According to reports in the media, Tony Blair is supplementing his pitiful 7-figure income by charging punters £180 to get their picture takem with him. One of Blair's entourage claims that Blair is worshipped in America -- they see him as "a cross between Churchill, the Queen and Margaret Thatcher".
So he's a depressive, boozy fascist who thinks he has a divine right to rule? Wish we'd been told that when he was running for office.
Sunday 27 September 2009
Hypocrisy to the Max
There's no way Baroness Scotland should be allowed to keep her job as Attorney General after admitting that she employed an illegal immigrant. It would be like Alastair Darling remaining as Chancellor after being convicted of robbing a bank.
Still, there's no excuse for the double standards evident in some of the media reportage. I'm thinking in particular of the Mail on Sunday, which has today published said immigrant's account of the affair. Reportedly, the MoS paid up to £100,000 for the exclusive rights to the story, with the usual 25% cut going to the oleaginous Max Clifford. On what basis is it verboten for Baroness Scotland to pay an illegal immigrant for services rendered, but perfectly OK for the Mail on Sunday to do the same thing?
Still, there's no excuse for the double standards evident in some of the media reportage. I'm thinking in particular of the Mail on Sunday, which has today published said immigrant's account of the affair. Reportedly, the MoS paid up to £100,000 for the exclusive rights to the story, with the usual 25% cut going to the oleaginous Max Clifford. On what basis is it verboten for Baroness Scotland to pay an illegal immigrant for services rendered, but perfectly OK for the Mail on Sunday to do the same thing?
Friday 25 September 2009
Darling shreds Fred
This week's final episode of "The Love of Money", the BBC's excellent series on the credit crunch, focused primarily on the role played by politicians and public servants in trying to deal with the crisis. So we heard from the likes of Gordon Brown, President "Lula" of Brazil and the Icelandic Finance Minister -- though interestingly, not from Hank Paulson, who "declined to speak on camera".
Each of the programmes in this series has provided fresh insights. This week's came from Alastair Darling, who revealed some of what happened when the British Government met with senior bankers to figure out how the Government could inject capital into the more vulnerable institutions. According to Darling, RBS boss Sir Fred Goodwin kept insisting, to the utter disbelief of both his competitors and the politicians, that his bank didn't have a capital problem, it just had a liquidity problem.
Recounting this one year on, Darling delivered one of the most withering putdowns I've ever heard from any politician: "The first line of defence is having people in the boardroom who know what's going on in their own business". Even the unrepentant Sir Fred, if he was tuned in at home in Edinburgh, must have crawled behind the sofa when he heard that.
There's no way of knowing whether Darling thought that one up himself, or whether one of his speechwriters came up with it -- in which case, give that man or woman a raise! However, you have to hope that the Government and regulators see that it's more than just brilliant zinger: it's also a truth that needs to be kept in mind as new rules for the financial sector are drawn up. Banks aren't charities. They didn't and don't pay big bonuses out of the goodness of their hearts. They pay them because they believe they are making lots of money, and will continue to do so if they retain the big producers. The role of the "people in the boardroom" and of senior management is to ask how the money is being made. Did anyone on the board at Northern Rock question how it came to pass that a sleepy regional building society was providing more than a fifth of the new mortgage loans in the UK? Did the board at RBS try to stop Sir Fred from taking over ABN Amro at a silly price right before the crash?
Attacking the bonus culture is easy and fun, but it's only a symptom. Putting some steel into the spine of bank directors and senior management is difficult. As a minimum, it requires tighter capital requirements and more intrusive regulation. The G20 seems to be moving in that direction -- but the bankers, amazingly enough, seem likely to put up a fierce resistsnce.
Each of the programmes in this series has provided fresh insights. This week's came from Alastair Darling, who revealed some of what happened when the British Government met with senior bankers to figure out how the Government could inject capital into the more vulnerable institutions. According to Darling, RBS boss Sir Fred Goodwin kept insisting, to the utter disbelief of both his competitors and the politicians, that his bank didn't have a capital problem, it just had a liquidity problem.
Recounting this one year on, Darling delivered one of the most withering putdowns I've ever heard from any politician: "The first line of defence is having people in the boardroom who know what's going on in their own business". Even the unrepentant Sir Fred, if he was tuned in at home in Edinburgh, must have crawled behind the sofa when he heard that.
There's no way of knowing whether Darling thought that one up himself, or whether one of his speechwriters came up with it -- in which case, give that man or woman a raise! However, you have to hope that the Government and regulators see that it's more than just brilliant zinger: it's also a truth that needs to be kept in mind as new rules for the financial sector are drawn up. Banks aren't charities. They didn't and don't pay big bonuses out of the goodness of their hearts. They pay them because they believe they are making lots of money, and will continue to do so if they retain the big producers. The role of the "people in the boardroom" and of senior management is to ask how the money is being made. Did anyone on the board at Northern Rock question how it came to pass that a sleepy regional building society was providing more than a fifth of the new mortgage loans in the UK? Did the board at RBS try to stop Sir Fred from taking over ABN Amro at a silly price right before the crash?
Attacking the bonus culture is easy and fun, but it's only a symptom. Putting some steel into the spine of bank directors and senior management is difficult. As a minimum, it requires tighter capital requirements and more intrusive regulation. The G20 seems to be moving in that direction -- but the bankers, amazingly enough, seem likely to put up a fierce resistsnce.
Monday 21 September 2009
Learned nothing and forgotten nothing
I haven't taken a pop at Anatole Kaletsky for a while, but his piece in today's Times, titled "Economic policymakers should sit tight until 2011", is just too imbecilic to resist.
Kaletsky starts by repeating his surely discredited argument that the credit crisis only became a serious problem when the US allowed Lehman Brothers to collapse. Yes, it's still all Hank Paulson's fault: "It was Mr Paulson’s testimony before the Senate on September 23, to explain what he would do with this money, that turned the crisis into a previously unimaginable nightmare, by revealing that the man supposedly in charge of the world’s most important economy literally did not know what he was talking about". Well, Anatole certainly knows how it feels not to know what you're talking about.
Personally, I don't remember feeling all that comfortable about the crisis right up until the point where Lehman went under, as Kaletsky now claims he did. Neither do most other media commentators. For example, Jeremy Warner over at the Telegraph took issue with the "blame Hank" approach just a couple of weeks ago. As he, and I, and just about everyone else now sees it, if it hadn't been Lehman, it would almost certainly have been someone else. (Probably Merrill Lynch, but for John Thain's shameless scuppering of Bank of America's planned rescue of Lehman: see my previous posting).
That's all history now, of course. Much more disturbing is Kaletsky's prescription for the future: expansionary fiscal policy at least until 2011, and lax monetary policy basically for an indefinite period. Scary quote: "The low interest rate policy adopted by Alan Greenspan to support the US economy after 9/11 and the dot-com crash is now being implemented by the world as a whole. The probable result is that asset prices will again rise rapidly and financial activity will accelerate..."
Rejoice, saya Anatole. The whole world now enjoys the discredited monetary stance that got the US and the rest of us into so much trouble so recently. And even Kaletsky acknowledges that it will lead to the same outcome. Not a problem, though: "Booms and busts in asset prices are a natural feature of the capitalist system and the only way to prevent them would be either to paralyse the creativity of private enterprise or to keep the economy permanently depressed, with unemployment needlessly high". Anyway, Kaletsky knows the solution: "The real challenge for policymakers, therefore, is to find ways of channelling the next upsurge of financial activity into more constructive and sustainable investments than the last one". Phew, we're saved. Oh, hang on though: "But how exactly to design these improved regulations and better public-private partnerships is far from obvious".
It's hard to overstate how completely fatuous a piece Kaletsky has delivered here, especially since at the end of it he can't even come up with a concrete proposal. What's more, he's almost certainly wrong about the desirability of keeping rates low for a long period, and not just because of the risk of another asset price bubble. One of the more interesting pieces I've seen recently suggested that near-zero rates are directly contributing to the ongoing paralysis in the credit market. If you're a sound bank with lots of cash on hand, why would you lend it for almost no return to another bank that might still be facing credit problems? Better just to keep it in the vault. Even the most junior banker would understand that, but it's undoubtedly way beyond Kaletsky.
Kaletsky starts by repeating his surely discredited argument that the credit crisis only became a serious problem when the US allowed Lehman Brothers to collapse. Yes, it's still all Hank Paulson's fault: "It was Mr Paulson’s testimony before the Senate on September 23, to explain what he would do with this money, that turned the crisis into a previously unimaginable nightmare, by revealing that the man supposedly in charge of the world’s most important economy literally did not know what he was talking about". Well, Anatole certainly knows how it feels not to know what you're talking about.
Personally, I don't remember feeling all that comfortable about the crisis right up until the point where Lehman went under, as Kaletsky now claims he did. Neither do most other media commentators. For example, Jeremy Warner over at the Telegraph took issue with the "blame Hank" approach just a couple of weeks ago. As he, and I, and just about everyone else now sees it, if it hadn't been Lehman, it would almost certainly have been someone else. (Probably Merrill Lynch, but for John Thain's shameless scuppering of Bank of America's planned rescue of Lehman: see my previous posting).
That's all history now, of course. Much more disturbing is Kaletsky's prescription for the future: expansionary fiscal policy at least until 2011, and lax monetary policy basically for an indefinite period. Scary quote: "The low interest rate policy adopted by Alan Greenspan to support the US economy after 9/11 and the dot-com crash is now being implemented by the world as a whole. The probable result is that asset prices will again rise rapidly and financial activity will accelerate..."
Rejoice, saya Anatole. The whole world now enjoys the discredited monetary stance that got the US and the rest of us into so much trouble so recently. And even Kaletsky acknowledges that it will lead to the same outcome. Not a problem, though: "Booms and busts in asset prices are a natural feature of the capitalist system and the only way to prevent them would be either to paralyse the creativity of private enterprise or to keep the economy permanently depressed, with unemployment needlessly high". Anyway, Kaletsky knows the solution: "The real challenge for policymakers, therefore, is to find ways of channelling the next upsurge of financial activity into more constructive and sustainable investments than the last one". Phew, we're saved. Oh, hang on though: "But how exactly to design these improved regulations and better public-private partnerships is far from obvious".
It's hard to overstate how completely fatuous a piece Kaletsky has delivered here, especially since at the end of it he can't even come up with a concrete proposal. What's more, he's almost certainly wrong about the desirability of keeping rates low for a long period, and not just because of the risk of another asset price bubble. One of the more interesting pieces I've seen recently suggested that near-zero rates are directly contributing to the ongoing paralysis in the credit market. If you're a sound bank with lots of cash on hand, why would you lend it for almost no return to another bank that might still be facing credit problems? Better just to keep it in the vault. Even the most junior banker would understand that, but it's undoubtedly way beyond Kaletsky.
Friday 11 September 2009
Pulling the plug on Lehman
The BBC has been running some special programmes to mark the first anniversary of the collapse of Lehman Brothers. First it showed a fictionalised reconstruction of the events of that extraordinary weekend, then a documentary covering exactly the same period. When I saw this in the TV listings I thought it looked a bit strange, but the two complemented each other quite well. In some ways the fictional piece looked less phoney than the documentary, especially given the latter's hamfisted attempts to put the events into the context of a New York weekend. ("Across the city at Shea Stadium, the home town New York Mets are losing to Atlanta. It's a bad omen". No, I'm not making that up.)
Stylistic questions aside, the stories told in the two programmes were consistent. Much of what happened that weekend is well known now, but there was one element that I hadn't fully picked up on in the past. At the start of the weekend, the CEOs of the major New York financial institutions, minus Dick Fuld of Lehman Brothers, were summoned to meet with Treasury Secretary Hank Paulson at the New York Fed. Two firms, Bank of America and Barclays, were undertaking due diligence on Lehman's books at the time, but Paulson urged the other firms to take steps to ensure that the global financial system would not collapse when markets resumed activity after the weekend.
One of them certainly took action, though probably not the kind that Paulson had in mind. John Thain of Merrill Lynch quickly came to the conclusion that Lehman was going to go bankrupt, and that his own firm might be next. He left the meeting, went out into the street and called Ken Lewis, the CEO of Bank of America, offering a merger betweeen their two companies. Lewis promptly flew to New York, ended the due diligence review of Lehman and put together a deal with Merrill. When Barclays was unable to put together a deal for Lehman, the company's death was assured.
The voiceover of the documentary remarked that this certainly proved the old Wall Street axiom, "eat or be eaten". True, but my reaction was a bit different. Wasn't Thain in a position of conflict of interest? Having been taken into the Government's confidence, might it not have been illegal for him to torpedo the best deal available for Lehman with a view to saving his own company's skin? If Lehman had been through a merger with BofA, it's possible that the short sellers would have turned their baleful attentions on Merrill next; but it's also possible that the deal would have calmed the markets, leaving Merrill independent while saving investors a great deal of grief and taxpayers an immense amount of money.
You can never be certain with counterfactuals, of course. Still, if Hank Paulson saw the heads of the big banks scrambling to grab the best seats in the lifeboat for themselves, it's hard to blame him for refusing to throw them any more Government money.
Stylistic questions aside, the stories told in the two programmes were consistent. Much of what happened that weekend is well known now, but there was one element that I hadn't fully picked up on in the past. At the start of the weekend, the CEOs of the major New York financial institutions, minus Dick Fuld of Lehman Brothers, were summoned to meet with Treasury Secretary Hank Paulson at the New York Fed. Two firms, Bank of America and Barclays, were undertaking due diligence on Lehman's books at the time, but Paulson urged the other firms to take steps to ensure that the global financial system would not collapse when markets resumed activity after the weekend.
One of them certainly took action, though probably not the kind that Paulson had in mind. John Thain of Merrill Lynch quickly came to the conclusion that Lehman was going to go bankrupt, and that his own firm might be next. He left the meeting, went out into the street and called Ken Lewis, the CEO of Bank of America, offering a merger betweeen their two companies. Lewis promptly flew to New York, ended the due diligence review of Lehman and put together a deal with Merrill. When Barclays was unable to put together a deal for Lehman, the company's death was assured.
The voiceover of the documentary remarked that this certainly proved the old Wall Street axiom, "eat or be eaten". True, but my reaction was a bit different. Wasn't Thain in a position of conflict of interest? Having been taken into the Government's confidence, might it not have been illegal for him to torpedo the best deal available for Lehman with a view to saving his own company's skin? If Lehman had been through a merger with BofA, it's possible that the short sellers would have turned their baleful attentions on Merrill next; but it's also possible that the deal would have calmed the markets, leaving Merrill independent while saving investors a great deal of grief and taxpayers an immense amount of money.
You can never be certain with counterfactuals, of course. Still, if Hank Paulson saw the heads of the big banks scrambling to grab the best seats in the lifeboat for themselves, it's hard to blame him for refusing to throw them any more Government money.
Monday 7 September 2009
Bankers' bonuses and all that
For now, it looks as though the US and UK have seen off pressure from other G20 governments to impose stringent limits on bankers' compensation, especially bonuses. France is threatening to go it alone, but investment bankers in Paris are already threatening to move out, so it remains to be seen how tough the Sarkozy government will eventually be.
There still seems to be a visceral desire among the public and politicians alike to "do something" about the bonus culture in the financial sector. Given what we've been through in the past two years, this is understandable. However, bonuses were only a small part of what brought the financial system to its knees, and curbing them can only be a small part of the solution. I'm still far from sure of what needs to be done to strengthen the system, partly because there are so many parties to blame for what went wrong. For instance....
* Certain Central Banks (notably the Fed and the Bank of England) were far too willing to believe their own press releases about defeating inflation. Stability in consumer prices owed much more to the flood of cheap goods from Asia than to any new monetary paradigm. Lax monetary policies fostered both soaring asset prices and the explosive growth in financial institutions' balance sheets.
* Governments (the US and UK again in the van) were willing to turn a blind eye to the explosive growth in personal debt as long as it preserved the illusion of healthy growth in their economies.
* The public and the media showed no appetite for reining things in before the crisis hit. The debt-fuelled housing booms in the US, UK, Spain, Ireland and elsewhere were almost universally lauded as a "good thing" until the house of cards collapsed.
* Regulators entirely failed to understand the risks posed both by the growth in FIs' balance sheets and by the increasing complexity of the financial instruments that the banks were employing. In particular they underestimated the significance of growing reliance on wholesale funding and the resultant risk that the whole system could freeze up almost overnight.
* Ratings agencies threw around AAA ratings for new products like confetti while failing completely to understand the risks. No doubt many of the derivatives they were asked to opine on were complex, but some sort of macho unwillingness to admit that they simply didn't understand the products seems to have got in the way of proper due diligence. No banker, or at least no lender, would have been in any way surprised by the ineptitude of the ratings agencies, which has been repeatedly demonstrated over many decades. However, investors, even big ones who should have known much better, continued to rely on their opinions right up until the crisis hit.
Which brings us, finally, to the banks themselves. Take lax regulation, complacent-to-irresponsible monetary policy, debt-happy governments and citizens, and add smart, greedy, Type-A financiers, and what other outcome could you possibly expect? I'm not sure it's correct to assert that none of the banks could see the problems building up; rather, I think there was something of a fallacy of composition. Each bank assumed that its own position was manageable, without considering the implications of the fact that every other major institution was facing a similar risk profile. Sure, there were some abuses going on: "guaranteed bonuses", upfront rewards for assumed long-term profits and such. But these were symptoms of the excesses throughout the financial system or indeed the whole economy, rather than the causes of the crisis.
So what does this all mean for attempts to curb bonuses? Well, it seems to me that if Governments can agree on better regulation (including higher capital requirements) and central banks can resist the temptation to play the good guy by keeping monetary policy excessively lax, then the excess or illusory profits that encouraged the payment of monster bonuses would largely disappear. You could throw in a few steps like restricting "guaranteed bonuses" and requiring bonus payouts to be spread over a longer period or tied to stock prices, though those would mainly be for the purpose of playing to the gallery of public opinion. It's just a matter of restoring common sense, boring as that may be. Sadly, however, that's been in such short supply over the past decade that I'm not optimistic that the G20 meeting in Pittsburgh at the end of the month will do anything worthwhile.
There still seems to be a visceral desire among the public and politicians alike to "do something" about the bonus culture in the financial sector. Given what we've been through in the past two years, this is understandable. However, bonuses were only a small part of what brought the financial system to its knees, and curbing them can only be a small part of the solution. I'm still far from sure of what needs to be done to strengthen the system, partly because there are so many parties to blame for what went wrong. For instance....
* Certain Central Banks (notably the Fed and the Bank of England) were far too willing to believe their own press releases about defeating inflation. Stability in consumer prices owed much more to the flood of cheap goods from Asia than to any new monetary paradigm. Lax monetary policies fostered both soaring asset prices and the explosive growth in financial institutions' balance sheets.
* Governments (the US and UK again in the van) were willing to turn a blind eye to the explosive growth in personal debt as long as it preserved the illusion of healthy growth in their economies.
* The public and the media showed no appetite for reining things in before the crisis hit. The debt-fuelled housing booms in the US, UK, Spain, Ireland and elsewhere were almost universally lauded as a "good thing" until the house of cards collapsed.
* Regulators entirely failed to understand the risks posed both by the growth in FIs' balance sheets and by the increasing complexity of the financial instruments that the banks were employing. In particular they underestimated the significance of growing reliance on wholesale funding and the resultant risk that the whole system could freeze up almost overnight.
* Ratings agencies threw around AAA ratings for new products like confetti while failing completely to understand the risks. No doubt many of the derivatives they were asked to opine on were complex, but some sort of macho unwillingness to admit that they simply didn't understand the products seems to have got in the way of proper due diligence. No banker, or at least no lender, would have been in any way surprised by the ineptitude of the ratings agencies, which has been repeatedly demonstrated over many decades. However, investors, even big ones who should have known much better, continued to rely on their opinions right up until the crisis hit.
Which brings us, finally, to the banks themselves. Take lax regulation, complacent-to-irresponsible monetary policy, debt-happy governments and citizens, and add smart, greedy, Type-A financiers, and what other outcome could you possibly expect? I'm not sure it's correct to assert that none of the banks could see the problems building up; rather, I think there was something of a fallacy of composition. Each bank assumed that its own position was manageable, without considering the implications of the fact that every other major institution was facing a similar risk profile. Sure, there were some abuses going on: "guaranteed bonuses", upfront rewards for assumed long-term profits and such. But these were symptoms of the excesses throughout the financial system or indeed the whole economy, rather than the causes of the crisis.
So what does this all mean for attempts to curb bonuses? Well, it seems to me that if Governments can agree on better regulation (including higher capital requirements) and central banks can resist the temptation to play the good guy by keeping monetary policy excessively lax, then the excess or illusory profits that encouraged the payment of monster bonuses would largely disappear. You could throw in a few steps like restricting "guaranteed bonuses" and requiring bonus payouts to be spread over a longer period or tied to stock prices, though those would mainly be for the purpose of playing to the gallery of public opinion. It's just a matter of restoring common sense, boring as that may be. Sadly, however, that's been in such short supply over the past decade that I'm not optimistic that the G20 meeting in Pittsburgh at the end of the month will do anything worthwhile.
We need a Libya "Czar" NOW!
The events surrounding the release of the Lockerbie bomber Abdelbaset al-Megrahi have underlined just how demoralised, unprincipled and chaotic the Brown Government has become. There was a very makeable case for releasing al-Megrahi, but Brown and his minions haven't attempted to make it. There was a case for keeping him in custody, but they haven't made that case either. Instead, with steadily dwindling credibility they've attempted to wash their hands of the whole matter by claiming it was a purely a decision of the Scottish government. Brown himself signed a letter to the Libyans some time ago saying that the Government did not want al-Megrahi to die in prison, yet today his Mini-me Ed Balls is claiming that Brown always opposed the release.
Now Brown has chosen to tie himself still further in knots, by announcing that the Foreign Office will provide dedicated help to victims of IRA violence who are trying to claim compensation from Libya -- this after the Government has stonewalled these same people for many years. (Jeremy Vine made the rather interesting point on Radio 2 today that it would make more sense to seek compensation from the United States, whose citizens paid for the Semtex used in the bombings, rather than from the Libyans, who simply supplied it). Tripoli has already repudiated any claims, and no doubt by raising the issue Brown has undone any good he thought he might have done in rebuilding UK-Libyan relations, without in any way assuaging opinion in the US.
Anyway, based on recent precedent we'll only know that Brown is taking the matter seriously when he appoints some TV personality or other to front up the operation. Could this be the real reason for Sir Terry Wogan's departure from his morning show?
Now Brown has chosen to tie himself still further in knots, by announcing that the Foreign Office will provide dedicated help to victims of IRA violence who are trying to claim compensation from Libya -- this after the Government has stonewalled these same people for many years. (Jeremy Vine made the rather interesting point on Radio 2 today that it would make more sense to seek compensation from the United States, whose citizens paid for the Semtex used in the bombings, rather than from the Libyans, who simply supplied it). Tripoli has already repudiated any claims, and no doubt by raising the issue Brown has undone any good he thought he might have done in rebuilding UK-Libyan relations, without in any way assuaging opinion in the US.
Anyway, based on recent precedent we'll only know that Brown is taking the matter seriously when he appoints some TV personality or other to front up the operation. Could this be the real reason for Sir Terry Wogan's departure from his morning show?
Thursday 3 September 2009
Here comes the "neverendum"
It's not al-Megrahi, all the time at the Scottish Parliament. The SNP government has announced its legislative programme for the coming session, and it includes a bill to hold a referendum on Scottish independence in 2010. First Minister Alex Salmond said it was time for the voice of the people of Scotland to be heard.
Since the three opposition parties at Holyrood outnumber the SNP, the referendum bill may not pass. However, it would be politically risky for the Tories, SNP and Labour to oppose it -- "what are they so afraid of?", as Salmond would undoubtedly ask. If there is a referendum, opinion polls suggest it will fail to deliver a majority for outright independence. Back in the days of the Quebec referenda in Canada, a Quebec comedian said that what Quebecers wanted was "a free, independent Quebec in a strong, united Canada". It was a joke, but it captured the ambivalent feelings of a majority of Quebecers. I suspect a large proportion of the Scottish electorate feels the same way.
There's a good possibility that the SNP will try to boost support by asking a vague and unthreatening question, though the Quebec precedent argues against that. The question in the first Quebec referendum (in the 1980s) offered something called "sovereignty-association" rather than outright independence, but this was heavily defeated. The question in the second referendum was much more straightforward -- and Quebecers came within one percentage point of voting to leave Canada.
So, the result of the vote is unpredictable, but here's one fearless forecast, again based on what happened in Quebec. If "the voice of the people of Scotland" favours independence by even the smallest of margins, Alex Salmond et al will regard it as "history's irrevocable verdict" or something such and will push for early independence talks. If the vote goes against them, they'll immediately start planning to ask the question again.
Since the three opposition parties at Holyrood outnumber the SNP, the referendum bill may not pass. However, it would be politically risky for the Tories, SNP and Labour to oppose it -- "what are they so afraid of?", as Salmond would undoubtedly ask. If there is a referendum, opinion polls suggest it will fail to deliver a majority for outright independence. Back in the days of the Quebec referenda in Canada, a Quebec comedian said that what Quebecers wanted was "a free, independent Quebec in a strong, united Canada". It was a joke, but it captured the ambivalent feelings of a majority of Quebecers. I suspect a large proportion of the Scottish electorate feels the same way.
There's a good possibility that the SNP will try to boost support by asking a vague and unthreatening question, though the Quebec precedent argues against that. The question in the first Quebec referendum (in the 1980s) offered something called "sovereignty-association" rather than outright independence, but this was heavily defeated. The question in the second referendum was much more straightforward -- and Quebecers came within one percentage point of voting to leave Canada.
So, the result of the vote is unpredictable, but here's one fearless forecast, again based on what happened in Quebec. If "the voice of the people of Scotland" favours independence by even the smallest of margins, Alex Salmond et al will regard it as "history's irrevocable verdict" or something such and will push for early independence talks. If the vote goes against them, they'll immediately start planning to ask the question again.
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