The fragments of empire that would survive by turning themselves into tax havens.

The Sunday papers are as you would expect full of the latest Allen Stanford stories.

The Independent leads the way with allegations that

More than 20 years ago, the authorities repeatedly probed Allen Stanford’s alleged links to some of the world’s biggest and most powerful drug lords. Despite no fewer than five investigations into suspected drug money laundering by law enforcers ranging from Scotland Yard to the FBI, no charges were ever brought.

The Times reports that

Investigators examining Sir Allen Stanford’s offshore bank say that $8 billion of investors’ money has disappeared.

adding that

Official receivers for Stanford International Bank appointed by the Antigua government have told customers that they suspect the bank was a “Ponzi scheme”, where depositors’ returns are paid from money obtained from new investors.

The Observer devotes a double page spread to the famous faces that fooled the Stanford clients

Stanford Financial Group (SFG) used at least four royals in its glossy publicity brochures, magazines and websites to emphasise the tycoon's respectability - at a time when difficult questions were being asked about how his operations made money.

Whilst writing in the paper Nick Cohen in an article entitled the sordid legacy of the end of empire points at the legacy of independence

These were tiny colonies "set adrift, part of the jetsam of an empire," he wrote. How were they going to make a living? The Foreign and Commonwealth Office in London replied with a disgraceful answer .The fragments of empire, those little specks of land with apparently no viable future, would survive by turning themselves into tax havens.

The Telegraph look at his home town Mexia and asks how a town of just 10,000 people, should throw up two larger-than-life characters: Anna Nicole Smith and Sir Allen Stanford.

Time to join the euro

10 years ago,the Euro was born.

It came in for immense criticism and some pundits felt that that the concept would not survive.

So is it the right time to join?

The arguments against have alwyas been fundementally ones of national pride,not wanting to lose the pound and worries about the inherent weakness of the concept.

2008 may have destroyed the latter argument.Today the euro vies for world supremecy with the dollar and stands at near parity with sterling

Writing in the Times this morning,Oliver Kamm suggests that the time may be right.

It is time for a reckoning. There have been economic stresses and political controversies in the eurozone, but the euro has plainly been a success. It now outstrips the dollar in the value of notes in circulation. It has established itself as the alternative international reserve currency to the dollar. Countries within the eurozone have survived the financial crisis in much better shape than, say, Iceland or Hungary

he says and argues that

The euro has worked. It has broadened and deepened European financial markets, reducing the cost of capital for business. It has achieved reserve currency status because investors have confidence in its future stability.

The barriers to joining are now largely political and this is shown by William Hague's piece in this morning's Mail.

Hague famously entered the 2001 election telling voters that voting Conservative was the last chance for the country to save the pound.It wasn't as Gordon Brown was never the convert that Tony Blair was to integration.

Hague argues that

When you think about it the idea of abandoning your currency when it has lost a lot of its value is a pretty stupid one: rather like thinking that if you have let your house run down in value until it is the same as a smaller one next door, it is a good time to swap.

and uses the argument that a common interest rate across the continnt would harm Britain

British families have many more of their mortgages in floating interest rates than people on the continent; we have a much bigger financial services sector, and more of our trade and investments are denominated in U.S. dollars.
All of these factors mean that the right level of interest rates set for people in Greece, Germany or Italy is not necessarily the right one for us.

Returning though to Kamm he says that

It used to be argued that the greater importance of the financial services sector to the UK economy made euro membership unsuitable for us. Surely no one can now maintain that a common European approach to banking supervision and capital adequacy is a threat. The weaknesses of the UK financial system are glaring and need to be remedied. If the UK were in the euro, then it could advance effective European regulation, while opposing impractical schemes that would simply distort markets.

How debt will take over the political landscape

A timely leader in the Times this morning,if you will excuse the pun.

As the government is poised to take Bradford and Bingley into public ownership,it argues that The issue of debt will now dominate political debate

It argues on two fronts,firstly that

by getting a poor return on its public spending, the Government has avoidably taken public finances into the red. From its recent low of 29.6 per cent in 2002, debt as a proportion of GDP has risen steadily. In August of this year it stood at 43.3 per cent. This parlous financial position is a direct political legacy. A government of genuine prudence might have put money in the bank at the top of the cycle to pay the bills at the bottom. But it would then have been unable to argue that the Conservative plans to cut taxes would require cuts in public spending. The dividing line of investment versus cuts - on which the Government has fought the last two elections - does not work if there are funds in the bank.

and secondly

an expansion based on excessive household credit has gone predictably awry. At the same time as the public finances have been deteriorating, household debt has been rising. The value of Britain's personal debt - £1.35 trillion - is now greater than the value of its gross domestic product. The main reason, of course, is that a house in Britain is not a home: it is an investment. The ratio of household debt to post-tax income is now three times greater than 25 years ago.

A safe pair of hands

John McCain is a gambler by nature, and the bet he placed Wednesday may be among the biggest of his political life.

says Dan Balz writing in this morning's Washington Post.

The Republican presidential nominee is hoping that his abrupt decision to suspend campaigning, seek a delay of Friday's debate with Democrat Barack Obama, and return to Washington to help prod negotiations over a financial rescue package will be seen as the kind of country-first, bipartisan leadership he believes Americans want.

And a gamble it certainly is,after all one of these two candidates will be in charge of trying to control this financial gamble in 40 days time.

The Obama camp has alreday rejected the proposal to postpone the debate but he like McCain will be going to the White House for talks and discussions with George Bush.

But as Michael Cooper says in the New York Times for both of them

The new role is a risky one .It puts them directly on the line over an issue whose politics are mutating almost by the hour, forcing them to balance a sense that the country is angry about the prospect of being stuck with the bill for Wall Street’s excesses against a chance that failure to act quickly could have dire economic consequences.

Interestingly since the financial meltdown began,McCain has begun to slip down the polls

Karl Rove writing in the WSJ says that

the first debate is the most important of all, establishing an arc of opinion that persists unless jarred loose by big mistakes or dramatic events.
So whether this year's first presidential debate between Sens. Barack Obama and John McCain is Friday night or postponed a few days, it may be the fall's most critical event. In the nine first debates since 1960, the perceived winner of the debate averaged a 4.2 point net swing in the Gallup poll.

Quite what that opinion will be if McCain does not appear is unclear but with the Palin effect wearing off rapidly,surely he must engage in debate with Obama over the safest pair of hands on the American political rudder?

What next for the Equitable Life savers?

Who is to blame for the debacle at Equitable Life?

The report out this morning says that the taxpayer will have to pick up the pieces after the faailure of the regulatory system.

For the record,more than a million policyholders lost an estimated £4b.

The Chancellor will not respond until the autumn but comments from that the case showed some similarities to Northern Rock will set alarms bells ringing in the Treasury.To be fair to the government the report shows that this misdemenours also pre date 1997 and in some cases back to 1982.

The 2,800 page report prepared by the parliamentary ombudsman Ann Abrahams

found evidence of "serial regulatory failure" by the government departments and watchdogs that were supposed to be protecting the insurer's customers. She identified 10 instances of maladministration in the period leading up to December 2001, called on the government to apologise to policyholders for the "injustice" they had suffered and recommended that ministers set up a compensation scheme

John Redwood is quick off the mark in calling for the government to intervene,noting that

When I was the regulatory Minister for Insurance and much of the City in the days when that post was held in the DTI, I received reports on the failure of Barlow Clowes. As soon as I read them I saw how people had suffered, and did not hesitate to compensate once regulatory failure had been established.
I want this government to do the same in this case. Many MPs have been pressing this cause with the government on behalf of constituents. Now the Ombudsman is so strong and clear, what further excuse could there be for delay?