetherspoons on the Holloway Road. “What are they running her for?”

The same sentiment prevailed in Wallasey, the Wirral constituency that Eagle has represented since 1992. There, too, were a few pockets of Corbynmania. There was also a sense that Labour is heading for defeat as long as Corbyn remains in place – but little faith in Eagle’s ability to alter that trajectory.

Wallasey is of less long-standing Labour vintage than Islington North. It remained steadfastly Conservative even between 1945 and 1966, and Eagle first won the seat in 1992. Although she is now in possession of a 16,000-vote majority, her neighbour Margaret Greenwood took Wirral West seat back from the Conservatives by a margin of only 400 votes. Tory strategists still eye the Wirral hungrily.

Wallasey is home to New Brighton, the seaside resort commemorated in Martin Parr’s 1985 series The Last Resort. A popular tourist destination for most of the first half of the 20th century, New Brighton was hurt by tidal changes in the River Mersey, which stripped most of its sand, and by the closure of its pier, but it remains a favoured destination for retirees and day trippers. In times past, Liverpool families that did well for themselves crossed the Mersey, bought a home – and promptly started to vote Tory. Wallasey, and the Wirral as a whole, is still where Scousers who have made it good set up their homes, but nowadays their politics usually survive the river crossing unscathed.

Yet there is still a vestigial sympathy for Conservatism in the leafier parts of Victoria Road and Seabank Road, one that is largely absent from Islington North. Perhaps Theresa May’s diligence in dealing with families affected by the Hillsborough disaster, which was mentioned frequently when I asked people for their opinion of the new Prime Minister, is sufficiently well regarded here that it is beginning to erode the Thatcherite taint still hanging over the Tory rosette on Merseyside.

However, it is not just Labour politics that is proving increasingly capable of weathering the journey across the Mersey. In Westminster, the chatter is that Militant – driven out of Labour in the 1980s, though most of its members continued to live and work on Merseyside – is back as a force in the city’s constituencies, and that many of its members have moved out and retired to New Brighton. Their influence is blamed for the series of damaging stories that slipped out of Wallasey in the days after Eagle declared her candidacy.

“There’s a reason why they’re so good at getting themselves on the national news and in the papers,” one MP tells me. “It’s that they’ve done all this before.”

 

The Politics column: George Eaton on the challenge facing Jeremy Corbyn.

The NS’s political editor, George Eaton, argues that Jeremy Corbyn’s race against Owen Smith is the start of a struggle with no obvious end.

In any discussion of Labour’s crisis, the 1980s are invoked. But the differences are as notable as the similarities. The left today controls the leadership, rather than merely the constituencies; the trade unions are no longer right-aligned; a “one member, one vote” system has replaced the electoral college. It was in less adverse circumstances, then, that 28 Labour MPs joined the break­away Social Democratic Party in 1981. For this reason, the possibility of a new schism endlessly recurs in media debate. Yet it is not one that MPs intend to pursue.

Labour’s tribalists have no intention of leaving their party, while the more tactically minded see little potential for a new grouping to flourish. The electoral marketplace is too crowded to achieve power without coalitions, merely replicating present divisions in a new form. Theresa May’s economic interventionism further limits the space for a centre-left insurgency to occupy.

Rather than retreating, Labour MPs intend to mount repeated challenges to Corbyn. As one told me, “We only need to get lucky once. He needs to get lucky every time.” Corbyn’s allies are hopeful that some rebels will emulate Sarah Champion MP and rejoin the front bench if he wins. One suggested that the proposed boundary changes, which will be published on 13 September, would encourage discipline in order to prevent deselection by local activists. Still, most MPs have no intention of rescinding their opposition to Corbyn.

It is deselection by the electorate at large, rather than by members, that some in Labour fear most. Though May has ruled out an early contest (having privately assured backers that she would not trigger one), the temptation could prove irresistible. An ICM poll published on 26 July gave the Tories their highest lead (16 points) since 2009. Prime ministers are rarely stronger than when they first enter office, a lesson that Gordon Brown neglected fatally. But such are Labour’s divisions that May could conclude that she need not show haste. Until the members reflect the MPs, or the MPs reflect the members, unity will remain elusive. As Corbyn and his opponents contemplate a struggle with no obvious end, the prize that both seek is rapidly diminishing in value.

 

The super-recognisers: Xan Rice on the new weapon in Scotland Yard’s kit.

The NS’s features editor, Xan Rice, reports on how a new, elite unit of the Metropolitan Police is catching some of London’s most prolific criminals:

Since the 19th century, doctors have known that some patients who suffer brain trauma lose the ability to recognise faces, a condition known as acquired prosopagnosia (from the Greek prosopon, “face”, and agnosia, “not knowing”). In the 1970s scientists discovered that a congenital form of the disorder affects a much wider segment of the population – ordinary functioning people who have never experienced head injuries and have perfect vision.

Studies suggest that two out of every 100 people have developmental prosopagnosia, meaning they have great difficulty recognising faces, sometimes even their own in the mirror. To identify someone familiar, a face-blind person relies on clues such as voice, gait, posture or unusual facial characteristics.

Among the best-known prosopagnosics was the late doctor and author Oliver Sacks, who became aware of his bewildering predicament as a schoolboy in London. He learned to pick out his best friends, Eric Korn and Jonathan Miller, by their specific features. “Eric had heavy eyebrows and thick spectacles, and Jonathan was tall and gangly, with a mop of red hair,” Sacks wrote in the New Yorker. When he looked at old photographs a decade after leaving school, Sacks could not identify a single classmate. Stephen Fry and Jane Goodall are other well-known sufferers of the disorder, which is associated with lesions in a part of the brain known as the fusiform gyrus.

In 2009 a trio of researchers led by Richard Russell published the results of their study, which aimed to determine if there was a third group of people when it came to face recognition, whose problem (or rather talent) was that they struggled to forget a face. Russell, a psychologist who was then based at Harvard, tested four people claiming to have superior face recognition abilities, including a 26-year-old female student who told him: “It doesn’t matter how many years pass. If I’ve seen your face before, I will be able to recall it.” Russell set his subjects and a larger control group two tasks, involving famous faces and unfamiliar faces. In both, the test group performed “far above average”, leading Russell to coin the term “super-recognisers”. “In both face recognition and face perception, the super-recognisers are about as good as many developmental prosopagnosics are bad,” he and his colleagues wrote.

Around the same time, Detective Chief Inspector Mick Neville of the London Metropolitan Police was reaching his own conclusions about people with an exceptional ability to recognise faces. In 2007, Neville had set up a unit to collate and circulate images of unidentified criminals captured on CCTV. Officers were asked to check the Met’s “Caught on Camera” notices to see if they knew any of the suspects. “It became apparent that some officers were much better than others,” Neville told me. “For example, if I received 100 names, some officers would have submitted ten or 15, while in the main they were one-off identifications.”

At first, Neville assumed that the prolific officers simply knew more criminals than the rest. Then he realised that it had more to do with their ability to remember faces: the best identifiers could spot a suspect they had never met merely after viewing a photograph of them.

In early 2011, he discussed his findings at a conference attended by Josh Davis, a psychologist at the University of Greenwich. For his PhD, Davis had studied the use of CCTV identification in court proceedings. “Most of my research had shown that people were not very good at face-matching,” Davis told me one recent morning when we met at a cafeteria on campus. “So I was suspicious of the police claims.”

He agreed to test the facial recognition skills of 20 officers who excelled at Caught on Camera identifications. To Davis’s surprise, most of them scored much better than the norm, and a few were exceptional.

That August, the London riots broke out. Met officers trawled through tens of thousands of hours of CCTV footage, identifying 609 suspects responsible for looting, arson and other criminal acts. One officer, PC Gary Collins, made 180 identifications, including that of one of the most high-profile suspects, who had thrown petrol bombs at police and set cars on fire. During the riots, the man covered his mouth and nose with a bandana and pulled a beanie low over his forehead. Collins recognised him as a criminal whom he had last seen several years earlier. The man was convicted and sentenced to six years in prison.

Now convinced of the super-recogniser theory, Neville assembled a standby team of 150 officers who excelled at identification.

 

The unholy huddle: Martin Fletcher Northern Ireland and the problem with abortion.

Northern Ireland’s strict anti-abortion laws are supported by politicians
across the sectarian divide – and the province’s women are paying the price, as Martin Fletcher reports:

Officially 833 women travelled from Northern Ireland to England for abortions in 2015, though the real number is probably double that. Most were aged between 20 and 35, and 62 per cent had partners, so few were the promiscuous teenagers of the politicians’ imagination.

Many people regard Northern Ireland’s wilful exporting of its problem as shameful. “We should look after our own women,” Professor Jim Dornan, one of the leading obstetricians in the province, said. But no political redress is imminent.

Although a more liberal assembly was elected in May, and though Sinn Fein – the second-biggest party – now favours a limited relaxation of the abortion law, the DUP retains what is in effect a veto over any change, thanks to a procedural device called a “petition of concern”, which was originally designed to safeguard minority rights in the power-sharing assembly. That is how the DUP thwarted a vote in favour of gay marriage last November.

Nor is any legal redress imminent. John Larkin, the attorney general, has appealed against Justice Horner’s ruling that the present law breaches human rights. Whatever the result of that appeal, the case is expected to go first to the Supreme Court in London, then to the European Court of Human Rights in Strasbourg.

Increasingly, however, the “abortion pill” offers women in Northern Ireland a way around the ban, especially for those too poor to go to England.

The pills, easily purchased online for as little as £50, are perfectly safe if administered properly, but not if taken secretly by women who may ignore the instructions, use them too late, have pre-existing medical conditions, or hesitate to seek help if they suffer complications for fear of prosecution. There is a danger of severe haemorrhaging, and if the foetal sac is incompletely discharged the remnants can become infected, leading to potentially fatal sepsis.

Though used worldwide, such pills are still illegal in Northern Ireland. In February an anonymous, 21-year-old woman was convicted and given a three-month suspended prison sentence after her Belfast flatmates reported her to the police for using them. Other prosecutions are pending.

But, like latter-day suffragettes, some women’s rights activists are starting to flout the law openly, defying the police to arrest them. Last year 215 women signed an open letter in which they said they had bought abortion pills, and invited prosecution. In May three others, hoping for a showcase trial, presented themselves at a police station in Derry and asked to be prosecuted for procuring the pills. In June pro-choice activists used a drone to fly abortion pills across the border from the republic to show that the law was absurd and unenforceable.

The activists argue that, by banning the pills, Northern Ireland’s politicians are merely driving abortion underground, with potentially fatal consequences of a sort that should belong to the past.

“Making abortion illegal doesn’t make it go away. It makes it unsafe,” said a young woman called Cara, who once self-aborted in a Travelodge hotel room and now helps other women who need to have abortions. Over a drink at a pub in Belfast, she told me how, in her own caravan, she had helped a part-time shop assistant terminate her pregnancy. The woman couldn’t afford to go to England and was too ashamed to tell her family she was pregnant.

Health-care professionals are increasingly alarmed by the implications for women. “This is the modern equivalent of the backstreet abortion. It might not be coat hangers and knitting needles, but the outcome is the same,” said Breedagh Hughes, of the Royal College of Midwives. “My biggest worry is that women will be deterred from seeking the help they need, and that the old spectre of women dying from botched abortions will rear its ugly head again.”

 

Jeremy Bowen: Notebook from Istanbul.

The BBC’s Middle East editor, Jeremy Bowen, argues that President Recep Tayyip Erdogan’s purge of Turkey’s armed forces and civil society was too big and too organised to be a mere reaction to the failed 15 July coup:

Even at the worst of times Istanbul is a beautiful city, and the Bosphorus is a remarkable stretch of sea. Turks get very irritated if you call it a river. They are right. The Bosphorus has a life and energy that a river could never equal. Spend five minutes watching the Bosphorus and you can understand why Orhan Pamuk, Turkey’s Nobel laureate for literature, became fixated by it as he grew up, tracking the movements of the ocean-going vessels, the warships and the freighters as they steamed between Asia and Europe.

I went to an Ottoman palace on the Asian side of the Bosphorus, waiting to interview the former prime minister Ahmet Davutoglu. He was pushed out of office two months ago by President Recep Tayyip Erdogan when he appeared to be too wedded to the clauses in the Turkish constitution which say that the prime minister is the head of government and the president is a ceremonial head of state. Erdogan was happy with that when he was prime minister. But now he’s president, he wants to change the constitution. If Erdogan can win the vote in parliament he will, in effect, be rubber-stamping the reality he has created since he became president. In the days since the attempted coup, no one has had any doubt about who is the power in the land.

City of melancholy
The view from the Ottoman palace was magnificent. Beneath a luscious, pine-
shaded garden an oil tanker plied its way towards the Black Sea. Small ferries dodged across the sea lanes. It was not, I hasten to add, Davutoglu’s private residence. It had just been borrowed, for the backdrop. But it reminded a Turkish friend of something she had heard once from the AKP, Erdogan’s ruling party: that they would not rest until they were living in the apartments with balconies and gardens overlooking the Bosphorus that had always been the preserve of the secular elite they wanted to replace.

Pamuk also writes about hüzün, the melancholy that afflicts the citizens of Istanbul. It comes, he says, from the city’s history and its decline, the foghorns on the Bosphorus, from tumbledown walls that have been ruins since the fall of the Byzantine empire, unemployed men in tea houses, covered women waiting for buses that never come, pelting rain and dark evenings: the city’s whole fabric and all the lives within it. “My starting point,” Pamuk wrote, “was the emotion that a child might feel while looking through a steamy window.”

Istanbul is suffering a mighty bout of something like hüzün at the moment. In Pamuk’s work the citizens of Istanbul take a perverse pride in hüzün. No one in Istanbul, or elsewhere in Turkey, can draw comfort from what is happening now. Erdogan’s opponents wonder what kind of future they can have in his Turkey. I think I sensed it, too, in the triumphalist crowds of Erdogan supporters that have been gathering day after day since the coup was defeated.

Down with the generals
Erdogan’s opponents are not downcast because the coup failed; a big reason d was that it had no public support. Turks know way too much about the authoritarian ways of military rule to want it back. The melancholy is because Erdogan is using the coup to entrench himself even more deeply in power. The purge looks too far-reaching, too organised and too big to have been a quick reaction to the attempt on his power. Instead it seems to be a plan that was waiting to be used.

Turkey is a deeply unhappy country. It is hard to imagine now, but when the Arab uprisings happened in 2011 it seemed to be a model for the Middle East. It had elections and an economy that worked and grew. When I asked Davutoglu around that time whether there would be a new Ottoman sphere of influence for the 21st century, he smiled modestly, denied any such ambition and went on to explain that the 2011 uprisings were the true succession to the Ottoman empire. A century of European, and then American, domination was ending. It had been a false start in Middle Eastern history. Now it was back on track. The people of the region were deciding their futures, and perhaps Turkey would have a role, almost like a big brother.

Turkey’s position – straddling east and west, facing Europe and Asia – is the key to its history and its future. It could be, should be, a rock of stability in a desperately unstable part of the world. But it isn’t, and that is a problem for all of us.

Contagion of war
The coup did not come out of a clear sky. Turkey was in deep crisis before the attempt was made. Part of the problem has come from Erdogan’s divisive policies. He has led the AKP to successive election victories since it first won in 2002. But the policies of his governments have not been inclusive. As long as his supporters are happy, the president seems unconcerned about the resentment and opposition he is generating on the other side of politics.

Perhaps that was inevitable. His mission, as a political Islamist, was to change the country, to end the power of secular elites, including the army, which had been dominant since Mustafa Kemal Atatürk created modern Turkey after the collapse of the Ottoman empire. And there is also the influence of chaos and war in the Middle East. Turkey has borders with Iraq and Syria, and is deeply involved in their wars. The borders do not stop the contagion of violence. Hundreds of people have died in the past year in bomb attacks in Turkish cities, some carried out by the jihadists of so-called Islamic State, and some sent by Kurdish separatists working under the PKK.

It is a horrible mix. Erdogan might be able to deal with it better if he had used the attempted coup to try to unite Turkey. All the parliamentary parties condemned it. But instead, he has turned the power of the state against his opponents. More rough times lie ahead.

 

Diary: Tim Farron.

In this week’s NS Diary, the leader of the Liberal Democrats, Tim Farron, writes that the biggest divide in British politics today is not left against right, but liberals against authoritarians. And he sees the Lib Dems resurgent:

It is a boost for us that Nick Clegg has agreed to return to the front line and be our Brexit spokesperson. I hadn’t even had a chance at our meeting to make him the offer when he said: “Before we start, I’ve been thinking about this and want to take on the fight over Europe.”

With Labour apparently willing to give the Tories a free pass to take us out of Europe, the Liberal Democrats are the only UK-wide party that will go into the next election campaigning to maintain our membership of the EU. The stage is remarkably clear for us to remind Theresa May precisely what she would be risking if we abandon free trade, free movement, environmental protection, workers’ rights and cross-border security co-operation. More than a month on from the referendum, all we have heard from the Tories is that “Brexit means Brexit” – but they have given us no clue that they understand what that means.

Premature obituaries
Not long ago, the received wisdom was that all political parties were dying – the supposed corpses have twitched into life. True, many who have joined Labour’s ranks are so hard left that they don’t see winning elections as a primary (or even a desirable) purpose of a party, and opening up Labour to those with a very different agenda could ultimately destroy it.

Our experience has been happier: 20,000 people joined the Liberal Democrat fightback in the wake of the 2015 general election result, and 17,000 more have joined since the referendum. We now have more members than at any time this century.

Breaking up is hard to do
Journalists have been asking repeatedly if I want to see the break-up of the Labour Party, with moderates defecting to the Liberal Democrats. I have been clear that I am not a home-wrecker and it is for Labour to determine its own future, just as I focus on advancing the Liberal Democrat cause. Yet I have also been clear that I am happy for my party to be a home for liberals of whatever hue. I enjoyed campaigning in the referendum with a variety of progressive figures, just as moderates from different parties shared platforms in 1975. It struck me that far more unites us than divides us.

That said, not all “moderate” Labour figures could be described as “liberal”, as John Reid demonstrated as Labour home secretary. The modern political divide is less left v right than authoritarian v liberal. Both left and right are looking increasingly authoritarian and outright nasty, with fewer voices prepared to stand up for liberal values.

What I did on my holidays
Time off has been virtually non-existent, but I am reading A Wilderness of Mirrors by Mark Meynell (about loss of trust in politics, the media and just about everything). I’m also obsessively listening to Wildflower by the Avalanches, their second album, 16 years after their first. It’s outstanding – almost 60 minutes of intelligently crafted dialogue, samples and epic production.

During the political maelstrom, I have been thinking back to the idyllic few days I spent over half-term on the Scottish island of Colonsay: swimming in the sea with the kids (very cold but strangely exhilarating after a decent jog), running and walking. An added bonus is that Colonsay is the smallest island in the world to have its own brewery. I can now heartily recommend it.

Preparing for the next fight
The odds are weirdly long on an early general election, but I refuse to be complacent – and not merely because the bookies were so wrong about Brexit. If we have learned one truth about Theresa May as Prime Minister so far, it is that she is utterly ruthless. After her savage cabinet sackings, this is, in effect, a new government. She has refused to go to the country, even though she lectured Gordon Brown on the need to gain the endorsement of the electorate when he replaced Tony Blair. Perhaps she doesn’t care much about legitimacy, but she cares about power.

You can be sure that she will be keeping half an eye on Labour’s leadership election. With Jeremy Corbyn potentially reconfirmed as leader in September against the wishes of three-quarters of his MPs, Mrs May might conclude that she will never have a better chance to increase her narrow majority. Throw in the possibility that the economy worsens next year as Brexit starts to bite, and I rule nothing out.

So, we are already selecting candidates. It is vital that they dig in early. As we are the only party prepared to make the positive case for Europe, such an election would present us with an amazing opportunity.

Sitting Priti
David Cameron pledged to take an unspecified number of unaccompanied children from camps across the Continent. I am putting pressure on Theresa May to turn that vague commitment into a proper plan. Having visited such camps, I have been fighting for Britain to give sanctuary to a minimum of 3,000 unaccompanied children, who are currently open to the worst kinds of exploitation. We have heard nothing but silence from the government, with underfunded councils reporting that they are not receiving the help they need from Whitehall.

Meanwhile, it remains government policy to send refugees to Turkey – whose increasingly authoritarian government has just suspended human rights protection.

As if all of this were not grim enough, we have a new Secretary of State for International Development, Priti Patel, who has said that she thinks aid should be used largely to promote trade. As someone who wants our country to be respected around the world, I find this plain embarrassing. Actually, it’s worse. It’s shaming. As with Europe, so with the world: the Conservative government is hauling up the drawbridge just when we need more than ever to engage with people beyond our shores.

 

Lines of Dissent: Tanya Gold on Sir Philip Green.

Tanya Gold observes that although Philip Green (aka “Sir Shifty”), the former owner of British Home Stores, may eventually fall in disgrace, Britain’s ridiculous honours system will endure:

It is said that he could lose his knighthood, because that would be exciting and pointless. If so, I hope the ceremony features the formal rending of a garment from the BHS sale bin – perhaps a torn sock will be flung at his head? The Queen will not be happy, because de-knighting makes the ancient system of patronage look as ridiculous as it really is. Do intercessors between man and God make mistakes? Would they raise a man the Daily Mail now calls “Sir Shifty”? (I checked whether there was a Sir Shifty among the knights of the Round Table who flogged the Holy Grail to a passing tinker. There was not.)

Lord Melbourne advised Queen Victoria not to attempt to make her husband, Albert, a king, for if the people knew that they could make kings, they might unmake them. Green will discover this in his tiny way. But the elites should not hide their baubles. One fallen knight will not destroy the system (and I cannot think that Green will take £571m from his [family yacht] Lionheart cushion budget to save his knighthood by replenishing the BHS pension fund, because a knighthood is, in essence, just a tiny Bentley Continental that you wear over your nipple). One fallen knight should destroy the system but it won’t, because human conceit and docility are without end. Green will be shunned. Nothing will change.

 

Deborah Levy on The Age of Bowie.

Deborah Levy, today longlisted for the 2016 Man Booker Prize, finds herself transported to the 1970s of her youth by Paul Morley’s new biography of David Bowie:

The starman stepped into my imagination and history – via Top of the Pops – when I was 13, and never left the building. It seemed right that when I was 50, Bowie asked the question I was asking myself, too: where are we now? I can’t think of a contemporary writer whom I have followed from teenage to middle age, and so, with all the humility, desire and delusion of being a fan, I am not going to take well to any biographer who claims to have a purchase on the “real” Bowie. I don’t want real. Nor do I need the enigma of Bowie’s various personae (beguiling and baffling in equal measure) to be nailed to Earth. And just to confirm how hard I am to get in this respect, I am also not that interested in personal anecdotes from people who knew him. No, I’m with the teenagers of my generation who had Saturday jobs at Dolcis and C&A so we could buy his albums. We did not have trust funds to put together an outfit, but we did make an effort to sparkle for the starman – just in case he landed somewhere that wasn’t inside our heads.

Fortunately, Paul Morley is a veteran rock journalist (I’m sure he can show you the scars) and has not attempted to write a calmly objective, sensible biography that manages to shatter the delusion and give us the man. His stream-of-consciousness critique of Bowie’s posthumous legacy from cradle to Blackstar is respectfully mournful, and slightly rhapsodic in tone. He understands that Bowie lifted many of his now orphaned fans “from suburbia to bohemia” (sort of) and opened up an imaginative space that was inside us anyway. If the writing can’t resist sliding into the sentimental, it’s also a bit mental, which is perfect.

Morley rightly points out how “those of us becoming teenagers in the early Seventies needed something of our own, having been too young to catch the Sixties. We’d missed the Beatles, we’d missed the Stones – as something that belonged and spoke directly to us.” At times he does that slightly creepy thing of speaking Bowie’s inner thoughts as a way of moving through the various decades, but it is tricky to pull this story through 1947 to 2016. Here is 1972: “. . . he is saying, the starman is saying, because he looks exactly like a starman, sexy but sexless, friend but alien: let everyone lost in a world of confusion and imminent devastation have a party.”

I was probably too young to think about the “devastation” (apart from Dad throwing away my silver platform boots) but the “party” was definitely an invitation to subvert the rigid femininities and masculinities that so pinned us boys and girls down in the early Seventies.

 

Critic at Large: Kate Mossman on Trans-Siberian Orchestra.

The NS’s pop critic, Kate Mossman, travels to Florida to meet Paul O’Neill, the eccentric, multimillionaire creator of Trans-Siberian Orchestra (TSO):

He calls it “whacking”. It began near his property on 12th Street, Manhattan. He’d get his driver to circle Union Square while he identified a suitable beggar; then he’d jump out, shove a hundred-dollar bill into their hand, jump back in and drive off. Soon, he realised that many of the people he was giving to were schizophrenic and he was scaring them out of their wits. So he started passing the money to his daughter because, he reasoned, they were more likely to accept it from a three-year-old girl. He gradually increased the amount he gave – from a hundred to ten, twenty, thirty thousand dollars in a roll of notes. Paul O’Neill and his daughter would drive around the square and she’d say: “Let’s whack ’em, Dad, let’s whack ’em hard.”

****

One of the biggest bands on the planet remains unknown to much of the world. Trans-Siberian Orchestra (TSO) have spent much of the past decade on Billboard’s annual list of top music moneymakers; they now play to a million people a year and have grossed over $500m in concert revenues since they were founded 20 years ago. In 2014 they made almost $52m in 52 days. They tour for seven weeks only, from November to January. To maximise profits, they split into two halves – one band for the west coast of America and the other for the east – and play matinees as well as evening shows.

Their genre? Heavy metal Christmas music. TSO are a glittering chorus line of rock chicks and axe heroes in black tie and tails, suspended on wires or balancing high above the stage on hydraulic platforms playing rock’n’roll mash-ups of “Deck the Halls” and “Dance of the Sugar Plum Fairy”. There are 18 people on stage, 240 staff and 40 trucks to transport them. The show, which looks like Pink Floyd-meets-Meat Loaf’s Bat Out of Hell, employs 18 lasers and 750 pyrotechnics. The band travels with two trailers of generators: they once blew out the electricity grid in Jackson, Mississippi.

TSO’s creator, O’Neill, divides his time between New York City and Florida, where the band began. I speak to someone at a UK rock magazine who once had a phone call with him. “Just don’t get him on to Churchill,” he says.

The Morrisound Recording studio in north Tampa was once the nerve centre of Florida’s legendary metal scene, playing host to many of the genre’s nastiest acts, including Sepultura, Cannibal Corpse and Napalm Death. Like most luxury recording spaces, it hit hard times in the past decade; then, in 2015, TSO bought it and turned it into their headquarters, Night Castle. It lies behind high gates and is staffed by polite young engineers with russet beards. Visitors are met with a large food centre stocked with six different kinds of mineral water and a pine-fresh smell not typical of the recording studios of the past.

O’Neill has taken on a slightly mythical status within TSO. The official photographer tells me that you rarely see him because he is “so protected”. When in Tampa, he is accompanied by a 6ft 4in driver-cum-security guard with the physique of a wrestler, whose name is Tracey.

 

Hunter Davies on 1966 and all that.

The NS’s longest-running columnist and football correspondent, Hunter Davies, remembers the year of World Cup glory and top-notch music by the Beatles:

Fifty years ago this Saturday, on 30 July 1966, I was at Wembley. I have my ticket and my programme to prove it. I also have my 1966 diary, which I am looking at now. I was 30, weighed ten stone and eight pounds, and my waist was 32 inches – about as hard to believe now as England winning another World Cup final.

I am still in the same house, all these decades later, but my telephone number then was GUL 4685. GUL was short for Gulliver, I can’t remember why. In my list of contacts at the end of my diary is Melvyn Bragg, who was another recent arrival in London from Cumbria, like myself and my wife, on PRO 0790. PRO stood for Prospect, I think, which was the exchange name for somewhere over the river, possibly Kew.

My office number was TER 1234. I always thought that was a great and memorable number. It’s only now, thinking about it, that I realise that TER – meaning Terminus – probably related to King’s Cross, which the Sunday Times was near in those days.

At the top of the charts in July 1966 were the Kinks with “Sunny Afternoon”, which I can well remember, as it was so ironically chirpy, and Georgie Fame with “Getaway”. I liked Georgie Fame – low-key, cool – but I can’t remember that tune. Both were replaced in August by the Beatles’ “Yellow Submarine”/“Eleanor Rigby”.

[. . .]

In 1966, two big events occurred in my personal life. In May that year, my son, Jake, was born – at home, in what is now our kitchen. He arrived so quickly that the midwife hadn’t turned up yet and he emerged with the cord twisted around his neck. I managed to untie it, which I have maintained since kept him alive (a trick I had learned at fathers’ classes).

Fathers’ classes – wow, what a novelty that was in the 1960s. Who says we were all chauvinist pigs back then? (Today’s young, female star writers at the New Statesman, probably.) I attended my first ones, at the Royal Free Hospital in 1964, when our firstborn, Caitlin, was about to arrive. I remember immediately thinking when the invite came that I would get 1,000 words out of this – which I did, for the Sunday Times women’s pages.

Also at those first-ever fathers’ classes at the Royal Free was a young BBC producer whose wife was also about to give birth: Wilfred De’Ath. He, too, was desperate to get a piece out of it. (He now writes occasionally for the Oldie, and he appears to be down and out and living in France.)

After Jake’s birth, I got the midwife to give me the placenta and I ate it, fried with onions. Tasted like liver. Another 1,000 words.

The other event of note in my ever-so-exciting life in 1966 was meeting Paul McCartney. When “Eleanor Rigby” came out, I thought the words – not just the tune – were so wonderful. Possibly the best poetry of the year, I said, as if I knew anything about poetry. I went to see him for [the Sunday Times column] Atticus in his new house in St John’s Wood, which he still has, being a very conservative feller. I talked to him about the background to the lyrics, as opposed to his hair, which interviewers were still asking him about.

A few months later, at the end of 1966, I went to see him again, wearing a different cap, as a screenwriter. I’d had a novel published the previous year, Here We Go Round the Mulberry Bush, which was being made into a film, with Clive Donner directing. We went to see Paul at his house and discussed with him if he would do the theme tune. He turned us down in the end but it was while I was with him that I suggested that there should be a proper biography of the Beatles. He said Brian (Epstein, the band’s manager) would have to agree – and there and then sat me down and helped me write a suitable arse-licking letter to him.

I eventually saw Brian, after several cancellations, at his home in Belgravia and he played me the acetate of “Strawberry Fields Forever”. I was astounded. It seemed to break every rule of what was then considered pop music. I wondered if all Beatles fans would take to it. But I could see that it was amazing and perhaps the Beatles weren’t finished, which was what some people were saying in 1966. At my publisher, Heinemann, which paid me £3,000 for the book, there was one director who maintained the Beatles bubble was about to burst.

Brian agreed to my project and offered a clause in the contract that we had not requested or even thought of. He said he would not give any other writer access to the Beatles for two years after my book came out. This was 1966. The book came out in 1968. Two years later, in 1970, the Beatles were no more. Without realising it at the time, I became the only authorised biographer of the Beatles.

So, 1966, a big year for me, so glad I kept that diary, and also a big year for the nation. I thought at the time that the Beatles were bound to fade, eventually, while England surely would dominate world football from now on. After their humbling by Iceland at this year’s World Cup, I now realise that England will never win the World Cup again in my life, what’s left of it. And probably not even another game.

The only way to rationalise it is to tell ourselves that we are ahead of the game. We are rubbish, but in turn it will happen to all the other so-called advanced nations.

You could say Brexit is a bit like that. We are ahead of the other leading European nations in going it alone, even though it is depressing and awful and shameful. We are advanced in wilfully turning ourselves into a rubbish nation. We are leading the way, as ever. Inger-land, Inger-land.

 

Plus

Photo essay: The Gentle Author introduces portraits of the East End.

Peter Wilby on BHS, MI5 and BMWs.

View from Germany: Philip Maughan finds himself living in Berlin post-Brexit without a job or a plan.

Ed Smith on why so many women still feel excluded
from mainstream sport.

Puffins in peril: Mark Cocker on why Britain’s best-loved seabird
is at risk of global extinction.

Yo Zushi finds there’s more to boxing than mere violence.

Newsmaker: Joji Sakurai profiles Virginia Raggi, the first ever
female mayor of Rome.

Amelia Tait tracks the Pokémon Go phenomenon.

Inna Lazereva meets African refugees competing in the Rio Olympics.

Ben Myers reads an eccentric manual for writers – Release the Bats: Writing Your Way Out of It by D B C Pierre.

Simon Barnes on a history of the tarnished Olympics:
The Games by David Goldblatt.

Kate Mossman meets the man behind one of the world’s
wealthiest (and most eccentric) rock bands.

Richard Mabey re-examines the legacy of Capability Brown.

Helen Lewis sees the magic in Harry Potter and the Cursed Child.

Film: Ryan Gilbey watches Finding Dory and Jason Bourne.

Television: Rachel Cooke wonders whether Julien Temple planned a stitch-up of Keith Richards in The Origin of the Species.

          For more press information, please contact Anya Matthews: anya.matthews@newstatesman.co.uk / 020 7936 4029 / 07815 634 396.