BBC BLOGS - Peston's Picks
IN ASSOCIATION WITH
« Previous | Main | Next »

Soros: 'bleak outlook for UK'

Robert Peston | 10:58 UK time, Thursday, 28 January 2010

George Soros, the hedge-fund billionaire who made a fortune from speculating on sterling's weakness in the early 1990s, has warned that the outlook for the UK economy is "bleak." Click here for a transcript of the interview

George SorosIn an interview with me this morning, he warned that growth prospects for the UK and US were poor -- because households and governments in both countries had borrowed far too much and would have to repay their debts in coming years.

Soros said that the prospects for the UK were worse than the US, because the British government is approaching the limits of what it can comfortably borrow from investors to finance public spending.

He added - which will not come as a surprise to readers of this column - that the sources of the UK's financial weakness were excessive borrowing by individuals for house purchases and a financial sector that had also borrowed and lent too much.

Mr Soros - who was one of the few financiers to predict the 2008 financial crash - says that the UK and the US face many years of low growth.

Citing Japan's fifteen years of recession that started in the early 1990s, he said that the return of normal economic conditions in the US and UK was happening perhaps twice as fast as in Japan - which meant, he said, that anaemic growth may persist in America for up to seven years or so.

He said that the British government would have to tighten spending within the next year.

However he also warned that cutting public spending too soon could tip the UK back into recession.

In that sense he probably can't be seen as backing either the "cut-early" Tories or the "delay-cutting" Labour Party.

He also made a number of other fascinating observations:

1) he said China had a serious problem of incipient inflation and should allow its currency to appreciate;

2) while welcoming President Obama's proposal to limit the size of banks and limit their speculative activities, he said that the reforms did not go far enough;

3) he would insist that banks that engage in so-called proprietary trading - or speculating in financial markets for their own account - should hold as much capital as typical hedge funds, which would mean that the likes of Goldman Sachs would have to massively increase the capital they hold as a buffer against potential losses;

4) like President Sarkozy yesterday, he talked about the need for a new "Bretton Woods" - or a revised system of controls on exchange rates and capital flows that would phase out the dangerous imbalance between the excessive saving and reserves of China and Asia and the huge indebtedness of much of the west.

Comments

Page 1 of 2

  • Comment number 1.

    So Mr Soros would agree with Mr W Gross ?

    On that basis should Mr Timms waltz from the Treasury to the Foreign Office via the secret route ?

    I know my comment sounds a bit cryptic Mr Peston...but goodish authority tells me you'll understand.

  • Comment number 2.

    Robert, why do you give this man a platform to spread his opinions? His motives are only driven by his own self-interests? Would you trust a wolf to look after your flock of sheep?

    Where's your responsibility as a journalist?

  • Comment number 3.

    What a surprise - he says the UK economy is in sh*t street and our poiticians are in denial.

    Gosh!

  • Comment number 4.

    So George wins the prize for " stating the flipping obvious "

    Unfortunately, we have an election in the offing so, everything has been on hold here , thats whats holding us back, dithering.......

    Is our chancellor on holiday or something hes been very quiet ???

  • Comment number 5.

    Almost as interesting as the article content is the lack of responses/blog comments even though its been up for over an hour. Unusually quiet and worthy of a mention...a bit like the high street I suppose.

    And really thats the rub isnt it- this all seems a bit ephemeral, an academic argument about regulation vs free market- symptoms and cause, winners and losers. I don't think most people really care at the moment- they're too distracted by paying the bills, staying in their job. Business as usual for the banks, with the Davos crowd playing at poverty and restraint for the cameras, with the Champagne on ice in the background.

    Soros has a vested interest in tipping the market to move as he wants it too- so we have to be cautious with his comments- surely worthy of a passing mention in itself. Did you ask what positions he's holding? Notwithstanding that caveat I get the feeling that he's probably right- and that the public sector is in for a mighty storm shortly, at a time when the private sector can't really pick up the slack...

    Maybe everyone is too busy googling their next job to bother anymore RP?

  • Comment number 6.

    Robert,
    This is a 'bleak' message. I always thought that experts were employed to manage these things (economists, financiers etc.). Apparently not!
    So now we can look forward to a few more years of financial misery.

  • Comment number 7.

    Well done Mr Soros. Glad someone is talking sense. Let's hope the UK government takes your views seriously. But I won't hold my breath. All rather disheartening really......
    Oh, Andy Murray has just this minute reached the Australian final - so let's stay optimistic!

  • Comment number 8.

    Some very sensible ideas.

    While the Giant Vampire Squid Goldmans (and the other so called "investment" banks) would not wish it, the fact that an authoritative figure is now more obviously drawing the similarities between them and the hedgies is very instructive.

    Andy Haldane from the BoE, in that presentation 25th Sept last year to the Chicago Fed you quoted, is quite complimentary about the hedgies - supposedly in the doghouse, he says, but as it turns out the dogs that didn't bark.

    I think he mentioned that as well as much higher capital requirements, most of them had unlimited liability?

    Is this correct? Perhaps someone on this blog could clarify?

    If so, perhaps that should be introduced as well, just for those who go proprietary trading?

  • Comment number 9.

    "George Soros, the hedge-fund billionaire who made a fortune from speculating on sterling's weakness in the early 1990s, has warned that the outlook for the UK economy is "bleak."

    In an interview with me this morning, he warned that growth prospects for the UK and US were poor -- because households and governments in both countries had borrowed far too much and would have to repay their debts in coming years."


    How long before the UK is forced into the (relative) security of the Euro or pegging Stirling to another currency.

    "2) while welcoming President Obama's proposal to limit the size of banks and limit their speculative activities, he said that the reforms did not go far enough;

    3) he would insist that banks that engage in so-called proprietary trading - or speculating in financial markets for their own account - should hold as much capital as typical hedge funds, which would mean that the likes of Goldman Sachs would have to massively increase the capital they hold as a buffer against potential losses;"


    As you implied Robert, way-back in a blog near the start of the crisis when the UK governments intervention started and Keynesian economics seemed to be back in flavour - back to the 1970's (if not before) in banking borrowing terms, how long before public sector housing and renting become the norm again when people/builder simply can't get mortgages/loans and the only sector that can is government. How long before only existing companies will be able to borrow, new start-ups could well be the province of the self funding rich once again or the "Alan Sugar's" of the world, staring out with not much more than a "Man with a Van".

    Bleak indeed, and it may well be the older generation, who remembers such times, that will have to show the current young "never had it so good" generation the road ahead out of this mess - any chance of bringing some of the traditional old style bankers out of retirement?!...

  • Comment number 10.

    Yes he's got vested interests, but all the Politicians have too, and they are desperately spinning at the moment trying to convince you that all is well when it quite clearly isn't. I'd certainly lean more towards Soros' point of view than anyone in politics right now.

  • Comment number 11.

    I hereby award Soros the accolade "Master of the Bleeding Obvious".

    After a decade of public and private sector growth financed by expanding public and private debt (and raiding the pensions savings, and using PFI as a government variation on over-mortgaging), it will take a decade to pay the debt down again.

  • Comment number 12.

    The parallel with Japan is not that close, because the US economy and its debts are even larger than those that Japan had. There might well be downward pressure on the dollar, but if the Chinese let it go too far they would lose a lot of the value of their USD holdings.

    The obvious thing for the Chinese to do is to revalue their currency and to spend a lot of their US dollars before they lose too much value. This would help US and UK recovery.

  • Comment number 13.


    It's good to see Mr Soros can see the problems that many of us saw a full five years ago. Given his own self-interest in the matter I'm surprised he's given such a convenient platform to spread his views. After all, Mr Soros can move his wealth from country to country while I suspect most UK-based readers are not in a position to do likewise.

    So he gets to talk everything down and run away, while we get to deal with the consequences of it.

    But that said, is anyone really surprised that the UK is going to have major problems because of excessive borrowing? Labour's claim to sound management is to halve the deficit within four years, which still leaves us borrowing something like 200,000,000 pounds every single day.

    Did anyone in Westminster ever stop to think how the capital would be repaid? The rate we're going we won't be able to pay the interest before long.

  • Comment number 14.

    "He said that the British government would have to tighten spending within the next year.

    However he also warned that cutting public spending too soon could tip the UK back into recession.

    In that sense he probably can't be seen as backing either the "cut-early" Tories or the "delay-cutting" Labour Party."

    In fact, he can't really be seen as saying anything useful. Need to tighten public spending within the next year, but not too soon? How much? When? Why not be specific if he is so clever?

    As for the list of four fascinating observations - I've seen much more interesting comments here in response to your blog over recent months. If you find that fascinating I am sure I could paint a wall somewhere in my house and invite you round to watch it dry.

  • Comment number 15.

    Sensible stuff from Mr Soros...you wouldn't expect anything else.
    The sort of financial madness that afflicted Japan up to the 90s spread to the West....remember those Japanese multi-mortgages, basing the price of property on what you, your children and grandchildren could repay?...barmy.
    Our insistence on over-valueing assets based on what you could borrow was always going to bust.
    Asset bubbles are lethal....Mr Soros knows this, and he knows when to withdraw from dodgy situations....that's why he is so wealthy.
    The rest of us blunder along into "doomsday" situations, which can easily bankrupt us and our banks.
    We came close to a doomsday property market, but total collapse was avoided by mortgaging the entire wreck into the future, for the public to pay.
    We can't afford to do that again.
    The madness ends now.
    The rest of the world is getting richer, we must accept that, and not shackle ouselves by borrowing it all back off them and ending up in the brown stuff.
    But isn't that exactly the job of investment banks etc?
    Yes it is, but old-fashioned banking values need to return, or we will become the slaves of the rest of the world.
    (We are already all enslaved to the wreckage of the financial industry).
    The answer is hard-nosed common sense, in borrowing, lending and asset valuation.
    Financial common sense? ...didn't that die out in the 80s?

  • Comment number 16.

    Well as usual Soros is on the money as usual - would be interesting to hear his thoughts on the best way out of this hole. Yes he has a vested interest but so do we all to a greater or lesser extent and the politicians dont really appear to have a clue - god help us!

  • Comment number 17.

    George Soros:

    "...because households and governments in both countries had borrowed far too much and would have to repay their debts in coming years."

    I am unable to disagree with him. I don't think anybody could reasonably do so.

    The questions are:
    1. How do we get out of the hole?
    2. Will it make any difference how we get out of the hole?

    The one matter that is fairly certain is that we cannot simply continue digging. What this means is retrenchment, repayment of loans and the paying down of debt will be necessary and unavoidable, both nationally and personally. I do not now think the inflation will rescue the personally overly indebted. Loans will have to be repaid at real (much higher) rates of interest.

    Consequences: painful and real - no matter what the politicians claim.

    However the politicians will not take the necessary steps quickly, 'because the country will not understand' - Mervyn King's excuse for his failure that substantially created the bubble of the noughties that directly led to the crash and the current problems.

    The perception of political stupidity and cowardice and its consequences is why George Soros may be right to take the view that he does. It is after all quite understandable when you look at the performance of both political parties - neither one dare tell it like it is for both share the same incorrect economic philosophy.

  • Comment number 18.

    Japan went into recession for 15 years? Not according to the OECD figures. Yet more fact-free reporting on the East Asian economic model.

  • Comment number 19.

    11. At 11:52am on 28 Jan 2010, Dunstan wrote:

    "I hereby award Soros the accolade "Master of the Bleeding Obvious"."

    It might well be the 'bleeding obvious' but in needed saying (and well done Robert in reporting it), because no UK politician is going to utter such a message in the next four or five months - until after the election that is.

    I get the distinct impression from these blogs and the wider world that some think that they are going to be able to pick up were - to put in broadcasting terms - the interpreted programme went off air, those people need to accept that not only did the VT tape break, the rest of the tape has been hopelessly mangled and there is no back up and the script has been shredded to boot...

  • Comment number 20.

    Surely a bit of reverse psychology here. If George Soros knows what's going to happen and intends to exploit this knowledge then he's not going to tell us. Would you believe a bookie who told you what was going to win the 3.30??
    You credit him with being one of the few financiers who foresaw the finacial crash and that he attributes much of our problems to excessive borrowings for excessive house prices. Maybe the financiers didn't see it but many of us outside the finacial sector saw it - I saw it, my Dad saw it, most of the lads in the pub saw it. We may have not known how, why or when but it was clear that neither house prices nor stock markets could go forever upwards. It was also clear that if every man, woman and child in the UK was on average nearly 19K in the hole; if I had no debts and my significant other had no debts then statistically the guy on the other side of the pub was nearly 57K in debt. A few rounds in the Cross Keys would have got you that wisdom long before Mr Soros and probably a lot cheaper.
    So what was his tip on housing? Back in summer I bought (cash) a very modest and marginally distressed property, figuring the market may have bottomed out and did a few repairs. Comparable properties are now asking (and getting) thirty percent more than my outlay. What is this madness?? Surely we are now getting to the stage where all the cash buyers have bought, as have the "good" mortgage risks. At what point do the estate agents and mortgage companies start taking a punt on the A-minus and B-plus (and below) applicants? Does it all start again or are we approaching a tipping point where the moneylenders see the light and bale out?

  • Comment number 21.

    I think the outlook for the UK is still bleak. Don't let this Government fool you into thinking that we are out of the recession just because of a forthcoming General Election.

    Look at the job losses announced this morning at Toyota, Students Loans company and others, they run into thousands. Infact, I challenged the BBC to keep a running, daily/weekly total of announced job losses on this business website.

    Why don't the politicians attempt to live in the real world rather than look at some shady growth figures that show a 0.01% rise?

  • Comment number 22.

    Well the Guardian says he said something different,
    "Some countries such as Greece do have deficits of 12.5% of GDP, which is intolerable and has to be reduced. Other countries such as the US and the main European nations have plenty of room to increase their deficits."

    http://www.guardian.co.uk/business/2010/jan/27/davos-soros-debt-double-recession

  • Comment number 23.

    In this article, Soros has all but pre-announced that he's going to short Sterling (big time) when the timing is right...probably sometime soon!

  • Comment number 24.

    I'm currently trying to save up for a deposit on a house.

    If the pounds going down what should I do - any tips out their?

    Should I put it into Gold or is that just another bubble waiting to burst?


    PS: RP do you know if Soros is betting on the pound crashing atm? If so I'm unsurprised he wants to talk to you about how we are doomed!

  • Comment number 25.

    #8. At 11:48am on 28 Jan 2010, Noideaatall wrote:
    “I think he mentioned that as well as much higher capital requirements, most of them had unlimited liability?

    Is this correct? Perhaps someone on this blog could clarify?”

    Most ‘hedge funds’ are really (at least) two things – the fund vehicle and the fund management entity.

    The structure of the fund vehicle depends on the target investors, but is typically a limited company or a limited partnership (or LLP). Investors acquire shares (or partnership interests) and the fund vehicle uses these funds, possibly with additional borrowed funds, to take investment positions. I have never seen a fund vehicle that exposes the investors to a liability in excess of their fund investment.

    The fund management entity is the entity that the fund vehicle employs to manage the assets and operation of the fund vehicle. The fund manager is again typically a limited company or limited partnership (or LLP), and again, I’ve not come across a fund management entity that exposes the owners to unlimited liability.

    (An important caveat is that personal liabilities cannot normally be avoided through the use of a limited liability entity – if a director of a limited company commits fraud, he or she is normally personally liable without limit, notwithstanding the limited liability nature of the company.)

    Some fund managers retain an interest in the fund vehicle, and this is sometimes structured as a general partner interest in the fund limited partnership. Such an interest would normally carry an unlimited liability for the debts of the partnership, but if this interest is held by a limited company (for example) then the ultimate beneficial owner (the holder of the shares of the company) is insulated from the unlimited liability attaching to the general partner interest.

    So, I’d be surprised if very many hedge fund investors or hedge fund managers had unlimited liability.

    (Also, if the original report is correct then the suggestion is that prop trading operations should “hold as much capital as typical hedge funds”. It is important to note that many hedge funds are established in such a way as to avoid financial regulation. Most hedge funds do have a lot of capital, but that’s because of the way they are structured – it isn’t because the regulators have set prudent capital requirements for them…)

  • Comment number 26.

    Some of my ideas for reducing the deficit:

    1. Much of the public sector to be asked to go on a four day week (with pay cut of 20%) - otherwise got to leave (this would be much better than sacking people who end up claiming benefit plus the other wider crime/health costs to the taxpayer of high unemployment). A lot of government just gives work to other departments so if they all had Mondays off it wouldn't make much difference!

    2. Renegotiate GP contract - forget the targets, pay by performance etc -go back to how it was before.

    3. VAT up to 20% (but increase child benefit/pension to compensate for those in greatest need)

    4. Basic rate income tax to 25% (but 5% reduction in employees national insurance). This would not affect employees however it would affect those who get income from other means (eg rental income)

    5. Top rate income tax to 45%

    6. Put capital gains tax in line with Income tax (currently a large property investor pays 18% tax whereas a basic rate tax pays 31% (20% Income Tax, 11% Nat Ins) on employment.

    7. New banking employees tax - 80% tax on any earnings above £80k from an employee of a bank which has any state guarantees - if they don't like it they can leave and set up a hedge fund etc with no state guarantee!


  • Comment number 27.

    I don't understand observation number 3 - the concept of banks that engage in proprietary trading holding as much capital as hedge funds. The latter are usually highly leveraged having borrowed money against the security of the fund assets from a prime broker or banker that pretends to be a prime broker. Can someone please help me?

  • Comment number 28.

    21. At 12:27pm on 28 Jan 2010, DavidHankey wrote:
    "...Infact, I challenged the BBC to keep a running, daily/weekly total of announced job losses on this business website...."

    I remember that when the Tories were last in power the BBC evening news bulletin used to have a review of job losses around the country. Drip, drip, drip. Why are they not doing that this time?

    I guess the programme wouldn't be long enough to list them all at present. I would be featuring on the 5 March, when I say goodbye to my job.

  • Comment number 29.

    I suspect that those who have already shorted sterling are sitting on huge losses they are desperate to reverse hence the doom predictions galore re UK and USA.
    Remember pundits see everything as a continuation of trend, but things change, and our public finances went wonky because of the crunch, they will stabilise when the economy grows.
    Here's my prediction.... the pound will continue appreciating against the dollar and the Euro with a few corrections here and there, growth will be great and doom will be banished until the next load of trouble kicks up post-Olympics.

    Onward-ho says, as for what Soros says, he would wouldn't he!

  • Comment number 30.

    So its going to take 7 - 10 years to rebalance. so what, unemployment is at an acceptable level, growth however anaemic inexorably starts to redress the deficit, the pound is approaching its long term positon against both the Euro and the US Dollar (1.25-1.30 and 1.58- 1.70 respectively) the untradeable securitised assets now have A value as opposed to NO value and can be traded again, losses on these are being traded out by the historically large margins the retail banks are making on everyday loans (3 month libor flat around the 0.62 mark and unlikely to go over 1.0 in the next year).

    It got very bad and very overleveraged, its now recovering to bad and will hover around so-so for a good while and then it will be o.k.

    Its a bit like when you took out your first mortgage and were stretched to the limit, but then (on repayment at least) you began to acquire equity and your earnings rose slowly. It became more affordable and after 20 years (As long as you didn't use it as an ATM) it became very affordable.

    Headlines I've seen in the last few days.

    Most categories of crime down
    Youth drinking less and taking less drugs.
    Manufacturing optimism rising.

    What I HAVE NOT seen in any news

    Riots
    Morgues overloaded
    Beri-Beri or quashiokor rampant
    Reposessions the norm
    Major reatailors going bust
    ANOTHER estate agents chain folds

    I live in the very unpreposessing area of the Medway Towns, low educational standards (some of the worst in the country)
    Higher than average for England alcohol abuse and lower than average house pricing.

    My wife and I earn 2/3rds of the national average wage each, have little savings, but will be improving our house this year, probably helping out our son and still having two very reasonable weeks in South West France, eating and drinking our fill.

    We (wife 63, me 54) have a 70,000 mortgage that means we will both work after our retirement age, but we had a lovely 3 course meal in a Carluccios the other night (might have to do an extra shift to pay for that).

    All I am saying is that the picture of Total social breakdown, Absolute poverty, rampant epidemics, wholesale reposession, widespread bankruptcy and this mythical subsidised majority of feckless scroungers are not apparent in my environs, and believe me Medway has higher than average level of triple generation spongers, but they are what they always have been the unemployable, ineducable 10% sub-class that all populations have had, will have and must bear with.

    The rest of us didn't need the poster.

    We WERE calm and We DID carry on. Good years, bad years, good decades, bad decades.

    During ALL the bull runs and with all the asset rises did none of these moaners not see huge growth in their pension pots, did none of them sell up in London or wherever and downsize to France or the country?

    If not, who are the hundreds of thousands in Spain, the second home owners by the tens of thousands in Cornwall, the Lakes, Wales etc?

    Some have done VERY well, some Quite well, some not so bad, some poorly and some disasterously, but if you look at the DECISION making; the ones that have fallen flat in the main did it to themselves. If you couldn't sort yourself out during the last 15 years of boom then more fool you.

  • Comment number 31.

    An ideal global financial system would consist of a single currency the price of which was determined by market forces and not state sponsored intervention, trade would be completely free with the removal of all import/export tariffs. This is not going to happen, we are stuck with this flawed system of politically manipulated trade and exchange rates. But now we have had a reminder that this system is fallable and therefore boom and bust has not been irradicated the work to resolve the flaws has largely been done i.e. all financial institutions, investors and businesses know that there is no such thing as a one way bet, risk will now be more acurately factored in(untill it is forgaotten about in 10-15 years time). Unless the world decides it is going to completely tear up the rule book, then not a lot needs to be done. If there are to be tweaks just so that the political classes can be seen to have some sort of control over the system then the major initiative should be to get China to play more by the rules of the current system. Capital controls should be lifted along with barriers to internal investment along with a free floating exchange rate, this is the single most damaging aspect of the global economy and lies at the root of the recent problems. If they want to play the free market capitalist game they have to abide by all the rules and not just the ones that facilitate their success.
    As for Soros, just another speculator, if he wants to bet against the UK and US then he is entitled to do so but he shouldn't be given the free PR by the BBC to furthers his ends, particularily if this involves damaging the prosperity of this country. But I am not surprised of your complicity, over the course of this crisis you've used the same strategies raise your own personal capital with your damaging methods of reporting on financially sensitive situations.

  • Comment number 32.

    Lets face it our main problem in this country is that we are fixated on buying and selling houses. This has left us vastly over borrowed and invested in something which most derive no income from. Yes they have usually increased in value but its a zero sum game for the uk as they must be sold to others in the UK.
    But what chance would a political party stand if it were to declare its policy was to take all measures including loosening planning laws with the aim of increasing the supply of houses in order to put on going downward pressure on house prices.

  • Comment number 33.

    For a man who is shorting the pound, he sure hopes it plummets...unfortunately British people have confidence in themselves to turn it around.....or have they?

  • Comment number 34.

    Yes, it did need saying and to some this stating the obvious; however, not many people are listening, or are too ignorant to understand.

    Having just read one of Soros' book's, I dislike him. He's up there with the rest of them trying to influence matters, with the aim of feathering his own nest.

  • Comment number 35.

    Why do you persist with this line that the problems arose from 'excessive borrowing by individuals for house purchases'. There is absolutely no evidence for this. Despite the worse recession since 1930 the rate of house repossessions is remarkably low, house prices rose last year. There is no evidence whatsoever that UK households are overstretched by the size of their mortgages. One of the biggest reasons for this is the social changes to household incomes. The majority of homeowners have 2 salaries sustaining mortgage payments. This is not the 1950s when wifey stays at home raising the kids with no opportunity or ability to make a contribution to the household income. Therefore we have a much more stable social model to smooth out the ups and downs of the economic cycle where if one partner looses their job payments can be sustained by the other.
    Show us the facts and evidence to uphold you relentless views on this matter.

  • Comment number 36.

    FACT - The household savings rate in the UK and US is above that of Japan!!!

  • Comment number 37.

    #24

    Investments are a gamble and I would seek an expert opinion from a PFA or even your bank/building soc for something as important as a house deposit, not from a blog board - there are some nutters out here.

  • Comment number 38.

    #26. At 1:00pm on 28 Jan 2010, danj180 wrote:

    "4. Basic rate income tax to 25% (but 5% reduction in employees national insurance). This would not affect employees however it would affect those who get income from other means (eg rental income)

    5. Top rate income tax to 45%"


    Hmm, what would that achieve apart from making the poor even poorer and the rich even richer, I'm no socialist (income leveller) but the above sounds daft, if the intention is to get investment flowing wouldn't it be better to via some ring-fenced taxation policy (thus the top rate might actually be increased above the current 50%, but the increase will be ring-fenced and the legislation perhaps have a sunset clause too) rather than the vagaries of the free market - unless you are also suggesting that money controls should also be reintroduced, something I think the UK last witnessed in Stirling crisis of ~1968?...

  • Comment number 39.

    29. At 1:13pm on 28 Jan 2010, onward-ho wrote:

    "Onward-ho says, as for what Soros says, he would wouldn't he!"

    ...and Boilerplated says, if "Onward-ho" knew as much about the markets as Soros he wouldn't be posting here, he would be at Davos along with Soros! :-)

  • Comment number 40.

    #38

    What I was meaning was that the 40% 'higher rate' (for income above approx £45k) would be raised to 45% (I wasn't thinking of the 50% rate for income above 100k or whatever it is? - maybe that can be left?!)

  • Comment number 41.

    35. At 1:25pm on 28 Jan 2010, FearandLoathing wrote:

    "Why do you persist with this line that the problems arose from 'excessive borrowing by individuals for house purchases'. There is absolutely no evidence for this. Despite the worse recession since 1930 the rate of house repossessions is remarkably low, house prices rose last year...//..."

    The problems started in the US housing sector, got exported by the sale of (what is now termed) "toxic loans" - those US mortgage loans that had no chance of being paid back. Rather than look at the UK house repossessions figure go and look at the USA figure for Foreclosures...

  • Comment number 42.

    As far as I can tell the issue is this: Government spending in the next tax year is projected to be £200 billion higher than tax receipts.

    So what do you do;

    1) Severely cut public expenditure = public sector job losses
    Cancel infrastructure and other projects = private sector job losses
    Cut benefits and pensions, = poorer sections of society get hit

    2) Try and borrow it by issuing gilts, but evidence suggests there isn’t the demand for £200 billion worth of them, and even if there was, the UK would end up in a compound debt trap.

    3) Substantially increase taxation, but then most would spend less in the private sector to compensate for it and the UK would fall into a compound tax spiral with more private sector job losses.

    4) Get The BOE to print another £200 billion to fund the shortfall like last year, but then sterling’s value will likely fall further, and facing the problem is only delayed another year in any event.

    I fear George Soros is right unfortunately.

    And what are we relying on to solve this problem?

    You’ve got it folks a pantomime of politicians frolicking around the Westminster stage, bleating out the most inept of comments, whilst pocketing substantial sums of money in expenses.

    Once upon time I would have said it beggars belief, but I’m not even sure it does anymore.

    As Bob Rocket once said ‘it’s definitely a train not a light’

  • Comment number 43.

    Afternoon Robert,
    "He added - which will not come as a surprise to readers of this column - that the sources of the UK's financial weakness were excessive borrowing by individuals for house purchases and a financial sector that had also borrowed and lent too much. "

    I note from Bloomberg last night that house purchases in Australia are currently costing 9X earnings. Does that mean that they are due for a bubble bursting?
    Hint, consider resources, investment and interest rates now and projected for Australia.

  • Comment number 44.

    Why?

    Is the vulture planning another raid on us using 'our' money loaned to him by the billion/trillion by the 'banks'?

  • Comment number 45.

    "31. At 1:15pm on 28 Jan 2010, FearandLoathing wrote:

    An ideal global financial system would consist of a single currency the price of which was determined by market forces and not state sponsored intervention"

    Question is do you like gold or paper money?

    "we are stuck with this flawed system of politically manipulated trade and exchange rates....... not a lot needs to be done."

    How do these statements make it into the same paragraph?

    35. At 1:25pm on 28 Jan 2010, FearandLoathing wrote:

    the rate of house repossessions is remarkably low, house prices rose last year. There is no evidence whatsoever that UK households are overstretched by the size of their mortgages."

    Isn't the fact that personal debt rose massively ahead of incomes some indication that we are overstretched? Doesn't the fact that people are seeking to pay down debt indicate that we are overstretched?

    "One of the biggest reasons for this is the social changes to household incomes. The majority of homeowners have 2 salaries sustaining mortgage payments. This is not the 1950s when wifey stays at home raising the kids with no opportunity or ability to make a contribution to the household income."

    If interest rates rise we won't need anybody at home to look after the kids: they'll be out looking for work just like their parents.

  • Comment number 46.

    Hello Robert

    Thanks for this insight into the views of George Soros. He may well be talking his book but he is always an interesting listen. On advice from another poster on here I have looked at notayesmanseconomics blog which has some similar views. I was also simultaneously amused and disappointed by the link he has which alleges hotel expenses mismanagement by the man you interviewed yesterday Mr.Turner. After all Mr. Turner is supposed to be setting a good example in his role as head of the FSA.

  • Comment number 47.

    London bankers at Davos should pause to read the words of Horace Smith:

    In Egypt's sandy silence, all alone,
    Stands a gigantic Leg, which far off throws
    The only shadow that the Desert knows:
    "I am great OZYMANDIAS," saith the stone,
    "The King of Kings; this mighty City shows
    "The wonders of my hand." The City's gone,
    Nought but the Leg remaining to disclose
    The site of this forgotten Babylon.
    We wonder, and some Hunter may express
    Wonder like ours, when thro' the wilderness
    Where London stood, holding the Wolf in chace,
    He meets some fragments huge, and stops to guess
    What powerful but unrecorded race
    Once dwelt in that annihilated place.

  • Comment number 48.

    Continuation of tirade....
    Do bankers really CARE what happens to the economy?
    On the evidence of the last 10 years..... perhaps NO.
    Just as long as they personally get rich, many of them would say all is OK.
    It's the governments' job to CARE about what happens to the economy, not the bankers.
    If the government allows them to borrow the rest of the worlds money, and lend it all out on over-inflated house prices and dodgy property scenarios, they will do just that (sub-prime, buy to let etc).
    The ratio between average salaries and average property prices is key.... banks and governments ignore it at their peril.
    Recently it has come more into balance, although some might say it is still a bit high.
    It was obviously the governments' intention to turn the City and Wall street into "glorious supercentres of finance" (perhaps a good intention), and so removed most of the regulations.... but if it is all lent out on a house of cards, it will fail, and we all suffer.
    Sarkozy seems to have good ideas, and the French did not fall down the same drain as we have.

  • Comment number 49.

    George Palindrome for a surname now, Robert? I mean to be offensive.
    Now why did I start humming "Hey ho - silver lining and away we go!" watching Mr Soros on TV just now I wonder. The Loan Ar-Ranger - TV series - "Hey Ho Silver and Away!" - wasn't it - allegedly? And his pal Tontine. No offence Native Americans (Jay Siverheels - that takes me back - lol) but why should we listen to the Soros and Co - that allegedly treat our whole economy as a glorified casino? Listen to them when they decide not to use "their casino" this particular financial quarter. And tell us why not. Diddums was used on this site yesterday. I like it.
    They - financial wizards - are effectively saying - "I see no prospect of making money out of your Economy and therefore I am off!" Bye, Mr Soros.

  • Comment number 50.

    42# DEMPSTER

    The total amount of EXIES fiddled by the MP's as "Grey Salary" (The parties agreed/colluded in deciding that Pay Increase were bad politics so shifted it to exies) will not pay more than a handful of minutes interest on the national debt, its a non-issue.

    Your non post that basically says "Nothing can be done" is nonsense, but I suppose means that if I could be bothered to check your previous it will be "Public sector wasters, Immigrants, Spongers, Soft Prisons, Anybody Who is Not me or like Me etc" its ALL their fault.

    There is some basis to that kind of complaint, Depression should never have been decreed a disability, its a state of mind, It should be a hard and fast rule that no one can avoid work on the basis that their benefits are higher or equal to earnings.

    The argument that you can not expect someone to work for the same money as not working does NOT apply, benefits should be seen as a privilige not a right and it should be compulsory that ANY work must be taken and that wages earned are deducted £1 for £1 off the benefits, no one has a right to be paid not to work.

    The numbers involved of disingenous non-economically active, while far too high involve sums that while economically a hinderance are not the cause of the current dificulties and heaping all the blame onto that situation beggars (to use your very saloon bar phrase)the needed questions about short termism, quick profit over investment and the lack of a very necessary hard fought efficiency drive in the public sector, rather than a "Get Rid of them All" knee jerk.

    Countries and Economies are BIG and turning them is like trying to zig-zag an oil tanker when the winds are completely variable in strength and direction and NOT under your sole control ( Globalisation).

    I find little competence in any of our political parties and you will no doubt have assessed that I slightly favour the incumbents, but that is as much because I fail to see how a party that is in the ownership of Banks,Big Business,Old and New Money and is inherently dedicated to the preservation of the status quo wherin None of the Above have had more than a dint put in their personal wealth are the natural choice to defend the majority of us.

    The Higher Powers may have seen their positon change from " Unbelievably more Wealthy and Powerful than us" to just "Vastly more Powerful and Wealthy than us" but they are still no more likely to consider us as anything more than Markets and manufacturing units, numbers in a profit and loss column.

  • Comment number 51.

    Cheer up Robert!! Could you write a positive, upbeat blog just once? You don't have to base it on fact (your a journo, after all) - It'd just make us all feel a little less miserable for 30 mins or so.

  • Comment number 52.

    #18 OECD figures show inflation adjusted GDP for Japan from 1995 to 2007 as being in recession for ten years. [The only two years which do not fit with this trend are 1997 and 1998]. The figures from 91 onwards aren't great either. When the similarities are so close I think its a very good example to refer to.

    Its accepted that the real slowdown (lost decade) began in c1991 as a result of the huge interest hikes by the gov to stop the asset bubble which had grown in the late 80's. In 92 the Japanese gov had surplus of c.2%, by 2001 it was a deficit of over 7%. Sound familiar yet?

    Japan was a warning sign we all blissfully ignored. It also spawned 'quantative easing'.

    Let us hope we haven't just entered our own lost decade...though that appears to be exactly what Mr Soros is suggesting, as are many bloggers here myself regretably amongst them.

  • Comment number 53.

    35. At 1:25pm on 28 Jan 2010, FearandLoathing wrote:

    Why do you persist with this line that the problems arose from 'excessive borrowing by individuals for house purchases'. There is absolutely no evidence for this. Despite the worse recession since 1930 the rate of house repossessions is remarkably low, house prices rose last year.

    let's see if your observations will still stand when interest rates rise to 5-6% (which it will do at some point soon).

  • Comment number 54.

    35. At 1:25pm on 28 Jan 2010, FearandLoathing wrote:
    Why do you persist with this line that the problems arose from 'excessive borrowing by individuals for house purchases'. There is absolutely no evidence for this. Despite the worse recession since 1930 the rate of house repossessions is remarkably low, house prices rose last year.

    Until you have actually payed off your mortgage, the banks and moneylenders own your home. I think the government must have intervened on repossessions for the simple reason that there is a lack of affordable homes and there is nowhere to re-house these people. I do understand that people are fearful of their houses devaluing, it is human nature. But the country will only move forward when affordable housing is built for people to free up more of their salaries.

    The housing minister recently said a couple of billion quid is going into building houses, which one third would be 'affordable'. So the other two thirds are going to be 'unaffordable !'

    Doh ! they say we get the government's we deserve.


  • Comment number 55.

    50. At 2:34pm on 28 Jan 2010, Moncur's Maraudeluders wrote:
    42# DEMPSTER
    'our non post that basically says "Nothing can be done" is nonsense, but I suppose means that if I could be bothered to check your previous it will be "Public sector wasters, Immigrants, Spongers, Soft Prisons, Anybody Who is Not me or like Me etc" its ALL their fault'


    Then you should've checked shouldn't you.
    But then some people don't usually check do they.
    Next time check.......mate


    In any event much can indeed be done, the issue is what and how.
    It's the what and how which seems to be missing at the moment from politics in general.

    The specifics that is.

    Who is to pay the price, and how much is that going to be.


  • Comment number 56.

    #53 fairsociety

    5-6% would still be historically low, and is unlikely to be reached until the last quarter of 2011 at the earliest, more likely to be 2nd or 3rd quarter of 2012.

    By that time many adjustments will have been made, both by the financial institutions and more importantly by the borrowers themselves. Huge numbers of borrowers are currently enjoying massive drops in monthly repayments which ALL the figures (credit cards, personal lending)suggest are being used to pay down debts.

    Therefore when the interest rates start to rise (as they must) people will in the main be in a position to accommodate them. If your mortgage payment rises from £400 a month to £600 a month but you are not servicing loans or credit cards at £200 a month then you are in equilbrium.

    Having back read a lot of posts to Pesterons blog I assume that an awful lot of posters have bought bullion or EFT based on gold, as their relentless "We're doomed" chant only makes sense if they are trying to ramp gold spot or convince themselves that all the money they are laying out on rent now(having sold property as the market began to crash) will be recouped when the fiat currencies collapse and Gold hits $10,000, though of course if the $ is at 15 to the pound then you haven't made a penny!

    Reading some of the posts and recommended "New" economics has reminded me of the Sci-fi I enjoyed as a lad, all apocalypse and survivors bravely struggling against the barbarians "outside" all trying to get their hands on your hoarded soy mince and bottled water!

    Keep Calm and Carry on. it works.

  • Comment number 57.

    Where is WritingsOnTheWall today?

  • Comment number 58.

    #55 I'll check back and issue an apology if proved wrong, laziness is no excuse and I may have fallen pray to "Tarred with the same brush" mentality in that an awful lot of the serial whingers on many blogs always seem to come back to a list of petit national socialist scapegoat grievances and a " Someones to Blame, burn them mentality".

    If that isn't you then apologies in advance. I will check now.

  • Comment number 59.

    moncurs maraudeluders, I am a litho printer earning the same dough as you and your wife, though I am single but I would not fully go along with the plain assertion that it is not wrong to expect someone to work for the same money as someone who is not working.On the face of it it might seem ok...the person not working and enjoying the same lifestyle as someone who is out doing a nine to five or whatever job.I have no problem supporting anyone with my taxes who is worse off than me, as I hinted, the person not working may be very ill, on compassionate leave or anything, I have no real complaint about my taxes going to people very much richer than me as long as when I need help it may still be there but what on earth is the message being spread when it is viewed that there is nothing inrinsically wrong with expecting someone to work for all they have while others get the same if not more from the state, it takes away any compunction to work and devalues the work ethic,something that used to be dear to the labour parties heart.The real commonsence approach would see that the choice is what it allways was,you do not have to work if you do not want to but do not expect to be able to afford a car, or a new flat screen tv,i-pod or whatever it is that you may desire.

  • Comment number 60.

    47 Jacques Cartier
    Thanks for Horace Smith's take on London bankers ;O) I'd only heard Shelley's take on Ozymandias before, which, on reflection, is also quite apt...

    I met a traveller from an antique land
    Who said: 'Two vast and trunkless legs of stone
    Stand in the desert... Near them, on the sand,
    Half sunk, a shattered visage lies, whose frown,
    And wrinkled lip, and sneer of cold command,
    Tell that its sculptor well those passions read
    Which yet survive, stamped on these lifeless things,
    The hand that mocked them, and the heart that fed:
    And on the pedestal these words appear:
    'My name is Ozymandias, king of kings:
    Look on my works, ye Mighty, and despair!'
    Nothing beside remains. Round the decay
    Of that colossal wreck, boundless and bare
    The lone and level sands stretch far away.

  • Comment number 61.

    Pawns_or_players; you need to check your facts.

    Even if what you said was correct, you're admitting Soros grossly overestimated the Japanese recession by five years.

    The statistics on the OECD website says real GDP in Japan went into decline in 1998 and 1999 - but no other years between 1990 and 2007. Otherwise, it has been almost continual growth - a pretty strange definition of recession.

  • Comment number 62.

    Can we have a new Honour called STBO created? It should be on par with KCMG or KCVO. The first recipient should be the afore-mentioned Mr. Soros. Arise Mr. George Soros, STBO

    STBO= Stating The Bleeding Obvious

    Seriously, Robert, I'm struggling to see the value in his comments. I tell you what, I'll be his opposite. So he says, the anaemic growth in the UK and US will be about 7 years. I say it will be 3.5 years. Since I'm a qualified economist, I hereby give you permission to question me if this hasn't happened in June/July 2013. If I'm wrong, I will leave the UK. If I am right, Robert, will you agree to give me £1 million?

  • Comment number 63.

    Has anybody read Meltdown by Ben Elton - nothing in it that will really open the eyes of the high brows on here but an entertaining and well observed read anyway.

    There is a particularly thought provoking chapter around page 150 all about the bankers going to the Live 8 Stop World Poverty concert.

    Basically the point from the chapter is that we all want to stop wprld poverty provided it doesn't affect us.

    The reality is (and this brings my comment back to this blog) that for things not to get worse for the UK and US they have to remain as bad in the Rest of tHe World because there is not enough 'Wealth/resources' to go round.

    So each individual is happy to give £10 out of their income to a charity concert but would certainly not be prepared to swap their semi for a terraced so that a family in third world could swap their mud hut for a brick hut (or similar - I'm sure you get my point).

    So how do we escape from the recession? Who is going to pay for us to come out of recession?

    1) We get worse off by either public expenditure cuts or tax rises or both.
    2) Someone in another country gets worse off by buying something we are producing.

    Based on the UK economy at the moment I think number one is inevitable and hence 'number one' (ie each of us) is going to suffer.

    There have been a lot of blogs that have encouraged attacks about bankers pay - the reason is because people can see that when we all have to pay they will not be affected because their wealth is already so great.

    This inequality has always existed in our society but is not healthy. I would be surprised when the tax rises and public expenditure are finally cut and we all become poorer that this is not the catalyst that finally leads to bankers becoming at risk of physical attacks.

    I doubt George Soros will be poor in any event!

  • Comment number 64.

    29 39 "Onward-ho says, as for what Soros says, he would wouldn't he!"

    ...and Boilerplated says, if "Onward-ho" knew as much about the markets as Soros he wouldn't be posting here, he would be at Davos along with Soros! :-)

    Yup,Soros knows about the markets, but is he betting money on what he is saying?

    Shouldn't pundits have to say if they have a vested interest in what they are saying?

    And gimme time, I'll be at Davos afore ye know it!

  • Comment number 65.

    56. At 3:20pm on 28 Jan 2010, Moncur's Maraudeluders wrote:

    "Keep Calm and Carry on. it works."

    I think that is exactly what most people have been doing and also what many people are afraid of - that is - bankers and similar 'investors' carrying on (as before)...

  • Comment number 66.

    #57

    Davos?

  • Comment number 67.

    Boom and Bust is a natural cycle, the bigger the boom the bigger the bust.

  • Comment number 68.

    Yes we are quite entagled in international business when it looks like other governments are starting to look at digging over their own turf well I hope some downward pressure forces us to change the way we manage the economy.

    The council doesn't want carrots it wants cash so don't tell me to plant an allotment.

  • Comment number 69.

    Who to vote for ?
    Brown & Darling
    Cameron & Osbourne
    Clegg & Cable

    Do you know ? If Vince had won the leadership of the Lib-Dems instead of Cleggover, there is a good chance that the lib-Dems could have beaten both parties at the next election.

    We will never know. I take it you will stick with Labour Ho ?

  • Comment number 70.

    Why aren't we talking about tax policy?

  • Comment number 71.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 72.

    #64. At 4:16pm on 28 Jan 2010, onward-ho wrote:

    "Shouldn't pundits have to say if they have a vested interest in what they are saying?"

    ...and to think that others have been accusing Robert of saying the bleeding obvious!
    I tend to take this view, of course they have a vested interest in what they are talking about but even they can get seriously burnt if the fire gets out of control, just supposing the UK did default on it's national debt, it would not just be Sterling that suffers, it will not just be the UK that suffers nor only those with UK investments - it will be Lehman Brothers all over again... Sometimes one needs to share your own insight to protect ones own strategy if you see what I mean?

    "And gimme time, I'll be at Davos afore ye know it!"

    Was that you'll be at Davos or you'll be Davros? :-)

  • Comment number 73.

    DEMPSTER Please see #55 and accept my apology.

    While I disagree with your outlook you are making a valid argument.

    I believe that like most people you have not accepted that there have always been Chiefs, Shamans, Princes, Priests, Kings, Popes, Usurers and Moneylenders, Bankers and Emperors and ALWAYS will be ( or at least for the next several hundred years or more).

    Every attempt at Egalitariansim ends in terror and Inequality, Rich Popes, Datcha'd Commissars, Corrupt senators, Chinese beurocrats as warlords etc, etc.

    The niggling little improvements of each "progressive" govt have added up with the assistance of science to extended lifespans, greater education and a huge improvemnet in the lot of the working class.

    I was taught the horror of the Great Depression by my family where half my (would have been Aunts and Uncles) died of Diptheria, Scarlet fever and even Flu when what medical aid that was "Available" was unaffordable.

    The broken Society merchants of today are playing with fire over a bit of fraying round the edges, if it were truly Broken the same whingers would be awaiting their turn in the Gulags of Twickenham, Headingly and the pits where their golf club once stood.

    But it isn't going to happen, hold your breath for a decade and this minor unpleasantness will be forgotten.

    Fred who?

  • Comment number 74.

    #57 Albino

    WRITINSONTHEWALL has probably been taken out and shot, He'll be in his element at that vindication of much of his output, wafting about in the ether chanting " Told you so!" and " You just watch, you'll see I was right!"

    May Rosa and Vladimir welcome him as first among equals with showers of (Red) rose petals.

    Actually I wonder if the Beeb have had enough of his monologue, it was getting fairly repetative and I only dip in here every few months!

  • Comment number 75.

    69....I'd vote for St Vince!

  • Comment number 76.

    soros is right about most of these things but anyone can see the big picture now. the reason is there is 0 jobs but massive job losses coming this year from public sector. the gov has borrowed to the limit to save gordons credibility. the whole thing collapses after may no matter who gets in. 2 ways we can address it, 1st take a kick in the b***s and the pain will be quick and severe. 2nd and more probable is take a gentle squeeze for years and the pain rises each year till it peaks in 7 years.
    the good thing is everyone is in same boat and may make people more decent of the experience.

  • Comment number 77.

    73. At 5:11pm on 28 Jan 2010, Moncur's Maraudeluders wrote:
    But it isn't going to happen, hold your breath for a decade and this minor unpleasantness will be forgotten.

    Are you really describing this financial crisis as a 'minor unpleasantness' ?
    i don't think people who have lost their jobs and houses and been told that their children will spend their whole lifetime paying off our debts, would agree. And that's even if you don't agree that the Global Financial System is in meltdown.

    What planet are you on ?

  • Comment number 78.

    74. At 5:18pm on 28 Jan 2010, Moncur's Maraudeluders wrote:
    Actually I wonder if the Beeb have had enough of his monologue, it was getting fairly repetative and I only dip in here every few months!

    ----------------------

    WOTW will be back!

  • Comment number 79.

    I don't understand the people pointing out that George Soros may have self-intested motivations for what he says time....no!.....really?

    As with virtually everyone in public life the interest lies in trying to discern the motivations correctly the better to really understand what's being said.

    At the end of the day when he took on the Pound in the early nineties, he won $1Billion because his moves were smoother than Lamont's (and Major's,Lawson's and Howe's), his understanding of the position was deeper and finer... and I agree with Stevevo who feels he's probably limbering up to take on the UK's currency again... and if that's the case, maybe he won't win this time....but you wouldn't like to bet against it.

    To do his thing though Soros needs upheaval---and the upheaval in the UK is worse than anywhere else (unless Ireland and Spain join Greece in the mire to really tip the Euro into the twilight zone)because we've been bigging it up in financial La-La land longer and harder than anyone else....

  • Comment number 80.

    #77 rvaucbns

    Planet Earth according to my sat-nav, the one where the terrible things that you mention happen to a very small number of people out of a very large population, where similarly thousands of people get terrible cancers and die or get mangled in road accidents.

    Not that its in any way funny, but just like this financial hiccup, a lot of cancers are caused by the knowing and willing abuse of the victim, heavy drinking and smoking or eating junk and avoiding good food or exercise, and in the same way a lot of road accident fatalities are the victims of their own reckless driving.

    Now in both these cases there are many, many innocent victims and I do not seek to depreciate the tragedy of that, but in general the vast majority of the population are not affected no matter how horrible it is for those that are.

    It is the same for the current economic situation; for every family thrown into disarray there are thousands who have only had to cancel this years skiing, for every house repossessed there are tens of thousand who are just having to put off the new Poggenpohl kitchen or downgrade it.

    Do not try and tell me who works in an ordinary factory that has already had redundancies that this is the end of civilization as we know it.

    On a personal level its as if your car has failed its mot and the gas boiler has breathed its last just at the same time you are trying to pay off the xmas credit card bill, you buy a £100 banger to get you to work and huddle round a 2 bar leccy fire in one room and wear jumpers to go up to bed, its not going to kill you.

    Is anyone you know starving or freezing to death? Is anybody you know that isn't one of societies perpetual losers homeless?

    Have the councils stopped providing at least a dry room for the homeless?

    This is not Haiti nor even Latvia or Rumania, its a bumpy stretch of road in the inexorable climb in living standards of the vast majority of us, so I know which planet I'm on, what ghetto are you living in?

  • Comment number 81.

    23 etc. He would not pre-announce selling sterling if he was going to
    do it. More likely he's already short, perhaps v the euro, and
    wants to bale out.

    As we don't know what positions Soros holds, we can't tell
    whether he's bluffing or not. When someone like him opens his
    mouth, I would imagine it is for a particular reason, not
    necessarily for the greater good of mankind.

  • Comment number 82.

    The movie "Stock Shock" should be seen for a real education on Wall Street and hedge funds. What a difference an hour or so makes!!! Bloody H@@L! DVD is cheaper at www.stockshockmovie.com but it can be rented or bought pretty much anywhere.

  • Comment number 83.

    73. At 5:11pm on 28 Jan 2010, Moncur's Maraudeluders wrote:
    DEMPSTER Please see #55 and accept my apology.

    Accepted.

    You do a good post, don't stop.

  • Comment number 84.

    #12 stanblogger
    "The obvious thing for the Chinese to do is to revalue their currency and to spend a lot of their US dollars before they lose too much value. This would help US and UK recovery."

    That makes perfect sense if you think that the Chinese are behaving like "rational" capitalists. But if you think there is just a 10% chance that they are playing some other game then who knows where we might go.

    I look at China with its transition to its centrally-controlled market economy and wonder how it came about? Did the maoists suddenly have a change of heart? Or was it simply a survivalist reflex? Or a more calculated shift of tactics in their loooonnng game?

    Perhaps China's long-term goal isn't to copy the economic development of the west. Maybe they don't care about the value of their dollars and pounds, just as long as they get more of them to burn? Is it feasible that China seeks to destroy Capital's economic power by exploiting its achilles' heels ... its monetary systems and it over-riding desire to consume itself for profit?

    I'm not into traditional left-right politics, to me its the same old bloody game (in more ways that one) but most people still believe (and most passionately) that their side is virtuous. Did the cold war ever really end or has it shifted underground?

  • Comment number 85.

    I'm not an economist but I could have made identical observations on the UK economy...and in fact I knew there was something going badly wrong when I noticed that almost everyone I knew only existed by continually borrowing....no one (in this high tax economy) was actually earning enough take home pay to live a reasonable lifestyle. This was three years ago.

    Obviously..I don't mix in banking circles.....

    The real problem with the UK economy is that ultimately it is controlled by politicians...not, as a rule, very smart people (or honest as it turned out). That is the one great millstone around UK PLC's neck...and there is no obvious way of changing things.

    This is the factor that will ensure the continual decline in our national wealth and our status....a process that started about 150 years ago I would argue...it's just got worse recently...much worse!

    The real question should be...how do we improve the quality of politicians...do that...and our economy will mend...UK PLC still has great potential!

  • Comment number 86.

    30. At 1:13pm on 28 Jan 2010, Moncur's Maraudeluders wrote:
    If you couldn't sort yourself out during the last 15 years of boom then more fool you.


    I'm sure all those unemployed graduates we, as a society led to believe if they work hard and study hard they will be rewarded with a career and able to pay back their debts will thank you for your wise words.

    I'll assume you've paid back the cost of educating yourself, your wife, your son, paid for all health care any of you have received, every tax rebate, and paid back every penny in child benefit since you feel so strongly about 'spongers'. Good for you.


  • Comment number 87.

    I so wish we knew now what gov will do . My small business could expand if things continue as they are . ( Its about customer spending , not borrowing from the bank !! ) But if taxes rise or there is social unrest , I need to stay put and batten down the hatches . I dont want to ruin myself and my staff .
    If there was a clear , honest and realistic policy in place I would have a better chance of guessing right .

  • Comment number 88.

    69 rvaucbns

    Labour with my heart and my soul,though I think they were in danger of losing theirs.
    Vince with my head, though I actually find him annoying,and who is the other fellow who is supposed to be the leader?
    And the Tories with my baser instincts!But they are wittier, though that is not enough,and thank goodness for Mandy saving us from tedium.
    My heart and my soul win out though on January 31 I will be swithering.
    A Vince vote would be a waste, and a Tory vote a cop-out.
    Gordy with all his faults, is still the one to go for.

  • Comment number 89.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 90.

    Soro's is a genius and everyone in the city know's it. Basically he is saying that there may be a lean year ahead but under Gordon's stewardship we have done the right thing and stabilised the economy. Japan have not achieved that in fifteen years! Well done Gordon, keep it up.

  • Comment number 91.

    the day the gov stops giving out free money
    is the day i start looking 4 a job. (rab c)

  • Comment number 92.

    89. At 10:38pm on 28 Jan 2010, Moncur's Maraudeluders wrote:
    Stop feeling sorry for yourself and get a job, any job, they are out there!

    Pathetic creature.

    I hold a doctorate, co-run a research lab (we are studying testicular cancer among others), I'm still at work and will be here for another couple of hours.

    We've no kids but have surprisingly noticed that those unfortunate enough to be unemployed for whatever reason are referred to as spongers.
    We've also noticed that every single family in this country has been given a benefit called Child Benefit.

    Benefits for all, or none at all. Venom and name calling towards the unfortunate, or in the wrong direction is a convenient distraction from the real problems. The rich and powerful would prefer we do so while they make off with the loot.

    We are in an economic mess. We can choose to blame the poor or we can deal with the culprits appriopriately and clear up the mess as best we can.

    I'll check back later for your apology.

  • Comment number 93.

    84. At 8:43pm on 28 Jan 2010, errumm

    I've often asked myself that question. A bit like the Reagan arms race, forcing the Russians to spend everything they had all the way to ruin.

    I wonder...

  • Comment number 94.

    #93 Copper Dolomite

    No apology from me. your post lacks any content except a sloganistic " The Rich Are Bullies!" and I am sure you would have sold SW outside your uni if the weather was nice.

    Have you got to that important stage in your research where you find out where they are and what they look like?

    I'd suggest looking at xxy/xyy mutations and take the first sample from yourself.

    Your post had nil content, zero constructivity and suggests you probably did your doctoral thesis on the "Crime" of MMR.

    I also suggest if you wish to proselytyse on a public forum you try reading something with bigger words than AG, PB or C.

  • Comment number 95.

    #93 Copper dolomite

    Oh! Its the CHILD benefit that ticks you off. Not that it is irrationally given to anyone that has procreated whether they are in need or not.

    Its just that its a REWARD for having children.

    Sorry! Didn't spot your hang up.

  • Comment number 96.

    Moncur's Maraudeluders
    95

    You've a raw nerve and it shows.
    What ticks me off is your use of derogatory terms, and lack of compassion.

    Keep at being personal and derogatory. I will continue to pay to help those who require help and never label them.
    With 104 years of paying PAYE between you, I'd estimate your age beginning to affect your health, and I'll gladly contribute to that too with no complaints, or resorting to derogatory terms about the needy, aged folk.

    Good night.


  • Comment number 97.

    29. At 1:13pm on 28 Jan 2010, onward-ho wrote:

    "Onward-ho says, as for what Soros says, he would wouldn't he!"

    Onward-ho the property profiteer would say that would`nt he?

    Meanwhile:


    7.7 million of these are economically inactive
    7.2 Million work part time
    6.65 million work in the public sector
    16.7 million in full time employment in the private sector.
    Subtract the low-wage,low tax(even subsidised)"Macjobs" from that 16.7 million.

    30. At 1:13pm on 28 Jan 2010, Moncur's Maraudeluders wrote:

    "Good years, bad years, good decades, bad decades."

    In no previous decade was the financial standing of this country so pathetically dependent on USSR-esque state subsidy.

  • Comment number 98.

    RE:97

    Except for the 1940`s/50`s when we were destitute after fighting the War To Make The World Safe For International Debt-Enslavers And Communists.

  • Comment number 99.

    You betcha the outlook is bleak.

    The banks (even the ‘nationalised’ ones) have no allegiance to the UK. They all see themselves as global, and would far rather be splashing money about in currency trading, investing in the far east and the currently-trendy Bric nations for fat profit, than scratching about in a moribund UK.

    If we want to dig ourselves out of this hole and avoid a wasted decade, we need comprehensive change in the way we run our economy.
    Every single (management) person working in the private sector knows that the only hope for future prosperity and employment for the UK, is in exporting our high level skills and products.

    Since we can't be bothered producing enough food to satisfy our decadent taste-buds, we are always going to carry the heavy cost of these imports; we have also wasted the oil bonanza and are going to have to import energy. (a million little propellers won't do it)

    We are going to have to live with a debased currency, so that our exports are cheaper in foreign markets. Of course the downside is that our imported raw materials will cost that much more. If we can also source raw materials locally, so much the better; we have to look exactly at what resources we have within these islands, and plan accordingly.

    So, on top of design innovation and superior engineering skills, how do we lower our costs so we can export and compete against third world cheap labour?

    You can reduce government waste, duplication and red-tape by a huge amount, assuming there is any talent and commitment within the corridors of power. That should lower the tax-bills significantly.

    But it seems to me that we need a wholesale taxation revolution.
    We need to lower the 'UK' cost element of the exportable goods.
    That means income tax, business rates, corporation tax all have to be lowered –or removed, and the revenue accrued from somewhere else.

    I am not an accountant or economist, so someone tell me how to re-apportion the following taxes ~Income Tax, NIC, VAT, Corporation, Council, Business rates, Liquor & Tobacco, Property & Land, Fuel, Capital Gains, Offshore, one-hit Banking Sector taxes, ……………….
    I am sure there is a logical and enervating way to do this.

    Regards,

  • Comment number 100.

    Soros is right for the wrong reasons. He looks upon the Uk as a bad place now to invest in. Most of the rest of us look at the UK as a bad place now to live in (relatively speaking to other developed countries of course). The UK has for a long time been a country where average workers are exploited by the self serving actions of politians, bankers, estate agents, public servants...we pay far too much for too little and have little recourse to correct things. Soros was happy with that as he could make money out of a cash cow and in his way contributed to the self deluding dogma. Now we have been actually betrayed by our politicians and bankers and are going down fast its simple for him to regard us as a bad risk but no way can he abe allowed to think it wasn't down to him too.

 

Page 1 of 2

BBC iD

Sign in

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.