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agc3167

Listed below are comments made by agc3167 between Monday, 23rd March 2009 and Friday, 10th July 2009.

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Does Europe need hedge funds? 06:17am on 10 Jul 2009 As someone who has worked in a company which was taken over and "turned round" by PE then I can only wonder that what was done was legal before and can only cheer any attempt to make things more difficult in future.

To buy a basically healthy company, strip out the cash and saddle it with the debt used to buy it, install a management team from the PE firm at excessive salaries to be paid by the company, sell off what can be sold for a quick profit, stop all capital expenditure and anything that doesn't show immediate profit (i.e. kill R&D), float the company on the stock exchange and keep the proceeds (having once again emptied the company coffers) and claim the business has been "turned around" beggared belief. To cap it all, following the float the new board left before their contracts were up to return to the PE firm and, according to the contracts imposed by the PE firm at the beginning, were then entitled to multi-million compensation payments.

The company in the meantime was floated with no cash and had to arrange emergency bank loans at horrible rates to be able to pay the staff wages after the float.

If this is the sort of behaviour that will be made more difficult then why is anyone complaining?
Decoupling Redux? 07:09am on 09 Jul 2009 Just one question, how much of the chinese growth is real growth and how much is simply government spending, which is ultimately a drain on real economic growth?
A cuckoo in the stock market? 12:01pm on 06 Apr 2009 A cuckoo in the stock market? Sorry but I don't think you've even got the right class of animal. Try the attached link, it's a tad old but still relevant:

http://www.ameinfo.com/16529.html
Bringing it all back home? 05:54am on 03 Apr 2009 #17 & #18

Unfortunately I can only agree with you. What has the G20 achieved for the UK? As far as I can work out we're actually going to give more money away (to the IMF).

In the meantime my biggest customer has a review of spending today, where they want to further cut the budgets which were reduced to almost zero 6 weeks ago. With the previous cuts I was hoping to just make it through this year. This afternoon I expect I'll find out just how bad it will be, just in time for the weekend.

In the meantime 4 other people who I also work with and know well have folded their companies this week.

Saved the world Mr Brown? How about saving the UK and not just its' banks?
The economic leadership award 05:58am on 31 Mar 2009 The whole point of Bretton Woods was that the dollar served as the worlds reserve currency AND WAS ITSELF PINNED TO GOLD. The US did not follow the rules and ultimately Nixon got rid of the gold standard to devalue the dollar to pay for Vietnam. The value of the dollar in real terms has been falling ever since. Interestingly, a loaf of bread costs approximately the same in gold as 100 years ago, while the dollar price has risen over 90 fold. This is not what is required from a reserve currency and makes a prime case for the SDR or whatever it will be called to be gold or at least commodity rather than currency backed. This was also the basis of Keynes system.

I for one would welcome some sort of ultimate currency whose supply is independent of national politics and cannot be increased by adding afew zeros in the computer. This would make global trade simpler and prevent countries such as China holding their currency below the true worth. The dollar is most definitely not that currency.
Gilts and guilt 06:20am on 26 Mar 2009 Grimupnorth and GluminLeics,

as a self employed person I can only agree with you. The problem is not that there is no work to be done. The problem is that companies are not prepared to pay to have the work done at the moment and keep pushing it backwards to save cash. It's understandable, just not very good for me.

I have 18 months of potential work, but so far employment till just after Easter with little real hope of making it to the end of the year. Even then, I expect 2010 to be just as bad or worse. So much excess capacity was built up during the boom years and it will take more than a year to reduce it to the new level of demand. At least my business is just me so I don't have the pain and stress of watching employees go down with me.

I wish you both all the best
Gilts and guilt 06:06am on 26 Mar 2009 While I can understand the general cries of doom & gloom about the economy, I also have to ask myself who would actually buy a 40 year Gilt today when interest rates are minimal and inflation is just around the corner? The chances that the money you get back (interest + coupon) over the 40 years will be worth anything like the money you pay today is vitually nill.

Given this, I ask myself how on earth did they manage to sell so many?

Far more worrying is the response to the US 5 year issue.
The devil's not in the details 06:07am on 24 Mar 2009 "If you start from the position that banks cannot be allowed to go bankrupt, and they cannot be nationalised, this may be as good a scheme as you are likely to get. The problem, as I said at the start, is not the detail but the basic idea"

EXACTLY!! The basic idea that banks cannot allowed to go bankrupt is WRONG. Once the banks are given this tag then they just sit pretty and wait for the taxpayer to pick up the bill. Look at the car inductry, capacity cuts, works closures, wage cuts - all so that they can cut costs and survive. Where is the equivalent from the banks? Cut costs? No we'll have bonuses thank you very much. Early on we saw asset sales as banks realised how bad the situation was but since bailouts arrived - nothing.

The latest scheme should not be a blank cheque for the banks. They should be offered the chance to sell at a price of 5 cents in the dollar (I have read that Lehmanns toxic assets were sold for 10 cents in the dollar and still lost money), and if they refuse then let the market decide what happens. The banks loss should not be tax deductable in future years and any losses incurred by the tax payer should then be paid by the bank in additional taxes over the next 10-20 years. I think the banks would still fall over themselves to sell as they would have to realise that there is no alternative.

Once the dust has settled then we need a compensation scheme, paid for by the banks, big enough to ensure that it can handle the costs of any bank going down. Otherwise, chop up the big banks to bring them down to a size where they can fail.
Europe's trouble 07:50am on 23 Mar 2009 LibertarianKurt # 41

I believe so as well. It is interesting to note that many German analysts follow Austrian economic school theory (perhaps unsurprising considering they are so close) and it seems to be mainly the politicians and their advisors who look to Keynes. Perhaps this is because the Germans have had 2 doses of Keynesian thinking in the last century to destroy the currency. Keynes is fundamentally flawed in this situation as it assumes the public purse is unlimited (whereas ours will become only too limited as things progress). However the politicians look to Keynes as the Austrian school tells us we are headed for disaster and that's the last thing to tell the electorate.

Given such recent history in a country very close by perhaps the proverb for the UK should be "Wise men learn by other men's mistakes, fools by their own"?
Europe's trouble 05:36am on 23 Mar 2009 The ECB will not be allowed to start QE, it would be the end of the Euro. The Germans have very bad memories of QE, followed by hyper-inflation and the destruction of the currency.

Never mind Ireland or Spain trying to leave the Euro, if the ECB tries QE the Germans will be pulling out and without them the Euro is destroyed as a hard currency.

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