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Listed below are comments made by Dave_NW between Wednesday, 1st April 2009 and Wednesday, 2nd December 2009 (12 Hours Ago) .

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A bubble, or 'stubble', of our own design 12:01pm on 02 Dec 2009 "Have we reduced the pain caused by the pricking of the mother of all financial bubbles by creating a new financial bubble?"

Taking a simplistic view, that seems very likely. Considering that we can be certain that there is less credit available to all, there is no logical reason why house prices should rise from what were already historically high levels. Energy and share prices seem to fluctuate wildly due to speculation rather than demand (anybody care to explain why else share prices in Dubai property companies would rise (even temporarily) following the recent events in the region??). BoE members getting nervous in public suggest that they really don't know what the outcome of QE will be. I suspect it will deliver no benefit in the long term, but plenty of pain. When has it ever proved otherwise?

All of the above sound like the makings of bubbles to me...
Why are companies not borrowing? 12:42pm on 09 Sep 2009 As I've suspected for many months now, this situation seems to be breaking the "Law of Requisite Variety". Put crudely, this law states that the controls of a system must be at least as complex as the system being controlled. If the controls are too simplistic, you won't be able to achieve the outcome you want.

So, using the example of quantitative easing, the government observed that banks were not lending money to businesses so, in order to increase the amount of money available for lending, they decided to print some more (put in very simplistic terms). However, this action on its own was not enough to achieve the outcome they wanted (to get the banks lending some of this newly printed money). Instead they simply took the money and sat on it. In terms of the Law of Requisite Variety, the control the government applied to the banking system was not sufficiently sophisticated to dictate the behaviour of the overall financial system and get the outcome they actually wanted.

As Robert observed, companies are not borrowing and there are several reasons for this (rather than just one: the quantity of money available in the system). More complex and sophisticated controls must be applied to this system in order to achieve the required outcome.
Executive rewards, for what? 12:38pm on 09 Jun 2009 "...there's evidence from Wall Street that the big bonus culture is waking fairly rapidly from its short slumber over there".

No surprises there. What amazes me is the level of naivety displayed by governments who hand over huge piles of taxpayers' money to shore up banks on the expectation that they will somehow "do the right thing" (i.e. lend to taxpayers who need it, refrain from handing out colossal rewards for failure). In truth, the banks see the pile of taxpayer cash not as a sacrifice for the greater good but as just another source of funding open to them which enables them to remain in the black and pat themselves on the back for a job well done.
BT: Self-inflicted wounds 1:15pm on 14 May 2009 I thought BT was long ago acquired by a german telecoms company. This may explain why it is cutting so many jobs in the UK (rather than in their own country) as foreign-owned multinationals like to in times of recession.

As for the £33bn hole in the pension fund, I'm not sure that annual payments into the fund for three years of £525m will quite fill that gap. Whilst the sums may be simplistic, this does rather smack of an organisation who is putting off that problem for another day (and another chairman with their neck on the block).

Not that I want to sympathise with BT. I've been amazed at the contempt with which they treat their customers (if you don't know what I mean, check your next BT home phone bill and look for any spurious "one off" charges they might have dreamed up). Just like any privatised utility with a relative monopoly, they won't improve until they are really threatened by serious competition.
ITV: Change of cast 10:42am on 23 Apr 2009 "A tantalising question is whether in the inferno of an advertising meltdown, the government and competition authorities would abandon their opposition to the creation of a super-broadcaster formed by the merger of ITV with channels Five and 4."

I'm alarmed at how readily competition rules are thrown away when financial problems persist (just look at the HBOS/Lloyds TSB merger if you want to see how badly wrong this can go). Yes, ITV is having problems but (apart from the BBC) who isn't? The one thing I can virtually guarantee is that, if ITV, Five and 4 were to merge, the result wouldn't be a "super" broadcaster. Standards across these channels (and most others) are already woefully low. What sort of programming could we expect? MORE talent shows? MORE home make-over shows? MORE Nazi sharks? Some grotesque combination of the three? Ooh, I can't wait...

It would be like slow cousins marrying: never ever a good thing for the longevity of the species!
Should the banks back Britain? 12:07pm on 07 Apr 2009 I remain baffled as to why there is so very much being read into so very little evidence to support any of the claims made in this article or a great many published elsewhere. Ever heard of "Occam's razor"? This says that, all things being equal, the simplest explanation is usually the right one. In the case of banks, they took taxpayers money and kept it for themselves so that they could at least appear profitable on paper. They then clawed back every penny they could from creditors good and bad to cover any losses (or even any risk of losses). They have now decided that maybe they should lend again, but on a small scale and to whoever appears the most creditworthy (British or otherwise).

There is no question of nationalism here: a bank will only lend to the "dead certs" of this world, regardless of their geographical location. There is no point in us non-bankers navel gazing about this. The bankers certainly aren't!
A cuckoo in the stock market? 12:09pm on 06 Apr 2009 A recession which is over before it's begun? Now that really is cloud cuckoo land. I doubt that the impact of pumping trillions into failing banks stops at the closure of Woolworths and a brief decline in house prices.

It may be over for those who don't pay UK taxes, but for us mere mortals it hasn't even started. What I want right now is to stop hearing Gordon Brown going around telling people what a hero he's been through all this. Only time will tell whether he's been a hero or not (in the same way that time told us what ten years under his stewardship as Chancellor achieved).
RBS: Stop the flogging 11:24am on 03 Apr 2009 "Sir Philip told me he believed his predecessor's decision on Sir Fred's pension was "taken in good faith,"".

I don't think any decisions about my pay or pension has ever been based on "faith", good or otherwise. At what pay threshold can I expect my remuneration package to be plucked out of thin air and offered with a nod and a wink?
G20: The big money decisions 12:11pm on 02 Apr 2009 Let's hope that "agreement on the big money questions" doesn't translate to "hold another conference at some unspecified future date" out in the real world.
G20: Sticking plaster not cure 12:36pm on 01 Apr 2009 "A return of near-normal credit conditions would probably be significantly speeded up ... if the bad bits of banks were in effect transferred to the balance sheet of the world as a whole".

I like this idea very much simply because it will affect every nation, indebted or otherwise. By spreading the pain of the recent bubble across the entire globe, prices should stay down. If one nation cannot afford to pay any more than any other for oil (for example), the price should stay at an affordable level.

Do I think this will happen? Not a chance in hell! No country capable of riding out this recession without racking up absurd debts would volunteer to share this pain, no matter how noble such a sacrifice would be.

We can't sweep bad debt under the carpet by simply taking it off the institutions which created it. It will remain a very large elephant in the room for a very long time, and no amount of suicidal government expenditure will make it somehow go away.

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