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Mad_Mad_Max

Listed below are comments made by Mad_Mad_Max between Monday, 2nd March 2009 and Tuesday, 5th May 2009.

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BAA: No margin for error 8:27pm on 05 May 2009 "BAA: No margin for error" Now then Robert, not becoming sheepish are you? Good header though, good to see you have a sense of humour. And my God! Don't we all need a sense of humour given the state of play.
Cleaning up bankers' mess 6:15pm on 03 May 2009 Nicely reported! Did you know that radio 2's Ken Bruce has lost money in the stock market? Well he is saying that every time you appear on telly the stock market falls. Yes no bull, I'm afraid these are the bear facts.
Should the banks back Britain? 11:38am on 07 Apr 2009 State owned banks can lend recklessly because their owner requires it. The moral hazard is now well established with them and these banks will do as their owner wants knowing they will not be allowed to fail.
G20: Sticking plaster not cure 1:39pm on 01 Apr 2009 A super commodity underpinning economies is the holy grail of economics. In theory it can exist but in reality it never will. The nearest we have come to it has been property based securitization. Perhaps the real question for the G20 is how can we make securitization work better and more reliably than it has done? I feel they are going to throw away the baby with the bath water.
The end of a retailing era 1:43pm on 31 Mar 2009 I think that sums it up nicely. Well done! Don't forget Richard Branson has applied for a banking license too. I would like to see you bat down anybody who says the banks were too greedy. They were not, they simply took advantage of a mechanism that allowed them to turn lead into gold to refinance their lending. It was good business and the government should have constrained it.

Bank alchemy is no longer in use so their profits must come from doing things properly. They take account of the risk associated with lending and price it accordingly. What the government and the BoE will not discuss is that all their efforts are just a stopgap to provide a soft landing to harder times.

The BoE was nationalised in 1947 because the socialists argued it was doing things just too properly. What we have now is the end game on this ideology. People have maxed out on their credit; they are going to be taxed until the pips squeak and lifestyle economics is just going to be a wet dream that society once had.
We are the monolines now 1:34pm on 23 Mar 2009 Yes I agree, GDP is the underlying asset of governments acting as monolines. The difference this time is that as far as we know there are no novel mathematics of probability associated with this AAA government debt.

However, the reason why the original monolines were so successful is that the mathematics based itself on evidential long term stability. It also assumed that finance company products would be sold responsibly re-enforcing the long term position. It really was a win win situation that could not go wrong hence the AAA rating.

With the UK government constantly crowing about sustainable growth, the best for two hundred years, it gave credence to and re-enforced the assumptions of the mathematical models.

I sense your reservation about government AAA debt. It is based it seems on nothing more than the same optimism that caused the original bubble to grow. Is it reliable? I think so given the long term evidence.

However, it is public finances, the cost of running the states infrastructure, a cost to nations that will undermine credit ratings if allowed to grow too big. At some point somebody will have to cry enough and it won't be the electorate nor the government.

It will only take a political prick to burst the bubble for us to see a cascade of failing economies reduced to borrowing from an already overstretched IMF.
HBOS: Strong men will weep 1:53pm on 12 Mar 2009 There are a lot of questions in your post that suggest mathematical probability should be used to answer the questions. Rocket science in other words.

The use of interest rates to control inflation is a negative feedback closed loop system that dampens the output effect of change back at the input on a fail to safe basis.

QE seems to be a positive feedback system. Incremental changes will take place at the output until a change is seen at the input. This change will add to the input change and the output will increase exponentially. It is a fail to unsafe system.

Some military aircraft use positive feedback wing systems to give improved performance. They are computer controlled as this is the only way to make them stable.

Given the BoE has no experience with QE it must be relying on real time computer modelling to control events. The test will be whether the economy can be dampened soon enough when that critical change occurs?

I think perhaps we have global Treasury bubbles in the making. It will take only one of them to go before the others follow.

Keep a weary eye out Robert your efforts may just help keep us all ahead of the curve.
Nationalism may impoverish us 5:06pm on 10 Mar 2009 A fine piece on the laurels of intelligent reasoning and altruism, but then you are not going to be out of a job or out of your home any time soon?

We will see a global value analysis that will reduces functionality down to its cheapest implementation. Why import when you have a natural resource that can be exploited both economically and politically?
What am I bid? 2:37pm on 09 Mar 2009 They could play spot the villain?

http://www.iaca.net/Software.asp

Or they might choose to track contact relationships between opposing parties, their politicians and journalists?

Will they get Nicked?
The spirit of Churchill 7:53pm on 02 Mar 2009 In Obama's inauguration speech he says:

"In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying camp fires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

"Let it be told to the future world... that in the depth of winter, when nothing but hope and virtue could survive... that the city and the country, alarmed at one common danger, came forth to meet."

The common danger was GB. The President chose his words carefully. He did not want to be regarded in anyway as Kenyan and a British colonial lackey but an American patriot. Perhaps GB will receive a frosty reception after some honest questions fail in reply as honest answers?

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