Nationalising Tories
If there was even a scintilla of doubt that we're in a very painful recession, that doubt must be eliminated by the release today of statistics on manufacturing output and industrial production in November.
These were truly shocking.
The seasonally-adjusted output of all UK production industry in the penultimate month of last year was a staggering 7% lower than in the same month of 2007.
For the smaller group classified as manufacturers, the fall was even worse, at 8% year on year.
Of course it's true that industry is not as big a proportion of the British economy as many would like it to be. But it contributes around a fifth of our entire economic output.
And that fifth of the economy is contracting at an annual rate of 8%.
The picture is even more alarming when examining the manufacturing figures in more detail, and looking at output in the three months to the end of November compared with the previous quarter.
There were falls in 12 of the 13 manufacturing sectors. Worst hit were wood and wood products, which was 6.7% lower in that quarter; transport equipment, down 5.7%; and basic metals, also 5.7% lower.
Only the relatively recession-immune food, drink and tobacco sector recorded an increase - though its rise was an anaemic and statistically insignificant 0.4%.
As for the 77% of our economy that's represented by assorted services: well, many of those - such as our banking and financial businesses - are in a conspicuous mess.
That said, the pre-Christmas hysteria about the meltdown of retailing was overstated (though the shopkeepers have themselves to blame for this hysteria, with their characteristically neurotic seasonal gloom about their prospects).
The true story of non-food retailing is that it was generally bad in the run-up to Christmas, but lethally bad only for a few. Those stores perceived to offer staggeringly good value performed better than the rest (yesterday's figures from cheap-and-cheerful Peacocks were particularly impressive). And food retailing was the exception to the generalised fall in sales.
However, forecasters who have been estimating that the UK economy contracted by an unpleasant 1% in the final quarter of last year may turn out to have been optimistic.
But to return to manufacturing for a second, this country will pay a heavy price for years to come if this economic contraction leads to a permanent loss of firms and productive capacity.
We've learned to our cost the perils of being exceedingly dependent on growth from the City, from financial services. It would be a double indignity if an economic crisis created in the financial sector should wreak the most harm on manufacturers - and make our economy, and our prosperity, even more dependent on services.
So it's more than a small mercy that those horrible job cuts announced yesterday by Nissan are being implemented in a way that should not lead to an irreversible loss of skills and shrinkage of its manufacturing potential.
Even so, there's a role for government, to prevent the chronic shortage of credit in the economy - which is the precipitator of our misery - from wreaking devastating harm on viable firms.
The Treasury has already announced taxpayer guarantees to support £1bn of bank lending to small businesses and a further £1bn of working-capital finance for small exporters. And it's working on a more substantial scheme that would involve taxpayers sharing in the risk of much more lending to companies.
What's finally announced won't be trivial. But the Tories complain that the government has been too slow and unambitious in providing such succour.
The shadow chancellor, George Osborne, today called for a three-pronged strategy to stimulate the flow of credit: state insurance for £50bn of lending to business; a cut in the cost of the capital that's been provided by the Treasury to banks and also a reduction in the fees levied for guaranteeing interbank lending; and a new Bank of England facility to swap corporate loans for cash.
This would amount to a substantial extension of the nationalisation of the credit-creation process - and Osborne acknowledges that more draconian nationalisation may yet be necessary.
It's quite something when the Tories complain that a Labour-controlled Treasury is being too cautious in rolling back the boundaries of the private sector and too feeble when pumping up the role of the state.
Update: Apparently I was the only person in the UK who had never heard of Sportacus. My shameful ignorance ended yesterday when I met this rock-solid pillar of the crumbling Icelandic economy on Simon Mayo's 5 live show. Click below to see me going to LazyTown.
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In 1997 the Labour government stole the tory government from under their feet, is the reverse about to happen? Labour have been left with NOWHERE to go, they are O.U.T, and you?ll be lucky if they EVER get in again Peston!
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it's time to discard the rat race mentality and dependance on materialism that the modern world has become, which is a good thing really
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Why do the government not give loans/grants directly to businesses?
They have given billions to the banks which has not achieve anything for anyone other than the banks. Furthermore, it is hardly likely to. If the government loans to the banks at 12% then if would be a fool that lent that money out to business at only 2%!
The prospect of "Quantative Easing" is a further move in the wrong direction. Everyone knows that this is nothing more than printing money in effect. However, Quantative Easing gives that money straight to the banks - again! They would be better off not being so deceptive and admitting to printing money, and then using the money for business grants and public works spending so at least us ordinary people see some benefit of it!
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It would be so much easier if Flash just paid off everyones debts so the bubble can start again, I am sure China, Japan and Germany would be happy to chip in, as we are no use to them the way we are now.
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Ouch. This news puts the complaints about the 'realist' contributors (or, negativists) into a proper perspective doesn't it?
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Mr. Peston cannot help but betray his own political allegiances when commentating on Tory policy. Don't get me wrong, I am no massive fan of Cameron and co., but I for one am glad they are abandoning out-dated political mantras to try to find creative solutions to this crisis. Particularly as they are likely to be running the Government within the next 18 months. I also agree with all three of the measures outlined. Does Mr. Peston have a view other than they are bit rich coming form the Tories? It would be nice to know.
I'm also afraid that blaming the gloomy retailers he spoke to for calling Xmas sales so wrong is also rather lame. As for only the "staggeringly good value" retailers doing well. John Lewis? Sainsburys? I don't think so. He's talking to the wrong people maybe, or only taking notice of those who express a gloomy view.
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##1 "Labour have been left with NOWHERE to go, they are O.U.T, and you?ll be lucky if they EVER get in again Peston!"
The trouble is people forget as they forgot what happened the last time they were in, unfortunately I do not see a Margaret Thatcher this time round.
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The shadow chancellor, George Osborne, today called for a three-pronged strategy to stimulate the flow of credit: state insurance for £50bn of lending to business; a cut in the cost of the capital that's been provided by the Treasury to banks and also a reduction in the fees levied for guaranteeing interbank lending; and a new Bank of England facility to swap corporate loans for cash.
Is the provision of state INSURANCE for banks lending to business Nationalisation of the banking Industry? NO
Is a cut in the cost of capital (currently 12%) being provided bythe government (no change in equity swaps) Natioanlisation of the banking industry? NO
Is a reduction in the cost of fees levied for guaranteeing interbank lending Nationalisation of the banking Industry? NO
Is a facility to swap corporate loans for cash nationalisation of the banking industry? NO
Someone is talking out of their backside and it ain't me!
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I fear the British government will struggle to borrow all the money it needs.
From an article in the Financial Times on 8 January 2009:
?A German sovereign bond auction failed yesterday, as investors shunned one of the safest and most liquid assets in the world, in a warning for governments seeking to raise record amounts of debt to stimulate economies. Britain is planning to raise GBP 146bn this financial year ? which is three times more than last year?.
Despite what Alistair Darling says to the contrary, it is looking increasingly likely the British government will eventually resort to printing more money............with all the serious economic risks that entails.
However, on the other side of the fence, some economists say this crisis will not be beaten by ?restraint?.........
Individual economies contain competing forces, and only time will tell which forces turn out to be the stronger. What works for one country may not work for another. The USA may be able to get away with printing money, as the dollar is the world?s reserve currency and accounts for a very large percentage of the world?s foreign exchange market.
Britain, although experiencing similar economic problems to the USA, may not find the same policy of printing money to be successful, given that sterling only accounts for a small percentage of the world?s foreign exchange market.
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Robert,
Manufacturing cannot recover with the pound at such high levels against Asian currencies.
Yes - High Levels.
We may have crashed against the Euro and against the Dollar (not so much of the latter), but not materially against Asian currencies.
No UK manufacturer can compete at anywhere near current levels.
We need a major Sterling devaluation against the Chinese Yuan.
Until that happens, underwear manufacturers, cup manufacturers, furniture manufacturers, etc, etc, etc will continue to close UK production sites and transfer production out to Asia, and UK manufacturing will get smaller and smaller.
This required devaluation will cause major inflation in the UK, short term shock (!!) and disruption, but will save this country. Without this shock, we are gone for 70 to 100 years.
Bring on the Yuan-Sterling devaluation 30% now !!
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Talk of nationalising the banks is just hysterical stuff.
However, the government needs to get its finger out in supporting and funding credit flows. It is now three months since the bank bail-out and credit is still frozen.
Osbourne is right in his comments although he has been very slow on the uptake. He doesn't sound very connected to business in any way shape or form which is odd given his family background in shapes and forms.
What we have to accept is that we are still in the early days of the recession (slump?). The banks were obviously hit first, then came retail and media, now we are further up the supply chain and eating at the really serious bit of the economy. It won't end there either.
Until credit flows are restored the asset crash will persist, the economy will contract and government income fall. In its own interest the state has to get the credit moving but it seems quite impotent.
The need for a smaller, more effective state is now proven in my eyes.
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Industry accounts for 24% of GDP.
A fall of 7% equates to a drop in GDP of 1.6%
1.6% was Captain Darling's prediction for GDP contraction for all of next year before recovery lifts us into sunlit uplands.... etc etc
1.6% a month is equivalent to c. 17% per annum.
Thank God we are "best placed to whether the global economic conditions" or whatever our Glorious Leaders claim.
I suppose there is one gem to all this - the situation will get so bad that the more the BBC and their ilk fail to point out the shortcomings and malfeasance of this government then the greater their fall from grace will be. If the Labour party lost an election now they may survive; continuation in office could see their eradication.
Then again it is possible that Peston and the other government apologists are closet Tories working from the inside...
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Don't worry Robert you're not the only one who knows nothing about 'sportacus'. On more gloomier note, it really looks like we're falling off a cliff here. It seems unlikely that the long ignored manufacturing sector is going to drag us out of this mess. I just don't think that many our manufacturers are capable of handling a prolonged collapse in the economy. Won't be long before we see 'tent cities' emerging on the ravaged outskirts of our once great cities. Well may maybe not, mmmm on second thoughts you just never know...
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#1
"In 1997 the Labour government stole the tory government from under their feet, is the reverse about to happen? Labour have been left with NOWHERE to go, they are O.U.T, and you?ll be lucky if they EVER get in again Peston!"
Unless Crash manages to pull something dramatic out of the bag - a war that we win anyone? - thsi shower are heading for an electoral meltdown on a larger scale than the Tories had in 97 - I could see about 100 Labour MPs left after the next election.
I wonder who all of the trendy, pretend socialists will vote for now?
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#1 I agree that brown and co have made a right hash of the economy, but if you think that wet behind the ears Cameron, baby face Osborne and their cronies can do a better job then you are seriously deluded.
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Robert whenwill yopu and James Naughtie (hope thats the right spelling), and in fact the rest of the BBC staf, just give up and wear bright neon shirts saying "Labour Spokesperson" .
the saddest thing is that all credibility of the BBC is rapidly out the window, very few people either Labour supporting(glad of the fact) or Tory, or Lib Dem or not aligned (basically everybody except those a the institution still trying to kid everybody) believe the BBC is anything but an apologist / mouthpiece for the Labour party, its both pathetic and sad all at the same time.
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Robert, I hope you show more reverence to Brownacus than you did the star of Lazy Town. After all Brownacus really is the saviour of the human race (And not Lilly The Pink as some believe).
He can out jump, out summersault and do more U turns than Sportacus ever could. And if the massess can't believe that: Brownacus says he can, so it's true.
PS Will this be intercepted by HMG?
Don't want a visit from the e-mail police.
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What's the short-medium-long term plan from the Labour Party then RP?
Keep plodding on as usual in the face of everything and hope it all 'comes good'?
Any word on where we're going as a country?
GC
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So who is UK's Sportacus, Alistair Darling or George Osborne?
Who is USA's Sportacus, Joe the plumber or Obama?
Wall street's Sportacus, Madoff would be behind the bars soon.
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7,
What you may see here is a short Tory tenure followed by a Miliband labour one, watch this space (Things ARE that bad). I say this because the public may lose patience with the time it would take anyone to sort this mess out!
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Perhaps Mr Brown likes things the way they are, false mumblings that they will make the banks lend more and reduce rates. Maybe he wants them to keep the borrowing rates high and pay those "Savers" who he seems to despise, dirisory rates. Let the banks build up their funds nicely from funds he cannot usually get to, the prudent majority who dont spend for spendings sake. He can then have his money back and his beloved taxes from the banks.
This Government will do anything to save its own skin before the countries future.
Disasterous and getting worse
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They are all very slowly starting to clock the inevitable.... which is that the banks, during the first round of recapitalisation, have simply not been honest about their positions, just as they have not been at all honest throughout this whole debacle (they are just too scared of the mess they have got themselves into to come properly clean), and the only solution is to recapitalise further, if necessary ultimately nationalising them to go for a full Swedish solution.
Companies that mess up to such a large extent really should go bust, except that we can't let that happen to banks, so this is the only solution.
The government will then be in a very good position to organise a completely new financial system, which we desperately need, based around open book/transparent banking.
And shareholders will be careful in future never to go near a bank that does not conduct its business rather more prudently.
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Even if our industries had the cash to operate , they still cannot compete with the rest of the world. Overblown salaries to directors, dividends to shareholders, EU regulations and the demands of the unions see to that. We need a fundemental change to the way industry is run in this country so that an operating profit does not mean attempting to take the customer to the cleaners. Likewise in the retail sector, particularly in electricals and white goods, where the much vaunted " sales " were a non event, with a few reductions on old model commodities and extortionate prices being maintained on everything else. The high street still has to learn that the customer is more important than the size of the profit margin, as is demonstrated when a company announces its profits of £300million are down by 3% and shrieks of shock and horror ring through the media as though the world had come to an end.
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nationalisation is all very well. The treasury has ideas for a bad bank - this has its own probelms.
creating credit is the government's job though; at the end of the day it does print/create the money. The Tories are suggesting the government fulfill its role a little better.
Having said all of that I worry that the world may pick choose bad country rather than a bad bank.
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It's no good giving out more credit if we are not competitive - its like backing a 100/1 shot at the start of a race and then when it is last and gone lame betting some more money on it.
Investment (well targeted) may help but more credit - NO NO NO.
As regards high street spending - of course it held up during the pre Christmas rush - but the credit card bills are in now and there's no stock in the shops.
Interestingly in some ways the property sector has borne the brunt of the slump in that this is where prices have collapsed - if they could get them down another 20% and quickly then this is where the recovery could start - there are a lot of people out there with money who don't know where to spend it who wouldn't really need a significant mortgage if they felt the price was right.
We need a period of adjustment - this will be far less painful if we don't fill the credit void and get on with the pain - then we will hit the bottom and THEN all these billions may come in useful - now its just going down the drain and stopping us falling off the cliff that sadly we need to fall off.
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Robert says:
Even so, there's a role for government, to prevent the chronic shortage of credit in the economy - which is the precipitator of our misery - from wreaking devastating harm on viable firms.
This raises a number of issues
1. Why, in a so-called free country, is there a role for government to get involved in credit creation?
2. How might the government do this given that they have no ability to create real wealth. They merely have controls that allow re-distribution of existing wealth.
3. Surely the creation of fake-credit is the precipitator of ?our? misery. If so, how can government creation of more of the same be the cure? Even if it were, how long would you expect a future boom to last before we were plunged back into a similar crisis?
4. How do you define a viable firm? Presumably you would use different criteria to their non-lending bank.
There is only one solution to this mess. It is to revert to a sound, non-manipulated monetary base and to allow market forces to determine sustainable asset values as quickly as possible.
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excellent double-barrelled blast of gloom there Robert!
whilst some people blame you and other messengers for CAUSING the downturn (a ludicrous claim IMO) I would have to say that, if anything, even now there is still a lot of complacency about just how severe the situation is for the world's economy
a 7% annual decline in UK manufacturing is scary enough but it was 2.9% in November alone if I'm reading the report correctly
you can add to that the figures for Spanish industrial output, which are down a staggering 15% (annualised)
and the US unemployment figure has just appeared: up 524,000 in December and the figures for Nov and Oct adjusted upwards by 50,000 and 100,000 respectively; and they say that the layoffs there are ACCELERATING now; the next 3-6 months are going to be very worrying over there
and the news from South Korea; and the Chinese are apparently sending signals that they feel the need to spend their trade surplus money at home, so don't intend to carry on buying US treasury bonds etc
overall, let's face it, we have fallen off the cliff already and tinkering with interest rates etc are not going to stop us hitting the ground; how much will they slow our speed of impact? nobody knows
but here's one suggestion for starters:
IT'S TIME FOR OUR PEURILE PARTY POLITICIANS TO STOP THE POINT-SCORING GAME AND WORK TOGETHER, IF NOT IN A GOVT OF NATIONAL UNITY THEN AT LEAST IN SOME KIND OF AGREED CROSS-PARTY CO-OPERATIVE MANNER
so bring Vince Cable onto the govt front benches and get Brown and Darling to work with the equally risible Cameron and Osbourne
let them all sit on the small sofa of cross-party love a la Dianne Abbot and Michael Portillo; who knows, it might even help them to think of some workable policies to use in this crisis
IN FACT THINGS LOOK SO BAD THAT I'VE DECIDED TO RELEASE YOUR OIL TANKER, ITS 2 MILLION BARRELS OF BLACK STUFF AND CREW INTACT; and all for a modest ransom of $3m (which I have not deposited in a British bank BTW)
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I said in this blog in August that all the government had to do was guarantee bank loans (following normal due diligence) I still do not see why that is not at least part of the answer
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"Even so, there's a role for government, to prevent the chronic shortage of credit in the economy - which is the precipitator of our misery - from wreaking devastating harm on viable firms.....""""
WRONG WRONG WRONG!!!
There is not the role or a role of government. If a firm is viable then credit is not a problem.
The precipitator of (some peoples or firms) misery is the amount of debt that needs to be paid back not the lack of credit available.
There is a major difference, Robert. Those that have SURVIVED on credit now have to survive on cashflow.
A major role for government would be to ensure in law that ALL invoices have to be paid within 7 days. Problem would then be over for viable and prudent entities
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#27 - I see you've released that tanker so presumably you've got a few more bob available now?
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So manufacturing output has fallen by 8% in November 08 compared to the previous year. If that were true in our case we would performing cartwheels and other assorted acrobatic activities.
We are a SME manufacturer in NE England and I can tell your our corresponding reduction is 38%!
For the year to November our turnover is down a mere 21%, but since we did not begin to feel the full effects of the recession/depression until early last summer we fully expect to rapidly accelerate towards a full year 30% reduction or worse.
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#11
"Talk of nationalising the Banks is just hysterical stuff"
If that's the case, surely it would be a perfect fit with whats been going on for the last while then!!!
So lets get fast cycle on it!!!
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Why would banks want to lend money at very low rates of interest even with a government guarantee when at the same time they are paying 12% on money borrowed from the government.
This is a loss making proposition. If it were me i would hoard my cash in order to pay back the government as quick as i could and in the meantime only make the most safe loans with real margins.
Oh that is what the banks are doing. Lets call a spade a spade. They might be stupid but not that stupid. Forcing them to do so is just a form of price fixing. This never works because fixing the price of a commodity and that absolutely includes money at a level that the supplier cannot make a profit guarantees no supply. Hence low interest rates below a certain point only ensure the government becomes the main provider of capacity and this must print.
Nothing was ever going to stop this deleveraging and we were always going to end up with central governments printing money with gusto combined with some kind of banking nationalisation. It is strange to see all the analysts saying the reason for the 'Great Depression' was the action or lack of action taken by central banks at the time and now confidently telling us all this action now will lead to a different outcome. These same analysts Kaletsky and David Smith etc who could not find their backsides with both hands and were waving away any chance of real problems until now.
Printing money will make no difference. It will simply redistribute pain. Less here more there. It will distort insentive in favour of yet more public spending and compete unfairly with much healthy private employment. In the end the depression will last as long as it takes and life will go on.
What analysts forget to tell us is that previous financial disasters (see 19th century) were tackled with lots of money printing. This idea was rejected in 1929 because they wanted to avoid the mistakes of the past. On this basis next time it will be back to doing not too much.
History will show that today we made different old mistakes.
The big mistake is allowing credit bubbles to grow for political expediency. Brown is a pathetic liar like most politicians.
See Von Mises if you want to fully understand where this is all going.
The job losses have only just begun. This will soon be the only important determinent in most peoples lives. Cheap mortgages versus ripping off pensioners income will become less central as things get worse. Many savers will simply have to use some or all of their savings to maintain their standard of living. Society always repatriates the wealth of savers to some extent in a debt crisis.
Lose Job lose all. Thats where the agony is. It always was, we just forgot.
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What manufacturing needs in this country is a huge mult-billion pound injection of targetted cash. We should be looking to create brand new businesses fit for 2010 t replace older uncompetitive ones and we should be laying the foundations for companies to develop the latest hi technology products that will have global appeal. Forget the X-Factor and Pop ido, we need the equivalent show for new British industrialists and inventors and entrepreneurs with millions of pounds of 'prize money' to help kick start these new businesses. It would help too if we developed these businesses to be successful on a purely domestic level with a 60 million potential customer base. Any export success would be a bonus not an essential part of the equation.
Time also to leave the EU, the billions spent subsidising our competitors in Eastern Europe and putting British workers out of jobs would be better spent doing what i have outlined above.
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There is a fundemental flaw in the approach of QE. This is the assumption that the extra money will get into circulation and not be hoarded by the Banks in order to repair the holes that are appearing through the bad debts of consumers and businesses as they fail.
Perhaps an income tax free month in March will assist in repairing Consumers balance sheets, give a much needed boost to the cashflows of SME and cost about the same. This bypasses the Banks entirely, would reduce consumer debt levels, would encourage those with no debt to spend, since saving rates are uncompetitive, cheer everybody up in time for Spring and promise to do the same in October 2009
If the Government is going to use the tax to encourage lending to us, why not just give it in the first place to the wealth generating areas of the economy.
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The banks were recapitalised and the cost to them is 12%. Until that chnges there wil be very little freeing up of money to anybody as banks get rid of that debt and can make their own decisions. I would be very distressed if the banks did ever get nationalised as this government have no idea how to run anyhing, they are THE KNOW NOTHING PARTY, who have presided over the boom, ignored economists predictions, and relied on other individuals who have no indepth economic, industrial, or commercial nouse. They have had an easy ride so far and the BBC do not help the public who pay for them by presenting them in such a facourable light.
No I am not interested in watching you on whatever it is, the Panarama programme was unenlightening, it was just about you and you are not the news, you are meant to communicate it to us.Do your job and let us have some unbiased reporting.
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DearRobert
You can see it now Gordon Brown on Prayer mat facing WEST,
"America could not give a damn about what is happening here"
Better get used to the Fact, Britain IS on its own.
Its no longer the Yanks are coming, to save the day, its all about charity beins at home,,
The Vicar says, Gord help us,-- my boy,,
we need a miracle, he 's thrown the money lenders to the dogs, and are out of the Temple of the City, --- begging for more and a lisence to print money means only one thing,
back to 1945, and a bankrupt Britain, but this time there will be no Marshall Plan, OR nay bailout.
Only a p45.
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Robert,
I seem to recall that many of your blogs had hints at bad times for retailers...so maybe you were just caught up in the moment. If you listened then you allowed the complacency of those businesses to allow them to reduce their sales and profitability.
You seem to have a strong line on the Treasury but are sworn to secrecy, not really a journalist then. Are you sure they're not just having a blue sky session and seeing what everyone else can come up before they decide upon a policy change because they are clueless?
I caught you on both Mayo's program and the later sports programme discussing football debt and were shown to be absolutely out of your depth although you stuck to your academic line.
Can you find out if this new business scheme will be administered by the banks or some other organisation, I wouldn't want more money thrown after bad...and another option open to the unscrupulous to rebalance their books.
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15, I agree ? I aint deluded but that shower are finished!
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# 5 spur22
Yep, I'm one of those posters that has been consistently in the Eeyore category.
Not because I want to talk anything down, but because so many apolitical, objective commentators (those with credible track records in analysing and forecasting) have been saying for so long that this crisis has all the hallmarks of being the worst in living memory. But not if you listen to the faux wisdom of the likes of Brown, Darling, Cameron, Osborne et al.
No amount of guff uttered by our political elite thus far has convinced me that we're facing some sort of mild, economic hiccup, the end of which we'll see later this year - according to the risible assumptions and forecasts being made by our increasingly impotent, incompetent and pathetic-looking government.
As I've said before on this blog, the UK badly needs a substantial politician to emerge from the shadows with the ideas, gravitas, leadership skills, tenacity and administrative competence to lead us out of this mess. Not one of our politicians currently in the public eye comes to mind, apart perhaps from Vince Cable.
Here's a sound analysis of just how bad things are looking: http://tinyurl.com/9sfyut
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All the politicians are floundering and competing to be good Keynsians with half baked ideas to get us out of this mess. Up to now they have managed to stave off a complete collapse of the banking sector using public funds but we are not finished yet. This crisis has a long way to go.
What RP keeps telling us is that despite very low interest rates that businesses and individuals are finding it very difficult to borrow. The debt bubble has well and truly burst. Asset values are falling and still have further to fall. They were dependent on cheap overseas credit which has dried up.
We have yet to see the knock on effect of higher unemployment on the economy in general ie much lower spending and are only just beginning to see unemployment rise strongly as the economy contracts.
As I have said before we will be lucky to come through this without blood on the streets. It would be nice to see a cooperative spirit amongst our leaders to do what they collectively think is best rather than play party politics. In '29 government made a crisis into a catastrophe. We dont want to repeat that.
Thank you Robert. I care almost nothing about your politics. I am just glad you seem to understand what is happening. Keep keeping us informed!
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At the risk of nit-picking: there's nationalisation with a small n and with a big N. Given we ( the taxpayers, the State) have saved the banks from collapse they have been nationalised. However, they have not been Nationalised: they are still operating for the good of shareholders (who would have lost most of their investment without the State's intervention) rather than the general good. Time for G Brown to stop pussy footing and start talking about the big N.
In the short term we need to try and save as many jobs as possible: in the longer term we need to direct investment into energy production of all kinds, pharmaceuticals, food production, social housing etc. Producing consumer goods to feed consumption via a buoyant retail sector is unsustainable.
A Tory government would take us straight back to laissez faire ( leopards do not change their spots) and look where that has got us; no manufacturing, bust banks, no housing market, no coal, pretty much everything sold off to overseas companies beholden to overseas shareholders
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3.17pm - 2.32pm comments not yet moderated - BBC cut backs or an employment opportunity to celebrate??
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is there a timsbomb ticking under the white collar?
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"That said, the pre-Christmas hysteria about the meltdown of retailing was overstated (though the shopkeepers have themselves to blame for this hysteria, with their characteristically neurotic seasonal gloom about their prospects)."
Ermmm...I can't decide what word I'm looking for. Irony? Hypocrisy?
In article which includes the phrases "very painful", "truly shocking", "precipitator of our misery", "lethally bad", "chronic" and "more draconian" I find it somewhat amusing that you are able to write such things with a straight face.
If the shops say such things, how do we plebians hear of it? Through the media. Who "spice it up" with the above words to try to get an awar...errr the message across.
I know the Beeb website has a red band along the top, but that's no reason to write like the NotW. Let's stick to facts, and leave the flowery writing to the book writers 'k?
Numbers wise, a good, useful piece, but the doom and gloom filler can go.
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I've never heard of Sportacus either!
What is GB doing in Swindon when even David Cameron is visiting Nissan following that terrible announcement yesterday? Ridiculous!
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The pre-Christmas bashing of retail was NOT over-hyped. They made it without enough reserves to see them through the desert of the post-sales period, and the road from here to the summer will be littered with dead and dying retailers. We talk long-term here, and although it's a truism that we're all pushing up the daisies in the end, for some it comes sooner rather than later. Go look at the figures for the last week of the sales, it's gone horribly dead.
I thank the Lord I still have a pension from a certain well-known choccie manufacturer - there's going to be a deal of that noshed over the next few months.
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Well Robert ....
Armageddeon is coming much faster than i thought. only joking things are not that bad.
But figures coming out are more worse at this stage. 524,000 jobs loss in the usa in dec, which will be revised up to around 650,000. so jan 2009 1,000,000 job losses is well on the cards. so since your blog a fairer society. Jobloss outlook for the usa is 80 million now. thats 16 million per 60 million people. a 5th of the usa population = population of uk. as the uk is is to be hit nearly twice as bad as the usa then 30 million joblosses is about correct.
OH DEAR better tell A.D. to start printing that money and fast. this will spread the lack of wealth. and hopefully keep 15 million in low paid jobs.
The 775 billion for the usa stimulus package
will be of little help. dont get me wrong it will get a couple of million into jobs. but how long they last remains to be seen.
Election would be good so we can get a leader who knows whats he is doing,
WORD TO THE WISE GET PLANTING THE VEG YOUR GOING TO NEED IT
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#10
BasaltRocky, I sorry, but I think you have mis-read the currency issue.
The UK will never be a labour intensive low tech underpants producing manufacturing economy again.
However, we can remain a high-value add high technology economy - i.e. like Germany, France, etc.
The issue is that just about every British high-value add manufacturing company or technology company is part of the global supply chain - whereby they all have a significant portion of their supply or own manufacturing base in foriegn climes.
The devaluation of sterling has resulted in the real costs to our manufacturing industry increasing by 25-30% in just a matter of a few weeks - far too quickly for most to react to. Combine this with the volume downturn we are seeing and British industry is in a really dire straights.
The last thing most of British industry and technology companies is for Sterling to be at the current levels, let alone continue to decline.
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I am in China and talking to long standing business relationships, people who are straight with me and I with them (not always the case here sadly)
What is very strange is the acceptance that the Chinese Government has a strategy of increasing their service industries as a percentage of GDP.
When I tell people what a mess that has brought the UK into they are amazed at first but then comprehending.
Like the rest of the world not all factories in China are in a mess and the ones I have visited seem reasonably robust from the figures I have seen. Well run and financed companies making products that people want win in these recessionary situations.
BTW over dinner one night I asked what people thought BBC meant. One though the Brown etc etc and he was serious. Great laughs all the way round at first but then we comprehended. It really is not funny.
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12.
The 7% figure is Nov '08 v Nov '07.
If that were replicated every month for 12 months it would be a 7% annual fall. If the rest of the economy were flat, then the annual rate would indeed be c.1.6% and Darling would be a genius. (But it won't be flat and Darling isn't a genius).
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Although i have been critical of the retail sales reporting as being too gloomy these figures are truely shocking indeed.
If the country is going rapidly into further debt then lets hope some of this is to protect and enhance our manufacturing base.
Would be a bit of a problem paying of the national debt if no jobs left in industry!
I don't expect the tories to go the whole way and admit arthur scargill was right but what we have remaining is as a result of pure capitalism of short term profitabilty rather than a structured government policy on the wider economic and social aspects of declining industry and the long term issues of full employment for "our childer and their childrens children!"
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"the chronic shortage of credit in the economy - which is the precipitator of our misery"
Er, are you sure about that? I thought it was the easy availability of credit and the consequent excessive borrowing that was the precipitator of our misery?
Maybe I'm missing something, but the shortage of credit is surely the symptom, not the cause? And could the shortage of credit not even be the cure as well? If people and companies get back to the idea that they will have to live within their means rather than base their entire existence on easy credit, isn't that a good thing in the long term?
BTW, am I the only person who read the title of this blog and thought that things had got so bad that the Tory party had been nationalised?
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#49 - Call me Tom
As someone who works in international Logistics and Supply Chain Infrastructure, I think your comments are well thought out but misplaced.
The current crisis will mean that within 5 years we will not be able to afford cheap underwear/skirts/trousers from the Far East, as our under-performing economy will be crippled, Sterling crashed, and the cheap at current exchange rate items now produced there will be more expensive than home manufactured items. Yes, it really is going to get that terribly bad !
But if we do so now, our manufacturing industry will be oh, so much stronger come five years time.
The economies (including the UK) who did best out of the 1930's slump were those that depreciated early. Learn from history.
And UK industry input supply costs are predominantly priced in EUR's and USD's, and NOT in Yuan or Vietnamese Dongs.
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#27 Mr Pirate - wrote comment 30 without having seen your 27 - did they pay in cash?
Now the interesting bit - are you keeping it in dollars or are you going to move it into another currency - if so - which one?
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#28
I answered that one a while back. It's to do with credibility.
Imagine you're a banker, faced with a loan application from Arfur Daley's Motors Unlimited. You say yes, and it goes pear-shaped, so you ask the boss to call in the HMG guarantee. I wonder whose name's going to be on the next P45 list?
It's nothing to do with HMG, it's everything to do with bankers keeping their jobs. This is now a market where there are old bankers, and bold bankers, but no old, bold bankers.
HMG can say what it likes, it now means about as much as whistling down the wind. The bankers have ignored them twice, whilst pocketing huge amounts of our dosh. This is stupidity incarnate.
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It amazes me that there are still opportunists gloating about the possibility of buying a cheap repossession house, presumably to rent out, as they have a large amount of cash to play with.
It is easy to be too negative about this crisis, but then it is also easy to miss how significant and dangerous some developments may be.
For example, the way the Bank Shareholders have been treated.
This tells any investor, domestic or foreign that this country is a more dangerous place to invest money than certain others.
Handing high street banks over to a foreign Bank is also not a good thing.
Taking Banks into the Public Sector is not a good thing. Remember that they pay Tax on profits, any profits made whilst publicly owned are only going to contribute a little more to the Treasury than ordinary Tax revenue.
Once in Public ownership, it will be very hard to pass them back into private ownership. Eventually what is left of the Banks will probably be given away to a foreign institution for a song.
Of course any future profits from foreign owned Banks will flow abroad and will not benefit the wider British economy.
So Britain is seen as a riskier investment proposition and as a faltering economy.
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Thinking of Nationalization , I am surprised that the Housebuilders haven't been gobbled up by the Treasury.
Perhaps they are just biding their time before grabbing all those thousands of acres of prime building land..........
But if unemployment keeps rising at some point rents will fall, and property could well become a very poor investment indeed.
Part of this crisis undoubtedly has been talked up by the Media, but like an Avalanche, once it has been started, you just have to wait to see where it all ends up.
It could well get far worse than many of these commentators actually imagine.
I'm sure many posters get a thrill out of doom and gloom mongering, but the continual slide in consumer spending without action to boost manufacturing or other exports, will create great hardship amongst everyone within this country.
We have seen the Pound fall to almost one Euro. This could easily get worse, if Britain cannot export SOMETHING.
The damage to Britains financial services income needs to be made up from somewhere else, and until it is things will get worse.
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A lot of you talk about protecting the UK manufacturing base.
What does the UK produce these days that are needed the world over? Electronics? Microprocessors? HDDs? etc.? Mass production cars?
I am finding it hard to think of an item - a British import of significance. Dyson comes to mind, but not really a global scale success story!
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Hey Bob,
I hear there's a new job being advertised at the FSA for a new Head of Financial Stability......I bet that little girl from Lazytown, Stephanie, could make a good stab at it!
She shurly couldn't do as bad a job as the previous incumbent(s)!
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#40
" - increasingly impotent, incompetent and pathetic-looking government."
This would be true if the objectives of that 'government' were to lessen the impact of the 'economic crisis'.
Wakey wakey - the objectives of the 'GoDvernment' is the financial 'crisis' - so far their doing a very good job.
Please think about it for yourself, get away from the media doctrine and political pretense and look for the real objectives in all of this, who is benefitting and how?
- why else would anyone implement the policies of creating more national debt to pay off bankers debt, 0% interest rates and 'quantative easing', come on this stuff is getting comical, break out of the trance.
Just what will the Mass' have to swallow next - anything 'you' damn well tell them and 'you' know it.
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So large businesses -
With far far too much debt ...
or with uncompetitve labour costs compared with the Far East ...
that have been afloat recently simply due to Browns Bubble are having to face a drop in volumes,
... and manufacturing which is mainly orientated towards domestic customers in Browns bubble sectors
are in trouble now that Brown cannot blow any more bubbles..
Never read Alice in Wonderland then. The Caterpillar that eat from one side of the mushroom and grew - and shrunk and shrunk when the other side was eaten.
This isnt news, it is just confirmation of what was in process in the last quarter.
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This "bad bank" idea baffles me? Why should the taxpayer BUY "assets" that are WORTHLESS? Surely it would make more sense for the banks to donate them, just to get them off the books before they depreciate further?
Give them all to Northern Rock to join it's own worthless, depreciating assets. At least the job of managing these cases will keep all the remaining staff in jobs (for a while).
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An obvious move at the start of the crisis was to ensure that money went to viable companies to give them time to restructure and prepare for the downturn
Above all these should have been top of the list.
Unbelievably months later we have a government that still hasn't grasped this.
Either that or government spending is in such a mess that refinancing this is top of their agenda.
How long before the implosion?
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49:
Britain could easily be in the position to manufacture its low tech Underpants, or even High tech parking sensor pants, within the next few years.
The reason, a collapse in Sterling against most other currencies, coupled with a collapse in living standards.
This future is looking more likely eevery day.
The only way to avoid a great collapse in living standards is for Britain to find goods and services it can provide to the rest of the world.
If we cannot convince the rest of the world to buy British goods and services, then the Price of those goods and services will have to fall, one way or another, until the rest of the world is prepared to buy.
Until then our living standards and exchange rate will be on a downward path.
Britain does not have the Unearned oversea income of Oil, Investments, Protectorates or colonies to live off anymore, we have to export.
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The nationalisation of credit by the tories is the only answer as you sat, unfortunately the wait and see policies of a Labour government are making things worse.
http://news.spotz.com/groups/gordon_brown_must_go/default.aspx
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The aim seems to make savers spend. I have saved to spend my interest. Lack of interest means I spend my savings. When they are finished I can claim government benefits? Who does this help?
Couldn't the Government make large subsidies for example to the fitting of solar panels? I would then be ready to spend my savings on a productive investment. The country would be less dependent on foreign sources of energy. Workers would be employed to manufacture and fit the panels. I would save future costs and be less dependent on savings.
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Robert?s thoughts pose some difficult questions. Firstly how can we tell the difference between a viable and non viable company. Quite clearly company account auditing appears to be just a rubber stamping exercise and the reality is that those that appear in a poor position might actually be more viable than those that appear to be doing well. How can we tell what is in tier 3 capital for the banks, do firms really expect to get back all that Vat that they claim on their accounts, did company assets really devalue at a slower rate in 2008 than other years. Share holders along with directors seem to have done a pretty bad job of keeping companies on the straight and narrow.
Letting companies go bankrupt does not necessarily mean job losses apart from at the top. Wedgewood would appear to be a good example of this. We do want to support viable companies but we also want to wait until it becomes a bit clearer who the actual viable companies are. Let me blunt I don?t want to be lending to companies which I know are going to go broke with perhaps the one exception of financial institutions which are critical to the economy.
Perhaps a more difficult question is how do we know that banks are not lending to viable companies? We have hearsay from some directors who may or may not be economical with the truth about their companies. How do we even know what a sustainable level of company credit is and let us face it those companies that are doing well at the moment are paying off their debt and those looking for credit may be up to their gills in debt already. In that light how are you going to view someone asking for credit without in depth knowledge of their financial position. In depth knowledge by the banks of anyone seems to have been in short supply, something which perhaps will change during this downturn.
This is all just typical of politicians panicking and what we need is well timed and targeted intervention. Companies which are serious about expanding and doing well may well be looking to raise bonds rather than borrowing from banks. Here the government could help to reduce costs by buying up a small percentage of these commercial bonds.
Timing is critical and the bottom is most likely to coincide with house price declines which seem set to continue tanking until early 2010. Late this year will be when we know which companies have been all smoke and mirrors and which are viable concerns. That?s when companies will need the credit, to pick up the pieces of their fallen competitors.
When investors have confidence in company accounts things will start to turn, bailing out companies too early delays the point in time when confidence is returned. It?s a recession and they happen and trying to force those who don?t want to borrow to take on debt will not work. What is most worrying at the moment is the number of companies cutting back on internal investment and this is where government could help by sharing the cost. It is not credit that limits internal investment, although it can play a part in highly leveraged companies but margins. These margins in a lot of cases depend to some extent on cheap importing from Europe(Sterling value). The government by increasing credit will have very little affect on margins where as government grants for internal investment would place UK companies in a good position in any recovery.
Mean time let us watch the politicians all run round like headless chickens trying to come up with the worst bailout plan. Whether its printing money, trashing sterling even more, throwing money down the drain, nationalisation of everything there appears to be less and less choice between the political parties. How long will it be before a bank nationalisation triggers a credit default swap event which sets off a further deterioration in the global market (total collapse), or Barclays/HSBC move their headquarters to Germany or the USA.
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#54 BasaltRocky.
Think we may be in violent agreement. I was specifically talking about the Euro and Dollar.
My huge concern is two fold:
a) There is no point in people (not yourself) stating that a low sterling is good for British industry. The issue is that for most of British industry, we export our manufacturing. This doesn't mean we are not creating wealth for the country - the highly paid design and knowledge workers are employed in the UK plus profits and foriegn currency is brought into the country.
The companies who do actually assemble or manufacture in the UK, invaribly have the majority of their supply-chain in Euro's or Dollar (nobody buys from China in Yuan, however, your are correct in that the Yuan is pegged to the dollar and valued too low).
If our currency continues to devalue,
the future of high technology and high-value add industry is very bleak - infact in my opinion unviable. So we may have to revert back to underpants manufacturing as you said.
Thing is, I for one do not want the UK to go back to a repetitive low-value manufacturing base. I think the future IS high-tech/high value-add.
b) As the majority of goods we want (from TVs, digital camera's, cars, etc to raw material for factories) are imported and we've just seen the pound devalue by 25%+ to every major currency. Then how can we not avoid major 20%+ inflation?
To me the if the government is indeed encoraging the devaluation of the pound, it shows how completely out of touch they are with the reality of British industry.
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On balance Osbornes suggestions make sense. They may help a bit. Well, I suppose they can't really have been his 'cos he's as clueless as Labour - but well done whoever.
I'm with 27 in that it would be nice to see cross party co-operation, pooling of ideas etc to arrive at a best concensus view of what to do. Of course it can't happen as Brown wishes to be seen as the saviour to give him a chance at the election.
Our absolute tragedy is that he is absolutely incompetent and will ruin us and our children in his vain attempts to save his skin.
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This may be a very painful recession but forgive me Robert but you seem to be having the time of your life.
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"Even so, there's a role for government, to prevent the chronic shortage of credit in the economy - which is the precipitator of our misery - from wreaking devastating harm on viable firms."
Well said Robert, the Government is indeed 'the precipitator of our misery'!
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That's the way to do it...if you're skint print some more money...easy. No problem.
You mark my words the direction we are heading will end up with:
* 3 million + out of work
* House repossessions at an unsustainable rate
* More pensioners on the breadline because of no return on their savings
* Many more high street names going down the tubes
* International British institutions disappearing without trace
* Insufficient money to sustain public expenditure eg NHS
* The £ ending up as a banana republic currency
That's enough to be going on with.
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Post 59. I think you will find that Mr Dyson moved his manufacturing to South East Asia a few years ago.
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Many very good responses here, better than the original article in fact.
The big question at the moment is whether the government can possibly raise the sums that it expects to borrow in the coming year. Alistair Darling puts this at GBP 118bn, but this is a net figure - add in likely redemptions and the sum actually needing to be raised is probably at least GBP 150bn. His sums assume that the recession is moderate, and recovery begins in mid-year - both assumptions are surely becoming more dubious by the day. The sum needing to be raised could well increase still further - GBP 180bn anyone?
Given that Germany (a stronger economy with a stronger currency) recently had to abort a comparatively small (E 10bn) bond offering, what are the chances of the UK raising the kind of sums we are likely to require then? The prospect of quantitative easing - a.k.a. printing money - would scare foreign investors away.
Anyone holding gilts should sell while they have the chance.
Finally, RP's contention that Tory policies amount to nationalisation is nonsense, as others have rightly pointed out.
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56 rahere
yes
The banks mission is to stay in business and make profit and to stay private not public. Who in their right mind would want HMG as a ring master. The surprise is HMG believing that they could indirectly control the banks by very broad memo. At the end of the day a contract is between two parties - the individual borrower and the bank, not HMG. Those two parties share the risk not HMG, no wonder HMG is ignored by both. HMG remind me of Neville Chamberlin coming down the steps waving the memorandum of understanding before WW2 and saying Its all sorted chaps. If HMG want to be a player they have to move to a different game, different mechanism. Problem is they believe they have more influence than they actually have. Lamont found that out with ERM. Lesson never learnt.
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Well in short the Government under Prudence has done a superb job of putting any other political party between a rock and hard place. Pru can't admit to the principle of the fact that he in effect nationalised the banks or rather he has allowed the Banks to colonise Britain, its really the obverse side of the coin. Ergo the conservatives have no alternative to the policy. As one contributer pointed out Labour did steal Conservative policies in order to get elected. It will be with some glee that traditional socialists will point to the fact that Conservatives will now have to be quasi socialists which will be their ultimate victory. I have asbsolutely no doubt that we are heading for an early election and probably a hung parliament.
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I totally agree with #3. How on earth can the Government spin the myth that the Banks aren't playing ball by dropping all their credit rates directionally proportionally to the official interest rate when the government won't alter or consider altering the rate at which it LENT (not gave, not handed over and said "sorry to hear the bad news mate, this should sort you out, no need to pay us back) to the banks.
The banks were recapitalised and the cost to them is 12%. They need to pay back what they borrowed plus the interest. They also need to be making profits. Does the government what to put them into a quandary where they are always "in debt" to to government and so Crash Gordon can always call the tune?
I think that Gordon is too proud to admit when the Conservatives, Lib Dems or anyone else but Labour have good ideas and he never wants to admit he is wrong. Don't let your pride be your downfall Gordon - and don't let it be the cause of our downfall as well.
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#55 grimupnorth
yes the transaction is completed and it was cash on the barrel-head, literally
what form to hold one's wealth in......... it is a worry, even for pirates, and I'm not keen to hold it all in US$ or euros or any currency I can think of; and currency speculation is for experts, as they say
given the overall state of things I think the best investment my be PADDLES because we are all definitely up s*** creek without one; meaning a potential market for nearly 6 billion paddles; may also invest in some canoes to go with the paddles, and it appeals to my Canadian heritage
yes it is bad, though some fellow bloggers are getting a bit overwhelmed by doom methinks: #48 lionsomebody predicts more job losses in the UK (30m) then there are jobs!
I might seize a ship-load of boxer shorts as well though, given comments from #54 basaltrocky that the UK population will have run out of clothing within 5 years
a nudist colony on a national scale might be good for tourism, though I hope you get some warmer weather
Islay whisky also seems a good long-term investment as we'll all be needing the occasional glass of grog I think! and I love that film about the stolen shipload of whisky but then I would wouldn't I
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what's the point of the BoE reducing interest rates, when nobody can borrow any money because the high street banks aren't lending ?
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I for one make no apology for being one of the siren voices that have been saying that this SLUMP is going to be far deeper and longer than our leaders and some other posters have allowed themselves to believe.
A poster above identified that we don't need more credit for business and I agree with them. We do need investment and that can only be done by a central authority.
To my mind we need to identify the strategic elements of our economy that cannot be allowed to fail. Those businesses then need to be brought into British ownership (we cannot waste our scarce resources ploughing money into foreign owned firms only for the parent to then pull the plug). All investment has to include a requirement for increasing R&D spend.
How we can bring this about I really don't know. It would take a very strong leadership from Whitehall and I just don't see that happening.
The snowball is running down the hill at a far faster pace than some of you might think.
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Is Robert's introduction to Sportacus the start of a big news story ? It's hard to deny that Cbeebies' use of Lazytown programmes has rocketed skywards since the Icelandic economy fell apart. What's the reason behind the BBC licence-payer being forced to subsidise Iceland ? Was all that TV licence money kept in an Icesave account ?
Let's hope Robert's investigative nous into his employer's affairs won't be bound this time round as it was in the past by Lord Black...
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Ah, now you see Shareholders (unless they are Pension Funds or Investment Houses etc) are always going to be amateurs.
They are just ordinary people.
They have to trust Regulators to do their jobs.
They have to trust Accountants and Auditors to do their Jobs.
There is no point reading False Accounts.
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We should not be surprised at the sharpness of the slowdown. A feature of modern business is the access to information and the complexity of supply chains. Reduced activity in automotive is a classic- it happens everywhere and because everything is just in time- T1 through to T3 suppliers have their orders cut completely- there is no such thing as gradual in this recession. And all the automotive boys know what they are each doing and they are good lemmings just like the rest of us. And the key is credit- the confidence to take orders knowing that you can get your own supplies, finance the necessary working capital and get paid by your customer. Government will have to intervene a bit but let us not forget that some manufacturing is doing well and the strategy has got to be to develop the manufacturers of tomorrow- those with green technology or those that help us secure utility supplies including water. FMCGs are not the way ahead but making things that sustain our lives and the planet must be the way ahead. Supporting automotive that is green is necessary but old fashioned gas guzzlers need to go away. I think we also need to start thinking about how we can use all this coal we have underground and how about building ships again? Even ones that use solar power or plain sails!!
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Thatherism and Blair/Brownism have both devastated British manufacturing.
This disaster has been made possible by the success of North Sea oil/gas plus the success of financial services. With the taxes raised from these sectors government had been able to ignore manufacturing industry.
It is now obvious that our future prosperity will depend upon the success of manufacturing.
But here is a problem, our tax system has evolved together with the rise of manufacturing during the 18th and 19th Centuries. Too much of our tax system is designed to take from manufacturing and too little has evolved to adequately tax the profits made in a very different world.
For example business rates are charged per square foot of floor area. This puts manufacturing at a great disadvantage due to is need for floor space. Manufactures are forced to pay high rates bills even though their factories are, at best, only just profitable.
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It was interesting to hear mandelson once again spinning like mad telling Wato that Osborne was agreeing with the government policy in the PBR. He either doesn't understand the Tory policy or what was in the PBR.
On another point, a major part of British manufacturing is in aerospace. I have heard absolutely nothing on this blog about the industry, China has stopped all domestic airlines importing aircraft and other airlines are cutting back. A large number of leased aircraft are financed by British banks so keep an eye on the industry.
The biggest worry about its future prospects is that Duff Gordon visited Derby a couple of days ago and posed for some pre-election photos.
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16 vjangelo
I think it is pathetic this bunch of loser-mentality Tory trogs berating Robert for being pro-Labour.
Robert is his own man (and a gloomy so-and -so he is too!)...a government mouthpiece would be much much less critical.
What is apparent is how damaging and treacherous to Britain this Tory-we-are-all-going-down -down-the plughole mania is.
I know that enquiries are coming in thick and fast in the high-end land-development market.
The pound has risen 10p v the Euro and the dollar .It is at a very competitive level which will help exports.
Private schools are not closing down.
Golf clubs are suffering....the whiners are too busy blooging all day to get out in the fresh air.
The shops are packed.
The airports are mobbed.
The National Savings Bank has got cash overflowing out of its doors with people queing up to deposit tens of billions.
And millions have got extra to spend now their trackers are coming down.
Yes, savers are being hit hard.
So do not think anyone is conned by all of this bleating....Britain is on the mend again.
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69:
If the High Tech industries cannot export, they are going to be in trouble anyway.
The Consumer market for all Products is set to shrink for the forseeable future (except food).
This is due for the most part on Wage rises being lower than the actual rise in the Cost of living.
Ordinary people have less and less money to spend on luxury goods, High tech or otherwise.
This trend shows no sign of changing and with growing unemployment every sign of getting worse.
Many products we all consider everyday may well become luxuries or treats in future.
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Looks like Iceland only bought 51 stores when last year they offered to buy the whole of Woolworths portfolio
I wonder what that makes the ex-management of Woolworths look like for rejecting the bid. I understand they might not have known about "the credit crunch" and it's bite, but all those 30,000 jobs might have simply transferred rather than disappearing.
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#70 crosserandcrosser
glad you agree with me that cross-party cooperation would be worth trying ...... in theory at least; I'm sure no-one wants to hear even one more parliamentary question time where these political psychopaths preen and posture and point-score instead of behaving like grown-ups; our political parties and systems seem unable to come to terms with big issues; look at how they duck and dodge on the climate-change question, peak oil, the tragedy of Palestine etc
interestingly Canada hasn't even had a sitting parliament during most of the crisis because the newly-elected minority Tories refused to recall it when they realised that they were going to lose a vote of no confidence on day 1; draw your own conclusions about the relevance of our elected representatives!
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Shouldn't there be a total and radical replacement of entire corporate and government systems at this stage, or is this the wrong time to replace and improve things.
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##34
We already have an Xfactor programme for business, it is called Dragons Den, which is worrying if those are thje best ideas we can come up with.
Better still why not recruit our top entrepreneurs, serious players, Alan Sugar, Richard Branson, etc. split them into teams make billions available and set them to start multinational manufacturing businesses, which must all operate within the UK. Let the TV channels follow their progress.
They would probably all lose the lot but at least it would be more entertaining watching our money go down the drain than it is with Flash losing it.
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69 call me tom
The problem is if you do not have a technology edge all you have is a labour market, and labour however low it is driven here, is expensive against other locations as others have noted.
The only resistance is transportation cost and that is only a differential, ie ship materials or ship value added materials as goods, you still have to ship something.
There is still the situation in India that people go wading in rivers infested by freshwater crocs and regularly get maimed and killed fishing with nets for small freshwater shrimps and fish fry. They only do this so they can eat.
What level do you think labour costs have to drop in the UK to become competitive with that scenario. China is causing problem with some Indian craft based sectors that is the extent of the problem. How long before labour parity is reached, Hmm, a lifetime.
The problem is private sector technology has been underfunded, academic reseach has slid due to government funding policy, public reseach bodies have been slashed. You are left with pockets of technology, and as anybody who takes a look at innovation hotspots you need a community eg silicon valley, a interactive number of technologists, to get things working well.
This goes back to Thatcher being dismissive of manufacturing and not understanding technology, followed on by Lawson being keen on the service sector being developed, continued with Browns glorification of the financial sector. It cannot be undone overnight even if there is the will which is questionable.
The only thing you can make here is something which cannot, for whatever reason, be made in the Far East. And the rise of a technical edge is the Far East is apparent.
We all can form a circle a dance around servicing one another. With some financial sector. and limited smart niche manufacture.
No Brown Blair and Bush have done a far better job than Osama could have ever dreamed of. Very effective distraction tactics. The Wests vanity and superiority complex is part of the problem. Never underestimate. Julius Caeser - It is not the groomed well dress men I fear but the hungry and ragged, - or very similar - I would need to look it up.
Those who go on about businesses in trouble miss the point - the transition is not completed. The exceptional thing is 3/4 of Nissan is still here not that 1/4 is going.
If you want to know what is likely in the near term you have to look to see who is holding their own.
Anyway I'm off to see my mate of many years at the curry house. He likes it here, and is successful even now and has no intention of going back.
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90 somali pirate
shouldnt that be crosser n crosser party co operation.
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#69 Tom
Oh how history repeats itself.
100 Years ago, the British cotton mills supplied the world, but within 20 years many were bankrupt and gone, caused by foreign cheaper competition that caught up.
Today, out universities are full of bright, pleasant Chinese students (effectively funding our further education system). Many are at sites near the old mills.
Within 20 years, especially with all the R&D investment, they will also have overtaken our high-tech.
100 years ago our forefathers laughed, and considered it ludicrous, that foreigners could compete with British industry.
How history repeats itself !!
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@73
3 million + unemployed.
People really need to wake up here. since the new year the uk are now losing 6,000 jobs a day. so for jan you can expect 120,000 jobs to go atleast,And as the figure will rise on a monthly basis and at a rate never seen before. by may 600,000 jobs will go. not for the first 5 months but for just the month of may only.
where in a meltdown
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Although I agree it really makes me squirm to hear so many here saying how important manufacturing is (now)..
For as far back as I can remember (and I've been heavily involved with mfr for many years and by no means just motorsport) the industry (from small to large) has been sidelined, derided, scoffed at, looked-down on, broken up, sold off, privatised, plc'd, bought up, liquidated, sued, foreclosed-on, and generally treated to every other negative verb/action I can think of. And doing it has never been much fun or particularly er, lucrative, esp for men who work on machines hour after hour.
Ho hum. How the worm has turned now that the heady days of making money in retail and service by doing as little as possible and creaming in 500% + margins are over!
If it's really amateur night from here on in - and manufacturing is King now - the price goes up.
GC
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Thank goodness there are some people prepared to think outside of the box. We cannot draw upon a historical experience that mirrors what has happened with the credit crunch. tinkering with the price of credit is pretty much pointless, when the real problem is the supply of credit and more pertinently where new credit is going to come from.
One thing also to be considered is that the UK at a government level is excessively centralised. I very much doubt that a solution can be found where one size fits all. I have worked in Scotland, West Yorkshire and now in the South East. It is fair to say that the business cultures and the respective economies are quite different in these regions.
Dictating an economic recovery from London will be inefficient and not target the important sectors of the respective regions. Will Brown's massive ego permit other peoples opinions, to influence Government thinking? Can he set aside his personal antipathy of clever thinkers like Frank Field?
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It may well be that economic growth and the definitions attached to it of recession etc is now an outdated concept. Asset values have not yet bottomed out and assets such as property are really forms of exchange. Does it matter what level they eventually reach? Financial markets have been concentrating on growth in Sales and or profits and we have all been following this mantra. Stability and cash generation for investment is not a bad idea and it is a revision of economic models considering these aspects that is required now. Throwing money around in a desparate attempt to get back on the the "growth train" is extremely short sighted. When are we going to have a real review of alternative options for the way forward?
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91
Replace one Committee of Ignorance with another committee of Ignorance ?
Very difficult to rebuild things from the ground up.
This is why Lenins dream of Communism failed.
And why mixed Economies, where those who can , do, work.
Usually.
Of course Britain has an inbuilt superiority complex that stretches from the Playing fields of Eton down to the Benefit Culture council estates.
We all feel we are entitled to have everything we see, and envy those who seem to have more.
A good job, house, car , holidays.
Something for nothing or the bare minimum of effort, seems to be a British maxim, too proud to work hard seems to be another.
Unfortunately, dishonesty, especially in the Accounting profession seems to be rife.
People believe they should be rich and lose their Morals in the pursuit of a fast buck.
Those of us dumb enough to believe and trust the Regulators and accountants end up losing our savings.
We are all fortunate to have lived in this Country, during the artificially high exchange rates, which have given us cheap holidays and cheaper imports.
Now it looks like things are coming home to roost, and I don't think too much sympathy will be coming from the rest of the world.
I'm not a Tory nor am I Labour, if I were to vote tomorrow I would either vote Liberal or in fact not bother.
None of the Parties are grasping the Nettle.
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Thank you for 93 Glenafon. Could you send a copy to all our teachers' training colleges?
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100. At 5:32pm on 09 Jan 2009, supercalmdown wrote:
91
Replace one Committee of Ignorance with another committee of Ignorance ?..
+
No I meant something like improve our lives with the same money and resources, spend on community facilities to improve the community.
Change politics so all parties and the public decide issues and it is not adversarial
Combine companies into better organisations
Improve public services and business standards. free public transport
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100.
sorry I did not read everything
change and radicalise the accounting and legal professions so you don't get ripped off to the max, these systems are dated and historical, the laws and processes can be streamlined and changed
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If you can't be rich you might as well be happy
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#93
Didn't margaret thatcher have a degree in chemistry? - a practical course that deals with synthesis and production?
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Quality can be better than Quantity
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Everyone os balming Gordon Brown but he is throwing money at the recession like everyone else is. And when you come to think about it if you bring forward projects and create more jobs then people will spend more and we wil gradually get out of the recession.
To adopt the conservative approach is madness - we have to create more jobs.
I seem to remember also that it was a Thatcher government that condoned interest rates of 15% to 17% which really killed those trying to own their own house including myself.
We need an interest rate which is fair to savers and borrowers alike. Reducing rates to 1.5% will not encourage savers and will starve the flow of money.
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1. Payable interest cannot exceed income.
2. Therefore debt capacity in any system is finite with a limit as defined above.
3. Therefore until some debt is allowed to default, there will be minimal demand for new debt to finance anything, both production and consumption, irrespective of need.
4. Therefore state financing of industry in the absence of resolving 3 will only achieve continued approach of the limit described in 1.
It is not rocket science. The talk in the article above is more of the same, a sure way to make things worse by refusing to acknowledge that servicing nonproductive debt is bleeding the economy to death. Of course the patient wants a transfusion, but what good is fresh blood unless you seal the wound? Labour made it and the Conservatives are too squeamish to fix it.
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re 2 kikidread: "it's time to discard the rat race mentality and dependance on materialism that the modern world has become, which is a good thing really"
probably re also 103/104 and 106 which haven't passed moderation yet
Who do you think pays for the NHS and your pension? If you don't understand the basics of economics don't comment on an economic blog.
Then again the same probably applies to many City Whizz Kids
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102:
You should go to a few Community forums.
People always argue, in fact I've watch people argue quite vehemently over the design of a poster !
People are imperfect.
People all have different ideas of what is correct.
And sometimes neither side in an argument is exactly right or wrong.
Add this natural imperfection to limited resources and then add different strengths of bargaining power into the equation and very soon we would all be back to square one.
Those with the bargaining power would get things mostly their own way and the rest of us would be sidelined.
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Re: 93. At 5:11pm on 09 Jan 2009, glanafon
Yep OK. Generally fair comment.
But in the past we were right to build up financial services. It was a cash cow for the economy in years to come.
The problem has been putting all our eggs in too few baskets. We need to diversify our investment into companies and industres that add true .value to the economy.
This is LAbour's legacy of passivity. Essentially they have lived off the good bits the conservatives created and not created any themselves...hence the problem we are about to face (we ain't seen nothing yet)
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At last a recognition that manufacturing has an importance much greater than that suggested by size relative to the service sectors.
These jobs are real skills not only practical skills but high tech skills which are vital if this country is to compete with other European and Far East economies.
There seems to be a genera attitude in the country that manufacturing is old fashioned and outdated - the manufacturing companies that are left in the UK today are actually some of the best and most efficient anywhere with committed highly skilled engineers. We cannot and must not lose this; we must realise how fragile this sector is now that it is so small. These skills, unlike other industries, will be lost forever and only manufacturing adds true value - the banks are teaching us this now!
If we do not try to keep these companies then others will be more than happy to take the inward investment from Honda, Toyota etc. If we show these companies we are hungry to keep their factories then we can become a European HQ for many of them... BBC / Robert please consider all of this when reporting on the financial crisis
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93 glanafon
97 guycroft
et al
Manufacturing and development companies.
The problem is that it has been way more lucrative to buy and sell financial products and whole companies rather than make things.
Furthermore folk don?t want to get their hands dirty or exercise their minds with reality.
They will study technology and dabble in it meanwhile always keeping their eyes open for the main chance of getting a grant.
They are lazy.
These folk are good at communicating with government support agencies. Competition ceases to exist as the silver tongued extract grant upon subsidy from development agencies run by lawyers in sharp suits.
And the end result?
Useless grant aided companies that do not know what they are doing.
Oh, and forms filled in with all the boxes ticked in the right places.
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there's been a lot of talk on this blog about 'dropping money from helicopters' as an answer to boosting economic activity; several bloggers have expressed their skepticism that such a thing could work, but it gave us pirates an idea and we like to innovate
have a look at tonight's news about the delivery of the ransom money for the Sirius Star and you'll see economics in action: the plane arrived right on time and parachutes us a container of cash
thanks for the inspiration Robert; we owe you big drinks if we ever meet up......
our economic activity is duly boosted
PS: we chucked the GPS devices overboard......
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Dear All
I have taken to reading this blog almost in its entirity for a week.
Today has been excellent. Superb input all round.
Glad to see that people are back on track and talking about what matters.
I find myself agreeing with the Somali Pirate about a need for political unity as the proverbial is already flying off the fan!
Vince Cable should be at the top table but what will it take to get him there?
People dont seem to get it. They see their pension pots shrinking big time. Their house value collapsing. savings away to pot and the ever increasing risk of losing their job.
It feels like its too much for people to bear and they seem to be in denial.
The last 2 recessions I was in the public sector.
This time I have my own business for the last 10 years. The viewpoint this time is from one extreme to the other.
I am not in the business(sic) of public sector bashing but I'm sorry they need to share a bit of the pain
Time to take a serious hard look at some of the sacred cows such as the NHS
Discuss.
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What kind of a financial journalist are you? Not a word about this govts loans to the banks being payed back at 12% , making impossible to lend money at less than this or lose money.Not a word about the insane creation of public non jobs to gather votes over half of England,(don,t think about Scotland), that will, in my mind be the main obstacle to recovery. Then I find out that your father is a labour peer. No conflict of interest there then!! Just have a go at the tories. Your dad must be proud of you!!
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Most of the stuff that needs doing to restore UK manufacturing is fairly obvious: its just a case of copying what the Germans, Janapese, Koreans and Chinese did to establish their industries.
1. The export of manufacturing and import of debt has gone too far. The Chinese have no problem with protectionist measures like ordering cancellation of all aircraft orders but they have a $40Bn/month trade surplus and are much more vulnerable to protectionism than the west. So the EU and US should choose strategic high tech sectors we want to repatriate put on some pretty steep barriers until local suppliers have re-established themselves.
2. The govt. should guide the percentage of bank lending directed at various sectors. It should not get into case by case decisions. For the next few years to compensate for decades of skew towards property it should prioritise lending to exporting industry and put a cap on what can be leant for housing.
3. The tax system should reward people who invest in export industry and reward companies that re-invest profits in R&D and capital equipment. Cutting corporation tax for companies based on the proportion of sales that are exported would help. Gains by employees on stock options in high tech startups should be completely tax free.
4. All the government agencies, schemes and quangos which 'support' industry should be shut down. The only thing they support is civil servants pay, legal advisers to give opinions on 'state support', and property developers to build nice office blocks in stupid locations. This will save 100M's of pounds.
5. The budget for the Engineering and Physical Science Research council should be doubled from £400M to £ 800M. Start-up companies should be allowed to compete with universities for research funding and industry people should be given a majority of places on panels that rate grant proposals.
6. The exam system should be reformed so it actually sorts students in terms of ability. UK students with the best grades entering practical courses should get 100% of fees paid and reasonable grants. Right now far too few UK students are entering undergraduate courses in science and engineering.
7. The government should invest around £1Bn /year in specialist high tech Venture Capital companies to replace funding from the financial institutions which has dried up. There is a 2-3 year gap between funding and getting to market so the start of a recession is actually a great time to invest in high tech start-ups. With VC funding experienced engineers and managers being laid off from larger companies can start up on their own.
8. The government should do the obvious things to sort out the country's energy and transport infrastructure. The electricity grid needs modernised, fast trains between the major cities are needed and the severn barrage and a lot of nuclear power stations need built. Independent of whether one believes in global warming we need to get less dependent on imported oil and gas.
9. There should be a ruthless focus on efficiency and profitability throughout government rather than 'fairness' and 'wish lists'. Once we are back running a balance of payments surplus we can think about how to spend it.
10. The immigration and taxation system should encourage the very best and brightest from Asia to work in the UK. Many already study at our universities we need them to stay on afterwards. This is one of the keys to the success of silicon valley.
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"You must all save for your old age. Ha, got you. You didn't think I meant so that you could enjoy the fruits of your prudence did you? I meant so I could steal your savings to pay for the shambles I have created".
A question. With interests rates so low what is the more likely response of the average saver?... (1) Oh well, rates are low, Gordon says I should spend more, I might as well spend my hard earned savings or (2) I have spent years building up my little nest agg. I'm going to spend less. Then I'll have, hopefully, most still intact when rates go up again.
And for borrowers (1) Great. Low interest rates, Lets borrow more, spend more or (2) Not sure about my job. Better take the savings on my tracker, spend less and reduce my exposure.
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110 I meant things like free / cheap leisure centres, family arena's fun fairs, social amenities etc
money is about options and you spend it wiser when you have less
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Hi Robert, do you think that the government will honour the 5% pension rise due in April
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In response to post 80,
what's the point of the BoE reducing interest rates, when nobody can borrow any money because the high street banks aren't lending ?
Its easy, abolish LIBOR THEN Force the banks to lend at their respective centeal bank rate!
To all intents and purposes, LIBOR is dead anyway.
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The manufacturing figures may be awful and may continue in that mode for a while, but this is probably the time of the darkest hour.
There is a massively growing imbalance between world merchandise exports and world merchandise production. We know who's doing the manufacturing and where the exports are going.
But wherever there is an unnatural balance, there is always a correction. My guess is that the pound is going to fall rapidly to the point where local manufacture will be competitive once again.
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Go read yesterday's and today's Treasury Select Committee Hansard report into the responsibilities of the banking sector for this crash - it's even more vicious than we'd choose to be. The Chancellor seems to be sitting on something of a revolt in respect to his faith in the banking sector.
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106, KikiDread
As stalin said 'quantity has a quality all of its own' ;)
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#107 magicMike70 wrote:
"Everyone os balming Gordon Brown but he is throwing money at the recession like everyone else is. And when you come to think about it if you bring forward projects and create more jobs then people will spend more and we wil gradually get out of the recession."
We have brought forward several years' consumption over the last decade with no corresponding investment in production. Bringing that forward was and is the problem. If you bring forward any more demand without making room for it by allowing the default of onerous legacy debt, the monetary system will fail. At first there is not enough money, then its value is insufficient, then it is no longer universally accepted. There is a lot of case history outside these borders.
Anyone who promises to throw money at the problem without opening a relief valve is promising to make the problem worse.
I want to hear politicians talk about their priorities with respect to which assets will be "allowed" to turn nonperforming and stay that way. Therein lies the distinction.
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#76
Yet one of the major tensions throughout British History is between the City and the State - the City is subject to but funded the State until very recently, which bought it a high degree of political immunity on the basis that the balance of payments depended on the invisibles they generated. The boot is now on the other foot and my above note shows the Treasury Select Committee has had enough in spades.
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#117 Tom some very interesting ideas here which should be explored further.
#116 Stewart What a pathetic waste of vitriol. posters may not always agree. In fact we learn (hopefully) from each other. However, an unsubstantiated personal attack just reflects poorly upon you.
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116 should have read stewing and not stewart - apolgies!
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This is your worse blog yet, how on earth is this nationalisation!
Nationalisation is the government taking ownership of private companies.
There is no state taking ownership of companies here, these are just sensible proposals to get the system working again and restore confidence to the markets.
Half the problem has been the government attempting to profit out of the situation instead of just fixing the system e.g. nationalising NR then setting artificial compensation terms and 12% interest charged on capital funds.
The result of this is that unemployment is on the rise as firms cannot obtain funding and confidence has evaporated. So instead of earning tax receipts from corp tax and paye they are having to pay out dole money.
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I suggest the government should protect manufacturing jobs jobs by giving all pensioners a small free car.
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open note to alexander curzon-
hope u are just too busy today, and haven't taken the hump with people trying to find out more about you. (yesterday thread)
You have obviously worked very hard and used your skills well. People are just inquisitive that, because you haven't used the conventional PLC, evn LLP route, you haven't shown up on the media radar much.
There are actually quite a few people like you, who basically laid their necks on the line for every business decision they made during their working lives, succeeded magnificently and have felt no need for publicity.
Your maverick views and CAPITAL LETTERS are a valuable resource to this debate. We wont remove this incompetent government and corrupt whitehall and banking systems if people like you dont keep the pressure up.
keep posting,
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117 tom_edinburgh
"The government should invest around 1Bn /year in specialist high tech Venture Capital companies to replace funding from the financial institutions which has dried up."
Nope. Wrong. That will just stifle, put other companies out of work.
What the government should do is invest big time in university blue sky research. The experimental test rigs etc should be sourced from existing hi-tech companies.
Win win. The universities do what they are good at. The commercial companies do what they are good at.
If there are commercial results then let the commercial companies exploit them. Whose taxes are paying for it all anyway?
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Dear Robe,
Any news yet on the new design for the billions of Her Maj about to be printed?
My bet it has GB on one side and the Titanic on the other.
Xxxxx
Anyone got change for a thousand pound note....!
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I chose to give my kids a decent life, so dont live in London. Lower overheads, better calibre staff, better golf courses. However I am in London every week.
Last night, I was in the usual bar in Holborn, waiting til the usual horrendous rush hour (or 2) at Farringdon calmed down before heading out to the airport. I therefore think I witness a regular snapshot of public sentiment in boom-town London, easier to read than seeing it every day.
At 5pm til 6:45pm the bar had 4 little groups of customers, normally I would say it would have 30 groups on a Thursday evening. It has a mixed clientele and I would say is a good barometer.
Therefore even if you factor in January exhaustion, at least 50% of their custom has been scared off, and it is undoubtedly by fear of the future (redundancy and job security) and lack of disposable cash more than anything else.
John Lewis and some other retail outlets may have made a good marketing effort to get through Xmas, but honestly, the real evidence of the coming tsunami is there. It really is not going to be much fun for the next 2 years at least, and probably more.
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The only thing that will get credit flowing again, is confidence. That will take a long time to re-establish.
Rolling the printing press, which is now threatened, whatever euphemism it is described by, is not "risky" but "terminal". Terminal in any country in any circumstances. Get your wheelbarrow now!
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I can't see the problem.....very soon the pound will be semi worthless and then GB will rival Disneyland attracting millions of holidaymakers each year with proper money to spend...and as we are traditionally good at ripping off holiday makers (wherever they come from) we can look forward to a rosy future being employed to service / exploit those visitors.
We of course won't be able to buy foreign stuff ( no proper money ) so industry will adapt to provide us with the essentials at a price we can afford. Tesco's will need to come up with a new business model of course...or relocate to more profitable lands.
On a more serious note...Britain has been - historically - one of the world's intellectual and industrial powerhouses. How did we allow it to go so wrong? By allowing a political system to evolve where second raters (people who couldn't cut it in the real world) gained control over the rest of us.
That simple really...and that is where we need to start addressing the problem if we want to turn GB PLC back into profit.
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#97 and 113
In the mid 90's when the beginning of the explosion in university for all began as part of building a 'workforce fit for the future' there was a cartoon in the Times.
It depicted a graduation ceremony with a room full to the rafters of jubilant psychology and media studies students in mortar boards and all the regalia.
In the next frame the lights went out and there was the caption.
''Does anyone know where we can find an electrician''?
Jericoa
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111 marky
The problem the Conservatives have is they cannot get to close too Brown. Damned by association. They also have found Brown unhelpful when they offered to assist.
Why on earth should they help Brown other than in part. They have to be centrist which Brown is also trying to be. So there is an identity probelm. They are finally trying to establish a seperate solution, and have apparently taken time out try and get it right. Whether they are right or not is to be seen.
Brown tacitly acknowledged the near future was not about fighting a GE. Think he has given personally. All the data flowing across his desk must say uplift before 2010 GE, No. Brown is unlikely to go until he has to it is not in his nature. He is a dour stayer. Rightly or wrongly. You have to admire his grit even if you think he is just plain wrong. Or he could be just trying to salvage his history. Therefore there is a year and a bit for the Conservatives to get their presentation together. Do not underestimate them. They have been in power and they have some capable people. Osborne needs to sharpen up or go but it is a bit like Faking it on tv, deliver can come thru in time. Labour appear dead in the water by all known rules. The unhappyness has only just started with the electorate, give it a while and it could brew up something terrible nasty. For the Conservatives to get in the issue is not them appearing attractive it is Labour appearing unattractive. All I am interested in is professional management of the economy.
I am not against financial services being regarded as important I am against tunnel vision and one legged stools. I do not believe financial products are as resistant to problems as some feel.
Manufacturing will continue but it will be limited. It has to be clever, flexible, technical, cultural, niche, internet driven, low overhead, ethical and environmentally conscious and lifestyle. Unfortunately conventional manfacture is still on a rough ride. It would be nice to feel a end was in sight but it is doubtful. Anything that is under the banner of 'me too' to revert to jargon is in trouble. The problem is that 'me too' ie same as bloke along the road, is easy. Too accessable.
Our business is independant of location with an international customer base. It has been deliberately structured for this environment with us having had a damn good kicking in the 90s in conventional activities, never again. It is not important if customers are have less disposable income, too much is made of that. All that matters is whether you have something they want and value and you in turn provide value for money and are courteous to deal with and respect them. Most companies do not have any particular identity or provide something people want. QED. They converge into a blur driven by a desire to be safe. Providing more disposable income by whatever means does not necessarily make what they supply more desirable. Some companies, including big ones, have yet to realise that.
It is noteworthy that the Mini One still sells in the face of a steep automotive sector downturn. It is not cheap, there are cheaper cars, it is flexible in attributes and can be made individual from a matrix. It has a lifestyle image and has a quality message. It deprciates less than most, in other words it remains desirable. It tells you that price and function are not the only issues with a sophisticated and educated customer of any nationality.
To return to financial products. There is no brand, it is just the cheapest deal. They can be supplied from anywhere, it is numbers on a screen. It is foolish to think they cannot be piped from anywhere. There is no need for them to be in London. It is entirely stupid to believe they are secure as an industry in this country.
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Why are we trying to fix what is already broken
After many years of credit financed growth which has to come to an end sometime, what do we expect.
Problem
0. Banks
Can no longer give money away for less returns to people/companies they may not be able to pay it back. They must reduce risk (turnover) and increase profit (higher rates for borrowers lower rates for savers)
1: Consumers
(us) run out of money and spend less
2: Companies
less turnover means that more profit must be made from less customers.
3:Government
(Oh F....) less growth, more spending = less tax and more important, no re-election.
Wish List
1. Banks.
Lend less, make more out of those who borrow, squeeze the f---- out of savers, pretend its Armageddon and get the government to cough up as much money as possible (they want to be elected again)
1: Consumers
I'm in a mess but it the governments fault that I lived beyond my means, (Gordon promised no more boom and bust, they better cough up or I won't support them.
2. Companies
Great excuse to shed all the free loaders and maybe get some cash from the government
3. Government
Do anything, even if doing nothing is better, nobody can re-run history so we can argue that anything else would have been worse.
REALITY
The financial system will correct itself no matter what we try to do, we will consume less but make it more profitable. (sound good)
The only loser can be government who fleece us all in with growth.
This is until the next scam/bubble sure fire money making (growth for ever scheme) comes along as we are greedy
(see Darwin for more detail)
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131 all my fault
I agree AC should maintain his CAPs, it is his brand. I would be very disapointed if a few hecklers got under his skin. Does not bode well for any off us if they have.
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#59
The UK Military Industry is huge. The spin offs are enormous in terms of first class R@D. Back in 2003 40% of Government R&D staff work for MoD (12,000 staff)
Just Google it and you will be surprised. We have always been good at wars so it makes sense we would be good at the sharp end of technology.
Now there is a growth industry for the future.
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125 werrington silent
Borrowing today makes you wealthier today, and by definition poorer in the future. That is the mechanism.
Except it happened yesterday.
The only way to maintain your wealth following borrowing is to have an assest worth something as a result, or to borrow again from the future. That is not possible if the assest is worth less than when you bought it or you are no longer able to borrow again.
The costs involved in borrowing mean perpetual borrowing has to expand rewarding the lender not the borrower.
If I follow you.
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RP's 'The New Capitalism' says 'Economic conditions in 2009 will be treacherous. There'll be a formal recession in most developed economies, and the economic contraction is highly likely to be more
severe in the UK than almost anywhere else.' RP later says 'A couple of questions follow. Who's to blame?' and then 'That said, most would say that Alan Greenspan, the former chairman of the Federal Reserve, the US central bank, was the most benighted of all about how the global economy had become safer and sounder.' That begs the question as to who is responsible that the the economic contraction is highly likely to be more
severe in the UK than almost anywhere else'. When the Falklands were invaded Carrington took responsibiliy, showed he was a 'true man' and resigned. Today the people of the UK deserve its current responsible minister to accept his responsibilty for failing to foresee this looming tragedy and similarly resign.
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126 rahere
Yes but they are a load of women, and hell hath no fury like a woman scorned.
If you do not own the banks, and they do not want to own them, you cannot control them. You cannot sell coupons on a fixed redemption and then demand extraneous criteria. They are deluded to think otherwise. On what basis is instruction to be made. Each individual borrowing contract is subject to its own risk assessment giving ample scope for deviance against any general criteria. They are out of their depth. Words are cheap. They are cheap.
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My advice would be to plant an extra row of potatoes or two this year.
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Headlining this as "Nationalising Tories" is pathetic. Tory Governments over the years have nationalised nearly as many companies as Labour Governments have but this proposal is not nationalisation by any stetch and nor is it a surprise. Osborne and Cameron have been plugging similar, less well worked out, ideas for months and they make more sense than the grandiose sounding iniiatives we have had so far from the Govt, which promise a lot but in reality are too often either compromised or simply too expensive to be used on the necessary scale.
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For years we have been told that it didnt matter that Britain was finished as a manufacturing base because you only had to look at the "success" of the city and financial institutions to see where Britain's expertise was now focused.
But now that that "success" has been shown to be false and built on unsustainable credit and bad practices, the question is "just what is Britain now good for?
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141 mark the yorkie
Your proposition is to move in the diametrically opposite direction to where we should be heading as a country and economy. Or is it comedy night.
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As the financial services and manufacturing sectors shrink the one certainty is that the public sector will grow as a proportion of the economy. There will be no pain in the unproductive public sector which will mean even more pressure on the private. GB will never allow his beloved public sector to suffer so where will the funds come from to prop it up given the fact that taxes are due to rise considerably to pay off govt debt As long as the pressure on the private sector increases so confidence will shrink more and spending will reduce as families seek to protect themselves. Without a fundamental reassessment of govt's role and policy there will be no longer term recovery. GB is psychologically unable to break from his belief that all good stems from govt control and decision making. Certainly not the way to instill the confidence needed for individuals and families to approach the future with a sense of purpose.
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Why is this man, a finance manipulator and user of words like armegeddon still allowed to report on these issues ?
I trust him as far as a hedge fund.
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Assuming there will be winners and losers and the UK will be a loser in this mess, what will happen to a bankrupt britain?
I have lived through the 3 day week
I have lived through the 80's squeeze the Unions
I have lived through the reposession 90's
I am living through the beginning of the end of 20th century capitalism
SO when JC went to the IMF because of that horrible Winter, did he print money to try and get out of it? Did it work? Oh it couldn't of done? Have we paid the IMF back?
When we print money this time does that mean we dont have to go to the IMF?
When Gord bankrupts us, what happens? does we get bougth up by a hedge fund and get renamed Great Leylandii? in honour of a previous renamed british insitution?
What happens if we print money? what happens if we dont?
These are the only choices left so can someone give me an answer?
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Without reading ( maybe a big mistake ) the Treasury Select Committe minutes as referred by raheer in 123, then the immediate conclusion reached about MPs' complaints about the "banking sector "
( has anyone actually ever defined this? ) is that it is the traditional escape of politicians blaming someone else but themselves. Always beware a politician seeking a scapegoat - an election must be in the offing.
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105 wee jonnie
Yup.
She was still naive.
She was interviewed by that quite moderate environmentalist journo (burke was it) who tried to tell her quite correctly that raw sewage was being pumped into our rivers and estuaries and she was rather cross with him and said all but all effluent was treated before discharge. He was totally taken aback but she was having none of it. However primary treatment of sewage is simply pumping it so it goes like a windsor soup and screening it for flotsom and jetsum. By most peoples definition it was raw sewage, in fact worse because it is dispersed in an aerated solution. So much for chemistry eh. Liverpool had its first ever sewage treatment works in the 80s I believe. And people are bemused there are dead zones in the coastal areas due to oxegen depletion or am I sounding like an aged activist. It was only EU litigation threat that promoted a better situation. I am still wary where I swim on the coast. The much lauded blue flag scheme is based on bacteria counts in seawater. Bacteria does not like saltwater, done for in hours. Now viruses, their much much tougher. HIV Hepatitus who knows.
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I am retired and have £48,000 in the bank, not a lot I know but all I have by working all my life. By this time next year I will still have £48,000 in the bank because the Bank has all but stopped paying interest. So why should I keep my money in the Bank?. Should I not take it out and buy Premium Bonds when at least I will have a chance of winning something.
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#147. elitism wrote:
"........But now that that "success" has been shown to be false and built on unsustainable credit and bad practices, the question is "just what is Britain now good for? "
Nothing ....... which is exactly why so many Scots now want independence. We can't afford to play the Treasury and City's game anymore.. Mind you - neither can anyone else in so called Britain.. But we at least have the possibility to call it quits.
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#142 glanafon:
Exactly!
It is quite simple and elegant. If only more people grasped it.
Where we failed was the "productive asset" part; we were too busy having a good time to create any. Now we lack the means to repay debt, and may shortly be denied the means to borrow (gilt / forex craziness coming to a TV near you, '92 style).
Other countries failed differently, by producing too many productive assets which will never pay for themselves. Many of them also lack the means to repay debts, and some may shortly be denied the means to borrow in similar fashion.
The trick to beneficial employment of debt is to finance enough production to repay it, not too much, and not too little. Allowing accumulation of private capital (eg savings) allows ordinary people to assume creditor status and benefit from the financing of the economy too. Bankruptcies and regular recessions are the market's way of correcting imbalances between debt and production which inevitably periodically arise. Attempting to "help people" by forcing taxpayers or holders of the currency to service gratuitously onerous debt only increases the size of the imbalance and postpones the day of reckoning. The government's own book of economic accounts contains the data to support this trend over the last decade - debt being allowed to grow much faster than the economy - and allows forecasting of the size of the eventual correction by working backwards. They know we are looking at a depression.
Unfortunately the debt load we have will act like a sea anchor on the economy until we cut it loose, and could cause the ship to break up otherwise.
The reason for the government's desperate attempts to keep the game going all these years: when debt is defaulted, ordinary people lose borrowed wealth, rich people lose capital.
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#154. Leroymac wrote:
"...take it out and buy Premium Bonds"
Sadly the number of prizes and the prize fund is linked to the effective interest rate. Just last week NSandI reduced the payouts on account of the previous reduction in interest rates - It is to be expected that they may do so again.
What about inflation linked investment bonds of some type - as many commentators reckon that inflation will rocket fairly soon? Or perhaps the 'wise men' (idiots) will raise interest rates again when they realise that savers have stopped spending and there are seven times more of them than there are of borrowers!
Look before you leap!
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"There's a role for government, to prevent the chronic shortage of credit in the economy - which is the precipitator of our misery - from wreaking devastating harm on viable firms."
Well, obviously, a Socialist would say that. This year the UK government will borrow GBP150 billion. The US government will borrow USD1 trillion. No wonder nobody has any money left to lend to "viable firms".
And in any case, interest rates are now so low that nobody makes any money lending anyway - so no wonder they don't do it.
We need a mix of LOWER GOVERNMENT SPENDING and HIGHER INTEREST RATES. Preferably MUCH lower spending and SLIGHTLY higher rates.
We don't need State loan guarantees. We need the UK and US governments to get off the backs of the rest of us. They caused the whole problem and they're making it worse.
When will the Conservatives regain the courage to be Conservative again and tell it like it is???
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154. At 10:13pm on 09 Jan 2009, Leroymac wrote:
I am retired and have ?48,000 in the bank, not a lot I know but all I have by working all my life. By this time next year I will still have ?48,000 in the bank because the Bank has all but stopped paying interest. So why should I keep my money in the Bank?. Should I not take it out and buy Premium Bonds when at least I will have a chance of winning something.
NO!
NS&I reduced the payout of premium bonds to reflect the interest rate ( the prize fund matches the central bank rate = 1.5%), So what uded to be 5/6 pages of "winners from 5000 upyo 1 million has now been reduced to around 20 prizes in total from 5000 to 1 million. This is out of Billions of squid of investments. I would advise you not to buy these worthless bonds and put your savings into whatever a professional person advises you.
My advisor told me that my bonds were as effective as giving Darling my savings at a discount of 5% per year!
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#151 PetersKitchen wrote:
"What happens if we print money? what happens if we dont?"
If we do not print money, GDP dives 30% and we get a deflationary depression lasting through the 2010s. "The government failed to stop it."
If we print money, interest rates go to 20%, sterling loses most of its value, the price level reset drops all but the wealthy into poverty and GDP will be the least of anybody's problems. "The government caused it."
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Robert:
Do you propose that what we really need is for our 'State Retail Bank' to be given some direct Guidelines? To operate within strict boundaries - where loans can be had by all subject only to certain defined parameters e.g. 20% deposit saved for say, white goods, cars, electrical items. Mortgages at the State rate dependent on LTV calculations.
No need for 'expensive' Bankers then?
Any SME facility would agin be subject pre-defined lending criteria... 25% for Capital Investment...
We could keep all those Bankers at work checking that all paperwork, receipts, etc, was in order. Surely the Audit Departments are capable of monitoring the 'paperclips - as they have no doubt failed their other Stakeholders. No need to pay more than £15k each per annum, and if they don't like it, then they know what they can do...
Good idea...
Of course, it would still be open to Commercial Banks to conduct business on any such terms as they considered appropriate - subject to existing FSA/ BofE/ Treasury scrutinies.
Our State Bank could also serve their Community by acting as the local Post Office.
Otherwise, it is time that we all took stock, and put our noses to the grindstone. We have all paid ourselves too much, all spent too much, and not 'added value' as we should have.
This mess is not going away quickly, and there are no easy solutions...
I've said it before... Why can we not settle for 'managed' decline, rather than growth?
A number of 'other' taboos could be shot-down at the same time.
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Is there anyway that financial reviewers could stop commenting on merchandising and its present woes.?
I was born in 1943 and can well remember as a boy in the suburbs of London when we had very little but were certainly much happier eating less except what we given, gardening for fresh vegetables and fruit and we kept chickens . Also only small amounts of basic groceries were possible to buy. I have also lived in Europe and noone there seems to buy the vast quantities of food mostly wasted that you see at UK supermarkets. There is no need to spend all ones free time going to the shops.
If you don`t spend personally you are going to save albeit personal and at not much interest with a declining pound so it will be less anyway in a year- it does allow to accumulate later when this time probably about 7 years is over . Also wear pullovers and thick socks and plenty of bedding - that way you won`t spend so much on fuel costs - also walk rather than using cars for short trips- and if you are on a pension like me - use every freebie that the State and local authorities provide albeit from our taxes-Only buy what you hav ecash for - don`t use credit cards-sound like the German attitude- Waste not want not - try and remain cheerful - learn to spend evenings reading again - and be friendly to neighbours- we have forgotten what it was like in the 1950s not at all bad. Recessions have have happened time and time again - remember the South Sea bubble and tulipmania
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#148
Some of the best R@D with regard to serious technical advancement in the UK is done through military, science and technology.
#59 was looking for a global success and here it is. There is no point pretending it does not exist or we don't do it. The fact is we are good at it.
You can moralise as much as you want but the world is getting more and more unsafe. There is no comedy in that this is the way of the world for the foreseeable future. We develop it and use it and choose who we sell it to or some one else does. As a ex military man I am comforted we can still get our act together on this front.
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We are in a two tier situation now.
Borrower winners have fantastically low tracking rates.They are quite happy.
Borrower losers are locked into now high fixed rates.They were happy but are now fuming.
Housebuying winners have secure income and are getting credit to buy at low prices.They may have sold at the top end of the market and are now buying cheap.Some of them keep schtum, some of them blame the government for making them richer.
Housebuying losers cannot get credit due to more stringent criteria, and are being offered less money to borrow.They bought at the top of the market and now have negative equity.They feel trapped.
Shareowning winners were in defensive stocks,and had sold financial stocks at high prices pre-crunch.They keep schtum.
Shareowning losers were in financial stocks and stayed in them too long.They write in to the blogs.
Saver winners locked into high interest deals before the rates fell....they keep schtum.
Loser savers now prone to low interest rates are not happy......they blame the banks, the government and the borrowers.
Some of the rich are now not rich.They write in.Some of the rich are going to get very rich....they keep schtum.
The poor are feeling poorer.
The winners are winning a lot and the losers are losing a lot.
Winners tend not to write into Economics blogs.Some of them feel guilty about being winners, and blame the government , the borrowers and the banks for the losers.
Losers blame the government, the banks , and the the winners.
Everyone but themselves.
And that is why these blogs are critical of the government, the banks, the borrowers.
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This comment was removed because the moderators found it broke the House Rules.
An alternative solution would be
Ban all economic news coverage
Ban all economists
Ban all economic news editors
Ban all economic statistics
Ban the business part of the BBC web-site and any other web-site
Ban any politician who utters a single word about business or economics
Ban 24 hour news
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Robert the BBC this evening reported that 6000, jobs have gone this week? the problem is all the jobs losses mentioned where from companies employing 1,000 staff or more. what about the jobs losses for people who worked for much smaller buisness. Or dont these jobs count. I suppose its a good way of keeping the unemployed job figures down.
There are 12 million working for small buisness you know
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Oh please! "Conservatives being Conservatives" don't make me laugh. only the Conservatives could sell off all of the public utilities at knockdown prices on the grounds of increasing competition. So what do we now have? A "market" that doesn't work owned by foreign conglomerates.
Is Labour any better? Well actually NO. So we are left with a choice of 2 failed political parties.
This coming debacle won't be like any recession that we have ever seen. It won't be over in a year to 18 months. This is going to be global and last for the best part of a decade. If we are to survive as a nation - yes I put it that strongly - we are going to need strong central leadership and control. I don't see that coming fro either Labour or Conservatives
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I am not in the business of public sector bashing' says 115 'but .. they need to share a bit of the pain. Time for a serious hard look at some of the sacred cows'
Well, how about Parliament being able to give our Quangos an OfSted-like interview - appoint one or more groups of top auditors and similar senior professionals to the second chamber as Lords of Public Account, able to require the Chief Executive and board of any Quango to appear in a Committee room and explain their spending, recruitment and performance; answer questions?
Ah, I know, turkeys and Christmas...
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#164:
Winners need a functioning country and currency to enjoy it. I am a winner, but anticipate difficulty collecting on it, hence my legitimate concern at being lied to.
Also, variable-rate borrowers' relief is likely to prove short-lived, and fixed-rate borrowers who miss this opportunity to refinance may come to be thankful. Taking a variable rate mortgage deal right now amounts to betting your house on the continued credit-worthiness of government over the duration of the loan. I sense a whipsaw in the making and more feelings of betrayal.
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I maybe dense but over the last year haven't we seen
a) huge falls in oil prices
b) huge falls in other commodity prices
Is it therefore surprising that output which is expressed as an index based on a proportion of GDP has fallen?
NOOOOOOOOOOOOOOOOOOOO
Or am I missing something?
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Robert
Can I suggest a nice course of seroxat - good for depression and anxiety - combined with a bit of physical exercise guaranteed to make you feel better followed by a little holiday on a tropical destination.
If you smoke, stop it, despite the financial contribution
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Please, I really need to Know:
If HMG had not bailed out the banks, and some of them had gone against the wall with a wollop, no a real wallop, where would the UK economy stand now?
Sorry to sound thick, but I can't see why they weren't let to go in the first place.
Any views?
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#166:
Was that not tried in China last year? Exports dropped anyway. No short trading either. Stock market down 70%.
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I note with (self) interest that there is a lot of talk lately about the strategic value of manufacturing.
Having spent the last 25 years in the engineering trade, myself and thousands like me could have told the world out there many moons ago that engineers are not as daft as they look.
Just tell us what you want us to make and we?ll make it. And we?ll instil a sense of pride in our workforce. And we?ll earn some foreign currency. And we?ll bolster local employment numbers. That?s not difficult.
The obstacle to progress is class.
Working class kids are skint, so they just have to move around to wherever the money is.
Middle class parents would rather see their boys and girls going to work in a secure well paid and well respected profession like sales, media, IT, insurance.
And the PSM?s (private school mums) definitely don?t want their kids anywhere near a welding torch?unless they own the firm.
Result?.chronic shortage of talented youngsters coming in at the bottom levels?.dearth of decent managers coming up from the shop floor?.DECLINE, DECLINE, DECLINE?.
Sort your attitudes out my fellow Brits and we can sort the engineering and manufacturing industry out. And I think we?ll go a long way towards sorting the economy out too.
Just give us a bit of time??twenty years say!
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#142
I Agree - people who borrow money often make the mistake in thinking that the money they receive is theirs - it isn't.
Similarly - last year we borowed 11 billion in the last quarter - to maintain the economy on the same scale we would have to borrow ANOTHER 11 billion (which is why the Government wanted banks to lend at 2007 levels!) This is the root cause of the bubble that has been in place since 2000
Instead we repaid 11 billion - that means 22 billion left the UK economy (another 6 billion left to go abroad but that is another matter).
I thus expect the economy to contract to at least 2000 levels (having said that - I dont remember 2000 as being regarded as a depressisng time)
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I'm sorry, but sensationalist comments from an individual (Peston) and organsiations like the BBC (just for ratings) don't do anything to help. Do you idiots realise the damage you are creating by sensationaling the issues? (ratings and future book deals are everything to you, no doubt) The main reason the public become wary is your 'sensationalist' comments. Bugger all to do with reality (Peston, the Jonathan Ross of the financial World....)
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#151 - OK I´ll answer your question.
The UK will print money - as will the US and a lot of other economies. They will try to deny the extent to which they print money, and come up with a bewildering myriad of (often contradictory) justifications for their actions. No mainstream political oppostion will exist to this policy.
They will print money in order to devalue the domestic currency, and imagine that their own unique intelligence will enable them to inflate away domestic debt and achieve a competitive devaluation. The fact everyone else is thinking the same will not occur to them.
The long term problems of such a strategy are obvious to anyone that cares to observe. The UK elites are assuming that the general population is obsessed with trivia and, in the short term, can be persuaded that Zimbabwe is simply the name of a game show contestant.
The major potential dissenting voice to the doctrine of the competitive devaluation game is Germany and its economic satellites. German reticence in this regard does not bode well for the Euro - and hence ultimately the German enunciated position will be rendered worthless by Euro zone frictions.
Therefore either willingly or not everyone joins the competitive devaluation throng. Future historians (if there are any) will then write Phd papers on how competitive devalution in the early 2000´s achieved precisely the same result as the erecting of trade barriers in the 1930´s.
To all those other people who seek to identify winners and losers: There will be only losers. Everyone loses - it´s just a question of timing.
Not all problems have solutions, but seemingly no-one wants to hear that truth. I think that it´s the Bible that advises man "to fear not the truth, for the truth will set you free" - and what more does anyone need than to be free?
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The cause of the current financial crisis was the high price of oil/energy due to ever increasing demand and boosted by commodity speculation.
It was fairly obvious in late spring 08 that the price of fuel in the UK would hit 2.00/lt by XMas if demand for oil continued at the same rate
(we were insulated from the extremes of the price rise due to 2USD/Pound, conversely we have not benefited as much from the price fall due to 1+USD/Pound)
The high price of oil hoovered up all of the cash (which was spent on islands in the sea) leaving the banks in the US with no option but to begin calling in loans in order to maintain liquidity.
It then became apparent that bad debts (sub-prime) had been parceled up, sold on, parceled up, bought back, parceled again and sold on again the banks became nervous of lending to each other because none of them knew if the parcel they were holding was ticking, all they knew was that there were ticking parcels out there, not how many or who had them...
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...Financial markets suffered a crisis of confidence (these markets are high pressure and fast moving, confidence is very volatile)
This lead to a loss of confidence in all markets including domestic.
High value first, houses, cars etc. followed by lower value, white goods, electricals, non-essentials etc.
The knock on effect is that suppliers suffer falling forward orders from customers, manufacturers from suppliers and back up the chain, commodity (raw material) prices fall as manufacturers demand falls.
The price of oil falls...
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...Normally this would be self correcting, as prices fall consumers (wherever they are in the chain) start to come back into the market and demand grows again.
But the current economic system relies very heavily on economies of scale and those scales are falling.
We are highly likely to enter a scenario where demand for goods is falling but prices start to rise (fixed costs \ units manufactured)
(think mobile phones, now available for less than a tenner at morrisons, solely due to phone manufs selling 12 billion units+ in the last 10 years, if they only shift 3 million this year what will the cost per unit be)...
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...This is the real economic tsunami that will be truly global in scale, we haven't seen anything yet
LCD tele's were only getting cheaper because we were consuming so many of them.
As the first waves of recession come over us and demand starts to fall, those items that are already in the supply chain will be discounted in order to maintain liquidity but new items can't enter the chain at those prices
It doesn't matter how low commodities fall, they are only a small part of the process by now, it is the process itself that adds the value and in order to extract value from the process, it needs to be running at full tilt...
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...Every high volume manufacturer wherever they are in the world will suffer. Every high volume manufacturer is supported by lower volume manufacturers who will suffer as a result, all of the service industries that support both high and low volume manufacturers will suffer.
This is really quite serious.
Whose fault it is is largely academic.
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What happens next ?
Well as far as I can see it, Gordo and Co want to stimulate demand in order for the economic process to get going again, spending on a massive scale on anything (but preferably infrastructure) might just do it (it's the lack of spending that is clogging up the process) but as the UK hasn't got any cash, he will have to borrow it.
This is risky cuz it might not work.
If it does work then we will be saddled with huge debts which will put a drag on any growth.
He thinks that 'quantative easing' or printing money will devalue the currency thus inflating the debt away.
As long as we get in first then we have a good chance of coming out with a head start on our neighbors.
This has already started, they announced big spending plans and the presses have been rolling since early december.
It is however a big gamble.
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So what do Dynamic Dave and Gorgeous George think we should do,
oh thats right,
cut public spending,
a few tax cuts for the wealthy,
err, government guarantees for business loans, cheaper money for the banks,
smaller charges for the banks.
and this is going to help ? how ?
I imagine if we had any public assets left he could always sell them to us.
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#170 'hence my legitimate concern at being lied to.'
I wouldn't worry about it mate, they have been doing that or being economical with the truth for generations
We all know about 'peace in our time'
but we have also had 'a new era of cheap electricity' when they opened the first nuclear power stations at the end of the fifties
'the white heat of technology' in the sixties when they claimed we would all have more leisure time (oh yeah, we got that in the seventies, they just didn't say that all the lights would be out for the other four days)
'Crisis, what Crisis?' in the seventies (I keep expecting AD to come up with something similar)
'There is no list of 60 pits to close' in the eighties
'Ethical foreign policy' in the nineties
It's when they forget themselves and start telling the truth it gets spooky (fortunately that hasn't happened yet)
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Then again what do we mean by 'our' manufactoring. I recall how popular it has been to tap into the vast global capital investment by......well....by selling everything we have (our nuclear energy industry probably being about the last scrapings we still had to left to sell).
So we now have the issue of whether to pump huge sums of taxpayer's money into companies that are foreign owned when come the upturn (if it ever arrives) they will reap the profits.
I for one find the constant drip drip from Downing St, that's it's a 'global problem' a 'global downturn' global, global..... pretty irritating. I recall the constant predictions of demise for those that didn't wholeheartedly embrace in all the joys of rampant globalisation. I've been anticipating the collapse of France and Germany since the mad dame kept telling us 'there is no alternative', but I believe they got it right, not us. Of course they will suffer in the anglo-saxon recession but in my experience the continental quality of life has far outstripped the UK for decades.
One day, I would love to hear Mr Brown (and the invisible Mr Blair) apologise for following such disastrous thatcherite policies.
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#175 fridgelad - spot on. however, you may be pleased to hear that quite a few in the 'it/media/law etc' professions have been suggesting trades for their kids (including me) because these jobs are not easy shifted abroard (mr brown and his motley crew have been actively encouraging offshoring and backing it with taxpayer's money).
exactly when did the lunatics take over the asylum?
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Allmyfault/Glanfon
NOT DAUNTED BY THE SLAGGING!!
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RE THE TORIES:
THE DO NOTHING PARTY LABEL IS
STICKING!!
DESPITE THE NEAR COMPLETION OF
THE FULL CIRCLE OF ECONOMIC
SUICIDE BY LABOUR.
GORDY ALLY D & MANDY ARE
WINNING THE SPIN EVEN THOUGH
THEY ARE TAKING THE UK INTO
ZIMBABWE ECONOMICS AND NO
DOUBT BACK TO THE IMF AS PER
THE 70s. . .
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It seems so clear to me that whatever policy the government adopts now it will make little difference. Economics is no more a science than astrology, which is why nobody ever agrees or reaches any emperical truth. There are a few broadly descriptive ideas and a little maths to help provide a compass but thats all.
Towards the end of the second world war we all know the stories about Hitler moving about non existant divisions from his Bunker. This is where we are today.
Politicians have only one primary concern - being elected and keeping their hands in the till. Why else would they hate telling the truth. Most of the time we want and need someone to tell us not to worry and to trust them because they know best. Most of the time it may even be true. That way we can get on with our lives and always blame them for things that go wrong, even when we should have known better and made different decisions. In our current situation They have not got a clue. They all argue and disagree and blame and shrug and hope and posture. Just as we all are. This is one of those moments in nature - the stampede, the panic. We grazed too long at the waterhole and have become surrounded. Some of the herd will be consumed during the escape. The best place to be in a stampede is right inside it and just make sure you do not fall.
No one likes to lend money to people who are known not to pay it back. Only when this global debt bubble is fully deflated will we reach terra firma. Only when job worries have receded will people feel confident again. This cannot happen until nature takes its course. My guess is that our economy will contract by 10% +. Forget the silly economic predictions of 1-2% GDP. This simply will not deflate the bubble.
Years of depression to come but most of us will keep our jobs and homes.
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Robert,
Many of your readers are convinced you are a mouthpiece for the government.
Thanks for confirming it.
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RE MANUFACTURING IN THE UK
FOR AN OPENER BUSINESS RATES
MY LAST UK FACTORY AT 230,000sq
feet; the BILL WAS £419,007.34 PA.
To compare with similar charge in
POLAND/CZECH REPUBLIC covering
a total of 964,000sq feet total
tax approx 63,000 PA Sterling.
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So industry is one fifth of our economy and decreasing by 8% annually.
It is amazing that we are still here; maybe we should be grateful to the bankers for creating their illusions, undetected for so long.
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#1 im sure labour will be out of office for a generation possibly for ever.....ive always been a labour voter but no way will i ever vote again for them...brown is a disaster....even thatcher now looks good. we need another government quick before to much more damage is done. an example of brown..."we have trebled the cold winter allowance" wow from £8 to £24!!! wow....and as long as its 0c for 7 days in a row......pensioners and "others" will qualify.....great so if its -6c for 6 days and 1c for the 7th...u get nothing.....who are the brilliant minds that work these figures out? are they the same brilliant mathematicians that got us in the mess in the first place?
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At 04:22am on 10 Jan 2009, BobRocket wrote:
---------------------------------------------------
So, Mr. Rocket, do you think that the £125 billion per annum that the taxpayer stumps up for Quangos is money well spent? Especially given that they are unelected and unaccountable? It would be easy to cut public spending without hurting public services. Quangos are not public services, simply fronts for the government to make decisions without reference to anyone, and to piss our money away.
As for everything else you accuse the Tories of suggesting policy-wise - well, the 10p tax cut got the poor to pay for the better off, and the National Socialists are today proposing all that the Tories have to get loans to businesses going, and then to piss even more money away to help people get mortgages and to cover bad debts. Just read today's papers.
So what, exactly, is your point?
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AC,
Good to see your still here!
Keep up the good posts.
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114 Somali Pirate!
You like to innovate? So why didn't you take then pump out thousands of barrels of oil, and then let the ship go? You could have built a small refinery with the ransom money. Go legit, see?
GC
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Now that the roulette wheels have come off Gordons e cycle ,he will have to find another use for his balls [no longer bob bob bobbbing along to the tune of things can only get better ] before he gets castigated for missusing resources.
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Even without quant-easy, inflation is going to get quickly out of control. For example-
problems posting -split into two.......
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Even without quant-easy, inflation is going to get quickly out of control. For example-
---- problems posting----
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RE OFFSHORE PRODUCTION
COST TO UK RE MY BUSINESS
Approx 5650 jobs
Loss of tax/NI :£29,380,000
Benefits paid :£45,200,000
For 5650
Rates :£ 2,000,000
Support
Industries :£15,000,000 est
ESTIMATED
LOSS :£91,580,000
BALANCE OF PAYMENT DEFICIT
ADDS CIRCA :£680,000,000 TO
DEFICIT.
THIS RELECTS THE COST TO THE UK
OF ONE BUSINESS GOING OVERSEAS.
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I reckon I spend probably 75 percent of my disposable income on foreign sourced products. These imports are still going to come into the UK at 30 percent higher prices as a result of the new terrible exchange rates, because we have no alternative sources -apart from Bulgaria, Ukraine, Belarus, Iceland, Zimbabwe.
Now why would zero interest rates, which beget a terrible exchange rate, be to our benefit? We are a hugely net importer, we haven't much to export nowadays. And when we eventually sort out our manufacturing sector we can alter the currency to suit export trade.
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I reckon I spend probably 75 percent of my disposable income on foreign sourced products. These imports are still going to come into the UK at 30 percent higher prices as a result of the new terrible exchange rates, because we have no alternative sources -apart from Bulgaria, Ukraine, Belarus, Iceland, Zimbabwe.
Now why would zero interest rates, which beget a terrible exchange rate, be to our benefit? We are a hugely net importer, we haven't much to export nowadays. And when we eventually sort out our manufacturing sector we can alter the currency to suit export trade.
sorry - data at roof level nonsense tripping up my posting... cant tell why
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We need an influx of foreign capital into our banking system, we dont need to steal from our own savers!
-oh and we also need to become a low-tax, high incentive economy. I reckon our true tax burden is probably two-thirds of gross income.
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apologies, real problems posting
continued-
Spanish fruit and vegetables
South American beef
French flour and dairy produce
European wine and lager
Indian and SE Asian clothes
Vietnamese trainers
Chinese electronics goods
Flat screen TVs
German/Italian (read Polish & C.ech) white goods
Japanese cars (I buy German, sorry)
Middle Eastern oil
IKEA furniture
American software
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No 12 says: "Thank God we are "best placed to whether the global economic conditions" or whatever our Glorious Leaders claim."
the government leaders must be working from a crib sheet, since that is exactly the line being taken by our glorious leaders in Canada.
It is perhaps Freudian that my speech recognition program interpreted "line" as "lying" in the previous sentence.
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I have worked in eco dev at a senior level more than 4 years ago and though I did not predict the recession, I was strongly against the Govt policy of letting manufacturing decline and to be a single trick pony in riding the success of the City.
I believe that a country did not create value by "making" things would be at risk. We constantly advised businesses about the risks of having a single product and not a portfolio and we had a country with about a quarter of the GDP coming from the City!
What is needed is a scrapping of current misguided eco policy. Ignoring the isolated regions into economic decline has to change.
Supporting an innovative manufacturing sector is perhaps why Germany is not in as dire straits as us
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I always thought it was only high risk gamblers who tried to spend their way out of trouble?
Millions of people in this Country, who have tried to live their lives sensibly, feel betrayed by the 'spend now, pay tomorrow' philosophy of this Government.
Mind you if we are debating nationalisation - don't bother about the Banks - go for the energy sector - that's where all the money is !!!!!
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there are numerous commonalities between our situation in Canada and yours in Britain and I suspect around the developed world. In Ontario we are becoming a de-industrialized province, a trend which has accelerated due to the "recession".
It is questionable whether or not our societies can survive based on providing services internally alone.
About the only way that I can see out of this morass is to focus on industries requiring high levels of skills and education and to emphasize those in educating our youth.
From personal observations, including those based upon my own kids, I informed the belief thatwe are wasting the talents of many of our students by failing to teach in ways that recognize their learning styles. In the days of the one room school house, which you in Europe may never have experienced, there may have been some excuse to teach using a single teaching style. In major urban areas this is no longer necessary and it should be economic to cater to the learning styles of groups of individuals, provided that we develop techniques for identifying them. We then need to have teachers trained to teach in the styles we have identified.
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RE MANUFACTURING
ITS TIME FOR BACK TO BASICS:
CLOTHING
FOOTWEAR
FARMING
DOMESTIC PRODUCTS
LETS AT LEAST CATER FOR OUR
BASIC NEEDS????
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there are times when I wonder whether a strong dependence upon constantly growing consumer demand is at the root of many of our problems, from a longer-term point of view.
In addition to stimulating the economy perhaps we should be dusting off ideas like work sharing and shorter work weeks and sabbaticals and longer vacations to spread the work around.
Perhaps we can no longer grow our way around our social attitudes.
To be clear, no one solution will get us out of the morass we are in and that equally well applies to work sharing schemes as it does to strong stimulus for the economy.
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106 kikidread
If you are going to use one of Lenin's quotes, use it in full. You missed the end part - "...but quantity has a certain quality all of it's own".
Which actually reverses the meaning you were trying to use
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There are also times when I wonder how much of art apparent inability to "solve" this crisis is due to our attitudes on wealth distribution. The houses are built; the cars are on the road. Someone may as well be living in them and someone may as well be driving them. And if there is someone doing that the decrease in house prices and in the value of security for our loans should end.
Would we not be better off to rent out those noses to those living in them and to lease those cars to those currently driving them at rates that they can afford. If this goes on much more none of us will be able to afford anything.
This problem is a classic example of a positive feedback loop where the effect of a change is reinforced. The more house prices decline the more people find themselves in the position of having negative equity. The more asset values, such as cars, decline the less collateral the banks have for loans and the less they lend. The cycle continues until something stabilizes it.
Layoffs resulted in more layoffs. We have to break the cycle somehow, and we may need to cast aside our previous attitudes on what constitutes good economic policy to do so.
That is a difficult thing to do because we either have no experience with the consequences of doing this, or the experiences we have had have been negative. However, the alternative of doing nothing appears to be worse.
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welcome back Alexander C. Hope you've warmed up now!
Absolutely right-we need support for 'home grown' industries, and we need it now.
Some months ago another poster was predicting food shortages, and the availability of fresh groceries was declining in supermarkets.
I read on here that many high street clothing stores have little stock on the shelves.
As global downturn affects countries around the world, our importing nation will find it harder and harder to find goods to import.
Intervention will be no good in 6 months when the shelves are empty. These products take time to grow and make.
We are currently so reliant on outside suppliers, sitting around looking at each other, saying 'oh woops' let's chuck money at the banks won't put food on our plates.
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I think the manufacturing downturn and specifically the trouble facing the motor car industry is a great opportunity to benefit all of us . . HOW?
Use the skill and capacity of our present manufacturing base to create the new energy efficient technologies which will cut consumption of the non-sustainable and expensive carbon fuels, reducing our reliance on energy resources out-with our control, heating homes and businesses at less cost in monetary and environmental terms.
DO NOT BAIL OUT . . . CHANGE TO PRODUCING PRODUCTS WE NEED.
Heat Pumps, heat exchangers, insulators, sustainable transport mechanisms etc. etc.
It?s a great chance to retool these dinosaur industries and create a new sustainable beginning.
Come on the politicians . . . what are we paying you for . . . . get moving . .
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Anyone seen the news about lloyds tsb breaking US sanctions and getting fined?!
They were still doing this as recently as 2007!
And on behalf of Iran and friends!
Correct me if I'm wrong, but don't these countries fund terrorism on a large scale?
That was one skeleton in the closet I wasn't expecting!
And we've bailed this bank out?
*********! (me swearing!)
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all my life ive been sensible borrowed sensibly acted sensibly bought sensibly....mr sensible with 2.2 kids..you might say...but now to hell with all that lets drink borrow spend gamble...who gives a toss....good old gordon brown thats 1 person u have wrecked.
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For those claiming there's no nationalisation - with a big or a small N - I have just four words to say: Northern, Rock, Bradford, and Bingley.
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163 mark the yorkie
I must be in a parallel universe.
War - goods and good at it. Hmm Afghanistan. Should never have gone there.
As military equipment has gone ever upwards and ever more expensive two things have happened. 1 People without money who still want to inflict damage, ie go to war have said we are not playing that game. How about humans as bombs, how about seizing rountine equipment such as an aeroplane and using that as a missile. 2 Conventional armed forces have become ever smaller.
Terrorism is far more resource effective than coventional warfare. Unfortunately that seems to be the growth industry. Do you really understand how obnoxious the West lecturing and trying to use capitalist advantage is to other countries. Bush and Blair have sparked more emotion and motivation than Osama could have.
Funny, I seem to remember having a humdinger of a row about this conventional war thing once. I went along to a forces recuitment. I applied mainly because family had been in the forces and seemed to desire I was too. I should be officer material disappointing if not. I wasnt terribly convinced but went along to see what was what, if you want choice you have to have options and look at them. Everything seemed to be going along sweetly passing this test and that test until I said in an interview I could not see how conventional forces could beat a terrorist organisation supported by a significant proportion of the population. Oh no I was told. Sufficient technology and skill and organisation etc etc. When I said I thought it was misguided what made you think you were superior to a motivated terrorist across the desk faces got very red and angry. Goodness when I said the continued development of that as a strategy could be interpreted as simply the justifying an entire structure and culture of the armed organisation which wished to selfperpetuate along an evermore fractured course there was quivering. Seemed to really upset. Further I suggested that whilst armed forces stuffed full of really good people and equipment were excellent in some circumstances (and they still are) they were devisive in a situation which could only be resolved by economic or political intervention and because conventional presence policy was being prominent they could be target practice and prove a distraction to progress - I was thrown out. Told I would be inappropriate recuitment material undermine morale presumably. Hmm Vietnam. Northern Ireland, Afghanistan etc.
As far as equipment goes - The more sophisticated a device the more things to go wrong. Helicopters grounded by dust. Helicopters grounded by failed password entry.
Sorry but I think it topped out with the Klashnikof. Brilliant design. Primative, robust. Available everywhere. You can buy them illegally on the streets here according to news reports. How efficient at killing humans do you have to be, particularly unarmed civilians who seem to be the main casualty of conflict. The Klashnikof suits terrorism, the main industry. Human savvy not equipment is the key weapon as I see it.
So you see my position rightly or wrongly goes back a long way. I believe the solution to war is social economic political, preferably proactive, it is seldom sophisticated high tech equipment. You could be right but you will never get my support. If you develop something really good at mass killing like chemical weapons WW1 or nukes WW2 they get banned, dont you find that self limiting. If the total amount spent on a war was input into a country before the war got underway there would be no war. Most war is driven by seizing asset ie wealth or fuelled by poverty ie wealth. Destroy the motivation and the war should disappear.
I have been in a warzone and seen teenage Brit soldiers sleeping under convoys exhausted doing the job, effective, at the very least equal to other countries. I admire them. When they are injured they should be given every support, and families too. They should not be used casually.
Policies or strategy thats a minefield. Industries producing high tech equipment to give diminishing returns of killing. Hmm. No thanx.
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#217 thats a good point.good old lloyds tsb....and and and did you happen to see that northern rock(the bank that we all own) ha ha...good joke brian.....paid anne goodbehere 900,000 grand for 11 months work...and poor girl...shes had enough...wow what a surprise.... its a damm shame about the 1300 rock staff put on the scrap heap.....
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#220 been in a war zone....people that have been in war zones dont talk about it......believe me.(ok).....there are better things in life.
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#214 Star_Trekker wrote: "This problem is a classic example of a positive feedback loop where the effect of a change is reinforced... The more asset values, such as cars, decline the less collateral the banks have for loans and the less they lend. The cycle continues until something stabilizes it."
True.
Leverage is a ratio, and ratios can be reduced by varying either the numerator or the denominator. The "something" that naturally stabilises the cycle is reduction of debt burden to a level serviceable by available income, ie shrinking the numerator to produce a lower ratio. You do this by saving and paying off debt or declaring bankruptcy. Then you can think about a new lending cycle.
The government is attempting to protect the debt burden, which only results in the waste of income and the destruction of the means to produce it, ie creating fake additional denominator (printing money) to produce a lower ratio. The problem is the numerator is an exponential function and you know what happens if you leave those unattended. Exponentially growing leverage - Just Say No.
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#211 AlexanderCurzon
- hey, and racing engines too please!*
GC
* pref not MGBs LOL
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222. I've been in a war zone as a combat infantryman and I talk about it. What's the problem?
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#223 in simple terms you are saying the government couldnt organise a booze up in a brewery........right.....
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#225 me to....and i dont talk about it....its not the thing to talk about here.....or any where.
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At least people are now contemplating a new capitalism. Perhaps it is the politicians who now stand in the way of its birth!
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Most economists/governments suggest that the magic bullet to solving the credit crunch problem is for the banks to free up lending. The assumption (a very major assumption) is that if only lending could resume then people/businesses would borrow, people would then spend, businesses could keep going and recovery begin. But this assumes that there is an unfulfilled consumer demand. Is it not much more likely that the demand for non-essentials will drop very significantly? For example, to take just one area of spending, there must be many like me who, in the fool?s paradise of ?the good times? would have splashed out and replaced their four year old car (still perfectly serviceable) will now defer their purchase? The prudent person will either save his money, uncertain as to what the next two years or so will bring, or will pay off some of his accumulated household debt, or will reduce his mortgage to avoid negative equity. As for new mortgages, first time buyers will be saving for the higher deposit now required, rather than spend on other things. Those with the necessary deposit will only buy if they absolutely have to, knowing that the value of the asset they are buying is going to drop by 15-20% in the coming year. As for businesses, those in any non-essential area of goods and services must be facing great uncertainty and would find it very difficult to present a convincing business plan to his bank-itself in dire straits and understandably risk-averse.
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#229 you really talk sense...theres so many decent people on here that know so much....its a pity we are saddled with a bloke like brown that knows so little.
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From this site:
"Students who are unable to secure jobs after leaving university may be offered paid internships for three months.
Ministers are worried graduates could swell the ranks of the unemployed and have been holding talks with employers to try to find a solution. Four top firms, including Barclays and Microsoft, will take on some of this year's 300,000 graduates.
It is part of a package of measures due to be announced when Parliament returns from its Christmas break this week.
Ministers are due to hold an economic summit, where they are also expected to outline plans for more guaranteed loans for small businesses."
Hahaha!!!!!!!!!!!!!!!
'students who are unable to secure jobs', 'may be offered', 'Top Companies like Barclays', 'ministers are worried' 'outline plans', 'package of measures'..
How they love their packages of measures! They always make a profound difference. And when I look out the door the sun is shining.
Excuse me while I p*** myself laughing.
GC
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#175 Fridge lad
I think you have nailed one of the underlying problems there. Good post.
The bloggers here seem to be divided up between the pragmatists and those who still want to talk about financial instruments and unblocking the financial system etc.
I see the problem in the financial system simply as an expression of a much deeper malaise.
All you can hope to do with playing with the finacial system including the printing of money is to temporarily repress the symptoms of the illness, it will never offer a cure to the illness in itself.
Many people are still under the illusion that the financial system is the system. It is not, it is only the servent of how we work and live, a way to 'oil the wheels' of creation and diversity.
You can not eat printed money or wear it to keep you warm or use it to build a house out of or watch it perform in a west end theatre. There is still huge arrogance amongst the so called financial 'masters of the universe'.
The truth is they took the world for a greed driven ride and need to get used to the idea that they are the servents of a greater system, not the system itself and deserve no more than is reasonable for that system to give for thier services.
The system itself comprises Engineers of all kinds (electrical, software, mechanical, building, infrastructure), doctors, scientists farmers and artists of all kinds. The people who create the way we live and maintain it, the ones who can help us to live more interesting lives and maintain our basic needs of food, shelter and healthcare.
This country in particular seems to have looked down its nose at the people I have mentioned above. Let me ask those people one question.
In a major world correction, the start of which we are just beginning to see. Who would you rather have at the healm?
Bankers and lawyers who run the show at the moment.
Or
Engineers, doctors scientists and farmers? And who should be held up to as aspirational figures in society? Who creates real wealth? Who should the media be concentrating on in a public spirited way such that the youngsters look up to such people as aspirational figurers?
Look at the media now. If it is not Jordan it is Jonathan Ross, or in more intellectual circles thier equivalents Bankers and lawyers respectively...
The financial system is simply showing us the disease and can help us to 'relieve the symptons up to an extent. But it can never be the cure in itself, that myth has been exploded.
The sooner the powers that be and the people realise what the underlying cause is and start to make decisions based on redressing it the better but we have greated a monster here and it will neither be painless or quick to tame but it is a worthwhile effort to do and people need to get motivated for it, which the media must play a socially responsible part.
Jericoa
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This government would have us believe the sun rises every morning due to their thankless stewardship.
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Student FAKE JOBS
Another pathectic WHEEEEEEEEEEEZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ
WHEN WILL THESE PIOUS IDIOTS
CALL AN ELECTION???????????????
THE INDENTURED JOBS? A NEW
SLAVERY TO PAY BACK THEIR LOANS,
NO DOUBT TO STOP THE STUDENT
LOAN CO CALLING IN THE
ADMINISTRATORS AND FIDDLE
THE UNEMPLOYMENT FIGURES YET
AGAIN.
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232 jericoa
financial instrument?
That would be a fiddle would it, as in Nero or there again fiddle and accounts
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this pious government wont call an election...labour would be wiped off the face of the earth......but brown hes doing ok.......for a bloke whose never done a days work hes doing ok.
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#234 - most of us seem to want just that!
Brown will never leave of his own accord. He doesn't have that kind of imagination. In fact the less popular he becomes the more he seems to want to hang on. But if the Tory Party and Libs could just, for once, bury their differences for the sake of the country for once, they could sink Brown in 24hrs.
But.
My take is that due to overwhelming self-interest neither will do so, preferring Brown to paddle on charmlessly creating more and more wreckage till he finally goes by one means or another and they can come 'riding to the rescue' and start with a completely clean sheet of paper, utterly blameless for anything in the past that they would ordinarily be held to account for.
Anyone who wants a contemporary election and plans to vote for a single party government - that is the LAST thing this country needs now. Never forget how badly the Cons government handled the last recession, there is nothing said nor written by them to suggest that they, on their own, would be any more, sophisticated, successful or thoughtful now than Brown himself, esp given that the whole party actually seems to be run from behind the scenes by a bunch of clueless, thoughtless and self-centred dugouts and grandees who date back to Black Wednesday. Brown knows all this of course which is why he isn't in the least afraid of Cameron.
GC
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232 jericoa
Look at the current behaviour of the so called underclass for clues, because many more will end up there. A lack of prospects and becoming disempowered changes behaviour I have been in that community and seen it. If you think this joyride will make society more intellectual or focused it will not. Being poor means you know how many slices of bread there are in a thin sliced loaf, ask any single unemployed mother with kids. A certain level of unemployment makes for a more cost efficent economy. Too high and it causes problems. The unemployed are easy to control by a government, comply or starve.
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Its TIME:
THAT THE DO NOTHING PARTY GOT
OFF THEIR PERCH AND SET OUT TO
CRUSH NEW LABOUR AND THE NEW
LABOUR SPIN MACHINE.
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#232 Jerichoa
I totally agree. Trouble is the dinosaurs still believe that they have control!
We always knew that "if it's too good to be true -it probably is" yet we let the financial overlords to create a smoke and mirrors syndrome which meant that we needed 'experts' to explain what other experts were doing with our money. The idea that a nation of our size could exist forever by making money from making money and not investing in tangibles was ridiculous.
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229 speaketh the truth,
Basically no amount of tinkering will change anything, at the end of the day the banks have run out of folk who they can lend to (IMO).
The rest are too scared to lend, this recession is going to be a severe one.
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galnafon, i think you are wrong when you consider the unemployed.
Think back to the riots in Liverpool where the slogan was "there's nothing down for you lad". That will be like a picnic when we see unemployment topside of 4 million and a Conservative demand to cut the dole!! It will create a vibrant environment for the far right.
There's no more dedicated convert to facism than a disillusioned socialist.
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219. At 12:02pm on 10 Jan 2009, RussWilliams wrote:
For those claiming there's no nationalisation - with a big or a small N - I have just four words to say: Northern, Rock, Bradford, and Bingley.
===
That's five words. You aren't an economist, are you?
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Re UNEMPLOYMENT
WE ALREADY HAVE 5,800,000 plus
on out of work benefits. . .
Some 1,200,000 off the system . .
Add in the 1,500,000 to 2,000,000
to loose their jobs by 2010
That gets to possibly 8 MILLION if
not MORE????
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#242 - according to AH, the most enthusiastic new members of his particular facist organistion were the ones (de fact of no particular alleigance) that had been beaten up by them...
GC
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242 foredeckdave
You could be right
The growth of the far right is likely.
If you go back to the Thatcher days you could pick up unemployment cash and do little in return. Those were the days of the travellers, old bus, no mot, no insurance, travel around and enjoy, just not on a lot of money. They have all gone. Thatcher got fed up with them so the rules tightened. It is prescriptive now, there are programmes. Being unemployed is now a full time job. lol. You could be right that a load of new intake who are used to doing something and organising for a common output and effect, cos that is all work is, have a bit more intent to disrupt.
Sorry got to go.
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#232 One of the best posts I've read here.
The moment we decided to become a "Post Industrial" society was the moment we sealed our fate.
We could get rid of our farming industry and be the worlds first "Post Food" society.
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why has nobody mentioned another "elephant in the banking hall"...millions of people have interest only mortgages with endowment schemes designed to pay off the capital at term .. ...unfortunately they are going to find out the endowment nowhere near covers the outstanding debt.....! More debt, more foreclosures, more bankruptcies, more bank write downs!
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What is New Labour? Tory redressed as the caring sharing party Blairs baby and many fell for it. It encouraged the greed look at how much money Blair now has and there should be questions about that does he really pay pole tax for five houses? why had brown not had an election apart from a lack of chose, the shifting in to place of people no one knows like Purnell and Burham, Flint but to name a few. The pushing of the Milliband boys as the next boys to take over. And what does Tories have Cameron god help us if we go down that path as he is not what he seems, worse than Thatcher, and Clegg what can you say about him nothing.
The selling and backing of the USA no matter what says we are in debt to them and are involvement with lobby's of the Friend Of Israel which says Blair is one of them a Zionist well how do you think he is getting his gongs from the USA and here Knight of the Thistle, since when was he a Scot.
Now we have Israel bring war to another country and being allowed to do it by the USA run UN which should be disbanded but people are being shown its their way or no way . Now we are having more of owe rights taken away it is happening in the USA first and carried on here as when WW3 kicks off all our yob, over weight gun totting kids will be shipped out, but now will have fathers who run the Govenment or run the country believe me.
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post 248 jolo
YES you are correct more MISERY due
to the INSTITUTIONAL LUNACY.
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222 rvpisneverinjured
Not in a warzone?
I was there as a tourist when all hell broke lose. Cyprus. On the beachfront. About 6 miles from the bombing run. Went up on the roof to only to see a loony firing at a jet with a rifle. Bombing runs remarkably like a movie. Convoy outside shipping people - civvies out. BBC Wolrd Service on the tranny saying all civvies evacuated. Jet comes in intent on strafing run. Sees red crosses on convoy deflects at last minute. Craters all the way down convoy. Sudenly BBC WS say not everybody out. Camped out at Brit base, you know the one. First action was to send armed convoy in to pick up nappies and baby food for mums sanitary towels for women and fags and booze to keep guys quiet. Back in UK first pic I see is the hotel in ruins. Hit. No I would say that was a warzone. I dont mention it very often. It was my honeymoon, I did turn and ask if somebody was trying to tell me something about the marriage. wee are still together. Just somebody says something and you dont like it doesnt mean it is not true.
Anyway I have to go. I have to stop tabbing across because there are things coming up online elsewhere.
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Give it a rest will you. Is bad enough having to live with the day to day reality without listening to smug know alls like you trying to prove how clever you are.
How about an article on how less severe the problem would be without the relentless media attention !
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# 198 guycroft re your suggestion that I could invest in a small oil refinery
I'm afraid that somalia's maufacturing base has shrunk even more than the UK's due to c. 30+ years of civil war etc
So we just don't have the infrastructure and there are hardly any government grants available here, perhaps because there is no government..........
Anyway just wanted to let everyone know that I'm ok though some of my colleagues unfortunately fell out of their rubber boat and some of the money got a bit wet
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On more serious matters:
I do wish that some parts of the media had a better grasp of % when quoting statistics, or could remember to state clearly whether they are talking about monthly, quarterly or annualised changes........ I've seen several very confused references in the papers and even on the BBC to the predicted 1.5% in UK economic activity in the last quarter
Anyway, I think we should take note that this prediction from the NIESR is for 1.5% in the quarter; that is 6% annualised! and in the quarter running up to Christmas when there should be much higher retail activity, which accounts for something like 70% of our total economic activity I believe
Is this unprecedented 6% annual decline just a blip? I would like to think so, but the NY Times is reporting this today:
'Given the recent scale of the downturn ? the nation lost 1.5 million jobs in the last three months of 2008, and economic output during those months shrank by 6 percent compared with same period in 2007 ? economists were highly uncertain about whether the economic plan would provide enough firepower.'
So there is also currently an annual fall of 6% going on in the USA and they are now saying that Obama's huge proposed programme of public works etc won't be nearly big enough.
A fall of 6% annually is very worrying, even for someone like me who believes that we need to move to a very different economic model based on sustainable energy-use, local production and consumption etc.
If anything far too many British people remain complacent. The more privileged middle classes are worrying about low interest rates on their savings accounts when the problems are potentially a lot more severe, and potentially very bleak for our children and grand-children.
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# 232 jericoa you make many excellent points and I certainly agree
Unfortunately a lot of the population here in western Europe and North America has been deskilled and has become infantilised through TV and celebrity culture. Our own leaders and captains of industry have cynically encouraged this whilst offshoring production and effectively 'hollowing out' our economies.
The last 20 or 30 years have in fact seen very little if any real increase in standard of living for ordinary citizens of US, UK etc but have bought into the consumer culture by leveraging their salaries to borrow more and more. Tens of millions of people earning £20k or $40k have been spending at double that rate.
So we must change but the transition is going to be so severe that there is a serious risk of the cure killing the patient!
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i am so excited the great alexandercurzon commented on one of my posts! see#250
and to #252 i am smug and clever, sold at the top of the market....no debts, moved out of UK, large garden to grow veggies in, young wife to look after me in my dotage....
a word of advice giveitarestwilluffs , dont blame the messenger, he is rarely to blame...!
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#252 giveitarestwilluffs
ffs, if we were all ostriches like you then we would be going "quietly into that dark night".
Nobody here has all the answers but at least people are prepared to voice ideas. You may not agree with all or any of them but they should make you start thinking. However, if you want to bury your head in the sand then don't visit blogs like these.
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#8 weejonnie is correct. I see nothing in the three policy suggestions of George Osbourn that suggest that the Toties a suggesting any form of Nationalisation.
Frankley, Mr Peston, for someone who is supposed to have at least some grasp of business and economics, I cannot understand how you think swapping Corporate Loans for cash is nationalisation. There is no equity stake in corporate loans. It wouold be different if the Tories were suggesting taking equity in companies, but of course they are not.
Rather than just make comments about such suggestions being a bit rich coming from the Tories, how about letting us actually have your views on the proposed measures.
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#234 Alexander curzon - student fake jobs
I agree but see it more as a tradgedy for the students.
Our youngest and brightest of a system 100's of years in the development are bereft of real direction and leadership. Our society has become grotesque with an emphasis on making money using money alone.
There should be something more worthwhile awaiting them to both aspire to and apply thier energy of youth to than government backed poorly paid internships at Barclays for 3 months motivated by a fear for what it will do to employment figures if they ' do nothing'.
They surely deserve more than that.
It really is a tradgedy for this generation in the making and an insult to all those who sacrificed in the past to try to build a fair yet creative society to see it carved up in an orgy of greed and arrogance at the top tables.
Give them something genuinely worthwhile to do.
I am sure the billions wasted from the 2.5% temp VAT reduction could have gone a long way towards creating something worthwhile for them to do, but it needs some serious soul searching to figure out what that may be.
The government think tanks need to start thinking outside the box a bit more and coming up with something to capture the nations imagination, intelligence, energy and morality in a positive way.
Jericoa
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somali-pirate at 254 and jericoa at 232
I am with you 100%, this crisis has been a long time coming and fostered by corporate greed with little social responsibility and political incompetence.
Sadly this crisis will be a long time with us and for many people and organisations there is no way back.
The end, my friend !
Resurection of the deceased is useless, time to invent new political, economic and social systems, give our youth a chance.
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#251 well done..cyprus is a fine place...i dont talk about where ive been...im not proud of it....im worried about today..now....we have a useless pm brown..thats the problem.
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252 giveitarestwilluffs wrote: "How about an article on how less severe the problem would be without the relentless media attention !"
Such an article, if written, would be a lie.
On fundamentals, if your cash flow is not rolling your debt, that is a maths not a perception problem.
On sentiment, give people silence and they assume the worst.
Experience shows people have a tendency to seek comfort, and a large volume of information and opinion presents them with a wide range of opportunities for self-reassurance and denial. Scarcity of information and opinion causes uncertainty and sows the seeds of panic, as people find themselves alone with their fears. A look at market performance in a selection of authoritarian countries is instructive. Sentiment turns on the head of a pin. Meanwhile thanks to the cornucopia of talking heads, paid and unpaid, in the Anglo-Saxon press, we remain locked in a debate still unresolved in the minds of the public.
Which is the superior method of expectation management if you had an interest in prolonging a semblance of market stability?
The above is generally true of large populations. There is a minority that tends to seek not comfort, but clues to means of defending their interests. The primary good of giving problems wide coverage is that they can. This country will need someone who is not ruined.
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Ok, so most people on here now agree that we as a global population and us as a nation appear to heading for a very dodgy time of it. (although the severity of it is still under debate)
What should be done ?
No-one seems to like the 'Spend it like it's going out of fashion' strategy favoured by most of our Glorious Leaders (and Saviour)
So what are the feasible alternatives ?
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256
Back. Have to flit again in a mo... Trade calls, doing well so far.
Anyway. Thank you dave for that post. It is not about agreeing or disagreeing it is about trying to present different perspectives which may or may be right. But above all giving somebody somewhere insight to the streetlife if they want it. Life is just a minestrone. The BBC only seems to talk to the big and the grand. There seems to be some panic amongst the powers that be. Crazy how cocky they have been, was it only 6 months or so ago there was only one lonely voice on the BoE committee saying iceberg ahead. I think Brown is trying to rewrite history and salvage his legacy such as it is. So he will not go till the last minute.
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260 rvpisneverinjured
Its not a prob mate. I am genuine in my admiration of anybody who goes out in a danger zone, and after care is poor particularly PTSD which is shameful. I just do not like war. You are right to question. More questioning from more people would not have got us here. My mother is buried out there. The old man was attached to 9sigs and they went out on tour later on and suddenly she was gone. She loved the place.
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Heard a man taking total sense on sky TV today Sir Ron Norman.
He said, this is no time to play party politics.
He said, manufacturing will not lead us out of this recession.
He said, we must spend and invest in our future, by bringing forward infrastructure projects especially ones connected with the production of energy.
A British industry you seem to constantly ignore Robert is my specialist subject ...Tourism.
Easily overlooked, because it is badly run by a government department called "Department for Culture Media and Sport."
Tourism is a grossly undervalued British industry, reformed and invested in could help dig Britain out of what is starting to look like a oncoming depression.
Tourism is the main economic driver of many countries economies and has enjoyed huge investment globally, but not in Britain.
Tourism has an outdated business model, which is totally unfit for purpose for this... The Internet Age.
Tourism has a failing grading system.
Tourism suffers from fragmentation at every level, including the marketing of Britain.
Tourism has had a total lack of investment in infrastructure, such as swimming pools, leisure and indoor facilities, upgrading of shabby coastal resorts.
Britain has a low marketing budget... No united front tourism marketing strategy...No strength of Brand Britain.
I also suggest build the Severn Tidal Barrier, it would be a green energy generating visitor attraction "Par Excellence".
I earnestly believe Britain's Tourism industry is in a terrible mess, but given the opportunity to reform, that could be changed round quite quickly.
The worlds population must want to visit a country that has give it a universal language.
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Despite Gordo's obduracy in wanting to wait it out, I can't see the rest of the party allowing the election to wait, things can only get worse.
Dave and George have shown their hand and not many want to bite.
No-one knows who the LibDems are.
The bookies think it will be Lab win some time this year, I still favour may (although not the 10th as this is not a thurs.)
So it will probably be more of the same
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Sir Ron Norman, wasn't he the chairman of the Teeside Development Corporation responsible for building lots of statues in the NE, Hartlepool and the like, wasn't Mandy from Hartlepool, didn't Norm have strong ties to teflon tony ?
The spinners are coming out of the woodwork.
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#265: "The worlds population must want to visit a country that has give it a universal language."
Maybe they don't.
Tourism does not create wealth, it only attracts discretionary spending from someone who has created it. Dubai figured if you build it, they will come, and spent eleven zeros building a ghost city resort. That monument to stranded capital must serve as a cautionary tale about infrastructure spending and in time it may become a legend to rival the Tower of Babel.
Tourism is right behind banking in something on which Britain cannot rely for wealth. Like our current banking model, it depends on someone overseas having money, and gives us no influence in whether they do or whether they choose to spend it for our benefit. If we go down this road, we could end up sitting and hoping someone has a good year and comes our way, like the locals in every cheap holiday destination we have ever visited.
We cannot get away from the fundamental truth: if you have not grown it, mined it or worked it, you have not created anything. So before we build infrastructure, we must ask what it will do for us. Another device to siphon foreign money (airports and hotels), or doing something for ourselves?
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#258
And it isn't just graduate students. This government and our society in general have badly let down the youth of today.
Take my 17 year old daughter - a bad experience of school through bullying (never properly addressed), she none the less left school at 16 with a great set of GCSE's but has no desire to study formally and want's nothing more than to get out into the world of work - to work and learn and pay her own way. Fiercely independent, creative, enthusiastic and full of ideas what is out there for her to get her teeth into - Asda, Morrisons etc.. or dull apprenticeships in business administration (slave wages with meaningless qualifications at the end of it). But the government have convinced us all that qualifications are good and employers won't look at you if they are not on your CV - as employers we have got lazy and have lost the skills to truely examine and understand the potential of our youth. We do this at our peril - we are wasting the lives of a lot of very talented individuals by not harnessing their energy - they are our future, the ones we will rely on to look after us in our dotage - we will have only ourselves to blame.
My daughter is not unique many of her friends have fallen into the same trap - gone are the days where her uncle a similarly bright young man could rise through the ranks to become the Financial Director of an SME without a degree and without accountancy qualifications. Nobody today tells him he's not up to the job because he doesn't have the right piece of paper!
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266 bobrocket
Conservatives heavily odds on to win, Lab about 5x price in places, across the board. From internet. GE odds search. You could buy and cover at the price quoted if your price is right. Sorry I query your price. Labour would break every known rule if won. MPs can go to the bookies too so I doubt a push. Some will be made redundant in due course it would appear, their employed families on their expense account also presumably. Perhaps they will enjoy Jobseekers. Now that would be interesting having an ex MP apply for a job. make a good reality show. Likely to be worse very soon, end of quarter is end of financial year. Quarter day always concentrates the corporate mind. Bubble boys still parachuting.
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#253 somali_pirate_SP500
From the Grauniad:
"Five of the Somali pirates who released a hijacked, oil-laden Saudi supertanker drowned with their share of a reported $3m (£1.96m) ransom after their small boat capsized, local sources said today"
Risky business, pirating!
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Hello Crazy Bob!
(Hope you don't mind the greeting - this is your nickname in our house)
I don't think it's quite right to say that the manufacturing sector is 'contracting at an annual rate of 8%' on the strength of one year's figures. Maybe it has 'contracted by 8% over the past 12 months', but your use of the present continuous implies an ongoing process, for which you would need several years' figures to calculate an 'annual rate'.
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#27 somali_pirate_SP500
"IN FACT THINGS LOOK SO BAD THAT I'VE DECIDED TO RELEASE YOUR OIL TANKER, ITS 2 MILLION BARRELS OF BLACK STUFF AND CREW INTACT; and all for a modest ransom of $3m (which I have not deposited in a British bank BTW)"
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I would watch out for a Hellfire missile fired from a Predator coming through your front door any day soon.
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Re: 106
106. At 6:08pm on 09 Jan 2009, kikidread wrote:
"Quality can be better than Quantity"
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124. At 7:05pm on 09 Jan 2009, JavaMan1984 wrote:
106, KikiDread
As stalin said 'quantity has a quality all of its own' ;)
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213. At 11:29am on 10 Jan 2009, Red Lenin wrote:
106 kikidread
"If you are going to use one of Lenin's quotes, use it in full. You missed the end part - "...but quantity has a certain quality all of it's own".
Which actually reverses the meaning you were trying to use"
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Actually I was talking about music, good music like reggae costs the same as bad music like I'm too sexy for my shirt by right said fred
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268: the fundamental truth is not as you state. You can grow it, mine it or work it but still be poor.
Wealth comes from adding to such basic inputs an element of design flair and competitive brainpower that people will want to pay money for.
The Dyson vacuum cleaner is one example. A previous poster quoted the Mini, for which there is a waiting list.
Our current elite have not noticed this.
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109. At 6:11pm on 09 Jan 2009, markyg_ wrote:
re 2 kikidread: "it's time to discard the rat race mentality and dependance on materialism that the modern world has become, which is a good thing really"
probably re also 103/104 and 106 which haven't passed moderation yet
Who do you think pays for the NHS and your pension? If you don't understand the basics of economics don't comment on an economic blog.
Then again the same probably applies to many City Whizz Kids
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never said that I was a "City Whizz Kid" because I can't remember doing any real work
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I graduated in Tricknology 101
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248
The elephant in the banking hall, the endowments, has well and trully been fedand looked after by compensation payments for mis-selling, and by everyone switching over to repayment mortgages which were easier to clear with 14 years of relatively low mortgage interest payments.
We all moved on.
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My Last Two Dollars
What a shame
A lady at the casino
She lost all her money
She said don't feel sorry for me now honey
but if you want I'll do a lady a favour
here's what I want you to do
Just loan me two dollars
Until the next time I'll see you
But these last two dollars
I'm not going to lose
One's going for my bus fare
The other one for the Juke box
To hear me some blues
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ALL THAT FISCAL PRUDENCE
LAVATOY PAPER HAS GONE NOW
BUT NONE WENT TO NO 10
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278
truly
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#275:
My "work it" encompasses adding value by processing basic resources. Obviously exporting machined parts or finished chemicals confers greater economic benefit than selling ore or precursors. I am not overlooking this.
As the movie Primer elegantly defines engineering, "they took from their surroundings what was needed and made of it something more."
You are right, there is not much of that in Britain these days.
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Seeing as the Beeb arent keen to publish it..
RIOT police have been called in to control protesters angry at the fatal shooting of an unarmed man at a suburban train station.
Oscar Grant, 22, was shot dead by police officer Johannes Mehserle, 27, as he lay on his chest on a platform of the Bay Area Rapid Transit (BART) system in Oakland, California on New Year?s Day.
Mobile phone video of Mr Grant?s death was broadcast by local television station KTVU and quickly spread over the internet.
http://uk.youtube.com/watch?v=LShgRlg9Cx4
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After 17 years trading I was driven out of business by high fuel prices and escalating overheads.
At no time was I offered any help by the government agencies.I was threatened with closure if vat and or tax bills were not paid on time .
If this is how hard working people get treated in this country what chance have this country to servive.
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labour are dead and buried now. They are destroying their own core support.
They bring out policies to help and protect home-owners but nothing for tenants. They bring ot an idea to creat internships for graduates but nothing for the young non-graduates who are entering justa s bleak a job market.
Seems to me Labour has washed it's hands of the working class and now just sees them as a source of bulk votes in return for tax credits and benefits. Unfortunately, the working class have woken up to this and even though they won't vote tory, they no longer vote Labour and enough are voting BNP to virtually guarentee they'll have at least one MEP and probably 2 or even 3 come the end of summer and that will be Labour's fault as well.
What a shame for what was such a great and noble party.
Even Obama wants Blair out of his current role because he doesn't think he's up to it.
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Ref: Comment No. 8.
Might want to read the original comments made before assuming commentor is referring to wholesale Nationalisation of Banking Industry.
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At 09:23am on 10 Jan 2009, JeremyP wrote:
'So what, exactly, is your point? '
The point of that particular post was that the Tories do not appear to have any policies other than rehashed thatcherite ones (the ones she was elected on in 1979), the difference being that she had the cushion of north sea oil and public assets to finance economic stimulus in a recession. Mainly giving money and jobs to her bedfellows, leaving the despised working class to rot.
(it was the same working class that lost her her job as education minister in 1974, yes she actually did steal my milk, the 1980s was payback time)
As far as quangos go, one of thatchers manifesto promises was to cut the number of quangos, they mushroomed under her.
I don't like the idea of quangos any more than the next man but what of ofsted, ofcom, ofgem, and any other number of organisations that try (however inefectually) to protect the little man against the huge corporations, should they be elected with the costs and biases and empire building that goes with it ? Should they be abolished ?
I'm sure that some of them do a good job, some of them a bad job and some of them are make work for the privileged few.
I'm poor, 10p tax cut had little/no effect, I'm still poor.
The previous posts had no point, they were only there to show how we got where we are now and what is coming over the hill.
Mixing metaphors again, my previous post mentioned wave of recession, it should have been trough of recession, small wave of optimism, bigger trough of depression and then an almighty great tsunami (big wave)
I have no idea how to mitigate against the forecoming disaster, let alone fix it so that future generations have a better life than me.
I was hoping that the learned posters on this blog might have some truly feasible and workable ideas. (apparently not)
We don't live in a vacuum.
Ideas posted here could very well make up future policy of any government.
200. At 10:26am on 10 Jan 2009, allmyfault wrote:
'inflation is going to get quickly out of control. For example-
problems posting -split into two.......'
That was truly funny, I nearly fell off my chair :), coffee literally came out of my nose.
dark humour at its best. thankyou.
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The elephant in the room is sovereign wealth fund redemptions.
Trillions of dollars of assets under management by soon to be bankrupt resource exporters, many of whom bribe their populations with welfare spending to stave off revolution. The assets are in large part currency reserves and treasury debt accumulated over the last decade, of which they have been the buyers of last resort for some time, but they like to dabble in the corporate too. In good times they had to sterilise capital inflows somehow, now our consumer credit may come back to haunt us in yet another way.
What do you think happens when they get capital calls from the people?
The same thing that happened when hedge funds got margin calls last year. Lots of selling. Closing of any and all profitable positions or just plain retrieving of cash. Except these outfits are so big, the market does not have the depth to conceal a move like that. Since you can only realise paper gains one way, others may be tempted to get their orders in if they sense it happening. That's one way of getting Icelandic interest rates and purchasing power.
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Go, Alexander, go!!!
And run for office!!
If they won't let you do it there, come here.
We'll find a way--it's been done before--remember Ahnuld?
In the meantime, we can all
Sponsor An Executive...
http://tinyurl.com/5qxojd
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"##1 "Labour have been left with NOWHERE to go, they are O.U.T, and you?ll be lucky if they EVER get in again Peston!""
A week is a lolng time in politics. the probability of labour losing the next election is sadly not as certain as you believe, and the probability of them disappearing altogether is sadly even further away from reality. Still, we can but hope.
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don't like the idea of quangos any more than the next man but what of ofsted, ofcom, ofgem, and any other number of organisations that try (however inefectually) to protect the little man against the huge corporations, "
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The quango's such as FSA are paid for by their respective industries, and support them by closing complaints down automatically
Government Ombudsman's and MP's are the (damn) same
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ALEXANDER, sorry that enough shouting for one day, how about you post something positive (obviously not about how we got here or who is responsible, nothing positive there) but something positive as to the best way out of here, we are all blind, have no map or compass and the satnav is on the blink..HELP. (not hinder)
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Dear Peston
You my dear child are but a baby. How old were you in 1981 when there was a real recession going on?
That one was to do with "the people".
This one has been manufactured by the banks and their truly insidious behaviour. Their greed and their sense of power has resulted in the mess which we are now in.
THE BANKS and their staffs who took the risks with out checking the facts are at fault. The Prime Market fiasco - how can the leaders of UK and European banks justify signing the checks for these purchases?
This is at the bottom of it all.
And here we are - the general public - the tax payer - those who supposedly are behind the government - backing up these banking idiots and bailing them out.
These banking shysters etc - knew this would happen. They are not idiots.
So now we are in a planned recession (by the banks themselves). They need this time to regroup and change their marketing strategies. They need time when things are low. to rethink,
Getting rid of the drift wood - lets face it we all knew Woolworth (for example) has been struggling for years. It's a miracle it has survived this long!
We need to change the system - the one that gives the banks the power.
I see glimpses of that change in the UK government buying stakes in failing banks. Reservations in hand may I say.
I would love to hear of any one with a truely revoutionary alternative.
Anyone?
Kind regards
~kate
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#269 - Mrsmiddleeng and # 285 red lenin
Your posts (and my previous ones) are not entirely un-related, different manifestations of the same thing and all valid.
# 269 highlighted the plight of the young and motivated without a degree, #285's post highlighted the plight of what was the 'working class' and is now the long term 'benefits class' in effect, several million strong if you include the incapacity benefit claimants.
The benefits class concerned me in particular because I can see they are the ones who have the fewest options to improve their lot.
Who is there for the working classes / now the benefits class to vote for who gives them something to fight for? It is not the labour party anymore, they placated them with benefits rather than use their energy which was too 'uncomfortable' for them to handle as the new 'labour' party.
The labour party sold their soul to win an election, abandoned grass roots industry in favour of benefits funded by 'service industry' tax receipts.
You can not put a cigarette paper between the underlying philosophies of all the parties now, who do you vote for?
There is no idealism to vote for any more it is simply ' who do we think will be the best leader'.
It has become more like a presidential rather than an ideological election with a choice of Cameron or Brown or, theoretically at least Clegg.
I can see the BNP will pick up something, and it may be significant, unless a tangible alternative comes along.
I would prefer not to wait for that particular wake up call of having a member or more of the BNP in the houses of parliament, quite possible I might add if things do not change.
What the country needs is a different philosophy to vote for not a different face.
We could do a lot worse than the bloggers here trying to do something, we are at least people who do care enough to spend time debating it constructively here, we are not carreer politicians and we are not paid and between us we seem to have some pretty good ideas about what needs to be done.
Just think of it, the country run by real people who have good educations and also led real lives and who really care!
I have even got a name for the party ''Pestons bloggers'' . Kind of catchy yet neutral don't you think?
We have the publicity machine (Robert Peston).
We have the money (Alexander Curzon from what I can make out anyway).
All we need is a manifesto. The time is about right, anybody who came up with something credible and visionary at this stage in the game would wipe the floor with the professional politicians.
What are we waiting for?
Jericoa
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# 271 and 273 toldyouitwould
yes you're right, pirating does carry its risks .. but it still looks like a much better investment so far this millennium than the stock market
in a lot of ways piracy is just like any small business really; one has to have an entrepreneurial spirit, and the taxes are low
thanks for the tip about Predators; we'll scan the skies for missiles but think the US and UK have shipped most of their drones and other fancy military kit out to the Israelis for the January sales (aside from some of the drones on this blog of course)
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Hey come on guys and gals,
Relax... the world goes on spinning.
Remember the best things in life are FREE !
Just chill right down and enjoy the true beauty this world has to offer.
Like every other problem you have had in your lives, a couple of years down the line its just a bittersweet memory.
(BreadHEADS please disregard this post.)
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Leave it to the free market the economic illiterates say. But, it's the free market that got us into this mess! Wasn't it the collapse of the two most unregulated markets in the world, the US housing and the financial markets, that precipitated this crisis. Just look what happened when the US government let Lehman Brothers go to the wall on the basis of free market principles, stock markets across the world went into free-fall. There is of course another reason why governments can't maintain neoliberal orthodoxy. It's because their supporters in the banks and big business are knocking down their door for assistance to help them weather the financial storm currently engulfing them. What will happen when the rest of society, the poor, the unemployed and impoverished home-owners, start to demand the same benevolent treatment? How will government, labour or tory, react then?
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292. At 8:51pm on 10 Jan 2009, BobRocket wrote:
ALEXANDER, sorry that enough shouting for one day, how about you post something positive (obviously not about how we got here or who is responsible, nothing positive there) but something positive as to the best way out of here, we are all blind, have no map or compass and the satnav is on the blink..HELP. (not hinder)"
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every one has the potential within themselves to sort out their own problems
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287 bobrocket
Dear dear dear bob
There are plenty of answers, but I suspect you will not like them. The best trick to try is staying out of Gulag UK, Camp Brown. Summer Dance Festival coming.
As for 'I am poor', wait a bit and with this lot you may well be poorer. Almost certainly.
AC is part of the scenery. He likes CAPs. He does have some personality unlike some that come on and post. He is either a multimillion businessman or a spotty 14 year old boy. Rahere who who claims to have met him is either a 13 year old girl who lives nearby or a senior accountant on the continent. Just enjoy. It is all a matter of perspective. There are a few others with both character and personality and something worth reading, some on line today. You dont have to read.
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# 294. At 9:08pm on 10 Jan 2009, Jericoa wrote:
'All we need is a manifesto'
How about this,
Vote for Me
If I get the deposit back it will all go to the charities of your choice.
If I get elected then all my wages (circa 66000UKP) less what I'm on now (a little above minimum) will go to the charities of my constituents choice.
I will set up an online voting system for the electors in my constituency so they can tell me which way to vote (yes/no/abstain) in all issues before the house.
I will vote that way even if it conflicts with my own ideals (you all have an idea of what they are)
Constituents and bloggers will write and edit my speeches. I will just speak them.
Lobbyists with cash will be encouraged to post their vested interests, again all proceeds to charity
Obviously it will never work.
Popular democracy.
The State would never allow it.
I would be surprised if this even got past the moderators
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I know i shouldnt SHOUT!!
BUT ive spent the last 18 months as if
preparing for WAR (economic).
This week its been the Russian gas
problem to mess things up add in two
more insolvent customers etc etc.
Without sounding negative theres so
little anybody can do up to the election
THIS LOT WILL CLING TO THE BITTER
END AND TAKE US ALL DOWN.
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jericoa.
Manifesto: THE MEDICINE WILL BE SO
SEVERE NO ONE WILL VOTE FOR IT.
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BBC News 24 is the DOOM and GLOOM news station.
Ever 10 mins it mentions recession and bloodshed.
Thank gawd for SKY NEWS ??..
Don?t you think the BBC adding to the doom and gloom ?
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Re Interest Only Mortgages
Theres a lot out there which are aside
from the endowments which failed.
Amongst so many other ticking financial
bombs. . .
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#299. At 9:40pm on 10 Jan 2009, glanafon wrote:
'There are plenty of answers, but I suspect you will not like them. The best trick to try is staying out of Gulag UK, Camp Brown. Summer Dance Festival coming.'
Not an option, I'm here for the duration
'As for 'I am poor', wait a bit and with this lot you may well be poorer. Almost certainly.'
In cash terms maybe, but that is not really a problem for those at the very bottom, I am quite resourceful, I planted and then picked 9 acres of onions by hand one year to make ends meet, I am quite willing to work all the hours god sends if needs be. I can fix most things mechanical, electrical and electronic, I'm surrounded by computers that cost almost nothing from my local tip, if needs be I can rig up a waterwheel to generate enough power to run them. (using a car alternator, they all run from 12v when you open them up)
Being poor is not the problem, being well off and then suddenly finding yourself without a safety net is a major problem.
You say there are plenty of answers, ok what are they, lets suck it and see.
As for AC whether he/she is a MMB or STK makes no difference to me, if there are valid points and ideas to be shared then get it on
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Here are some constructive suggestions.
- All special purpose vehicles are to go back onto balance sheets immediately. Bankrupt? Terribly sorry old chap.
- If a company took or henceforth takes public money to meet capital requirements, employees are to go on the civil service pay scale and forfeit all additional compensation due that year. No perks, no bonuses. The retreats, VIP boxes and jets get sold and funds returned to the taxpayer. If you think you have talent worth retaining, try finding another job that pays a million.
- Make a 6% free capital ratio at all times a regulatory requirement punishable by immediate seizure and sale of the financial institution in question.
- Break up the banks and largest building societies. If you are too big to fail, you have no right to exist as a private entity and threaten everyone else with a systemic risk. Add this to competition legislation.
- Deposit insurance limit to be explicitly capped at £50k. If you do not like it, read the financial reports. The taxpayer will not bail out abdication of due diligence through laziness.
- Credit rating agencies are to be paid by the buyer, not the seller of securities and are to make their reasoning public, or they can take their business to another country. That this transparently obvious conflict of interest has been allowed to persist for so long is inexcusable.
- Ban dark pool trading. If you have something to trade, everyone gets to look inside the box. No exceptions.
- Mortgages are to be maximum 80% loan to value and 350% loan to income, indexed off long bonds, anything else henceforth to be forbidden.
- Negative equity to be discharged in repossession.
- Enforce the above. Unlike, you know, all the existing financial services legislation.
- Enforce existing laws regarding financial matters with respect to the lunacy that has just taken place. Some people got swindled, but more significantly, EVERYONE knows someone who has been. Without justice being done, confidence will never be restored.
I could go on for PAGES, but performed in the right sequence, this would be a start.
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#302 is that a no then?
Got to be worth a shot for the ride at least.
Where is your spirit of adventure Alex or are you really a spotty 14 year old?
Jericoa
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Russian gas, Mid-East oil, Polish coal, whereever uranium comes from for Nuke power stations.
We are always going to be held hostage to the whims of johnny foreigner (and our economy too) until we either
a. reduce our energy consumption to the levels that windmills generate (don't make me laugh)
b. find some other way of generating sufficient energy to meet our needs.
If b. means digging up all the dirty coal and burning it then so be it, we are screwed with it (global warming) or screwed without it (economic hostage)
At least using the coal spreads the misery around to the hostage takers as well.
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#302 alexandercurzon wrote: "THE MEDICINE WILL BE SO SEVERE NO ONE WILL VOTE FOR IT."
I agree, the medicine is chemo. But then, the illness is cancer.
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Well this one dedicated to all the peace makers in the world
man woman boys and girls do it
but I tell you about the sound that plays around my way
iron woman is the prime minister of england (vote for me)
just the other day she go to falkland
she go to falkland just to see the land
she sight falkland and fret them them a fret
they use the exocet
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This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
bobrocket
Alexander is a guys name and i was last
time i used the loo.
And i use my own name.
Theres plenty to do but GORDY ETC
have to leave office first. .
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# 306. At 10:12pm on 10 Jan 2009, WerringtonSilent wrote:
cheers
lots of interesting, forward looking stuff.
The future starts here.
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bobrocket
What is STK excuse my ignorance i got
MMB.
Although some people call me a B or
a dinosaur or a Posh T%%%.
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Ac it's not just THIS LOT that will take us down, the OTHER LOT are also bereft of any sound ideas for securing our future.
I felt very sad last year when watching US programmes on the credit crunch to hear american workers saying "we'll just have to work harder to get out of this mess - it's the american way!". They had no idea that no matter how hard they worked (or wanted to work as jobs disappeared) they were not going to get out of this mess the american way.
Closer to home, the big story for the First Quarter will be corporate debt. A very large majority of European corporate debt falls due now. Just watch as they find nowhere to re-finance. For the UK this will accelerate the number of subsidiaries that close with full order books as parent companies ship the jobs back home. (strange isn't it that Euro and US multinationals fall back on their home markets in times of stress whereas UK multinationals have no compunction in closing UK subsidiaries!).
The pace of this disaster will increase incrementally. So far it's been a little like a phoney war - all sirens and few bombs. However, in the next 3 months, many will wish that they had dug the shelter before the air raids had started.
A bit OTT all these war refernces? I think not. But you can come back and laugh at me if it doesn't come true.
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Jerecoa
I can tell you i am no longer 14 only
3 years off 50.
Regarding Politics I am up for it.
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268.,
"Tourism does not create wealth, it only attracts discretionary spending from someone who has created it"
Eh? Try telling that to the owners of the London Dungeons etc.
"Tourism is right behind banking in something on which Britain cannot rely for wealth"
These are two industries where we have competitive advantage of sorts and which repatriate some of our exported pounds. Chuck them out for some pseudo Victorian manufacturing and mining industry and it's back to the poor houses. I'm all in favour of a balanced economy, but banking and tourism - for us - have to be an important part, however distasteful for some on this blog.
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glanafon wrote
'He is either a multimillion businessman or a spotty 14 year old boy.'
Multi Millionaire Businessman or Spotty Teenage Kid.
as to your name implying your gender, names are not what they used to be :)
Ok. so after Gordo and his chums have left the building, what do you think we should do ?
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Please correct me if I am wrong, but the basis for us getting out of this hole by 2015 and our debt being 'only' £1 trillion is that the recession ends Q2 2009. Am I right?
So why are we panicking? Only 5 more months of turmoil to go. By the time you have a suntan, we will be blazing a trail: growth, jobs, output etc.
Or is it that I am right and the predictions were from a little known place called Cuckoo Land? If so, and the recession lasts beyond Q2, how big does the debt get quarter on quarter and how many more tax hikes will it take to rescue it?
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Hmm Bob
In the event of the conventional failing you have to resort one of two ways. Go primitive which you are apparently already doing. Or seek a new unconventional activity, by general UK standards.
By the way Gulag UK is not for all. Those who stay in employment or self employment will not be in it they will be paying for it. High taxes, means testing, reduced services. Like it or not there still is plenty of money in this country and people will not stop spending. Those with money are traditional types, careful with money. Not flash. Consider before they act. Save before spend. Sometimes months.
The first thing is that there has to be trade. for this you have to be providing something people value and you have to respect your customer. You have to be interested in money not barter. You have to provide something not easily supplied from the low labour cost countires. That means not mass production. No clone products.
Key issues as far as we are concerned are - individuality, ethics, environment, niche, flexibility of production durability, long term desirability. Low overheads, at this end we use internet sales and market world wide. We are considering our first advert overseas. We are not terribly keen because it is a conventional thing to do but it may got ahead as a precautionary measure. If it does it will just be a logo placement. The most effective thing is marketing by forums and online community groups. It is not our sector but I know of one internet company which sell old games digitally online. They got picked up by a forum and were passed around from forum to forum. They had 1 million hits in a week. That is not our sector but I mention it as a demonstration of the power of the internet. We manufacture lifestyle 3D items. Our ethics policy is strong. Our financial transactions are handled by a major bank and they have to vet before you go online. They had never even considered some of the things we cover. Our specification is to be good enough to hang in the V and A in one hundred years time. We are not bothered whether that happens or not it is a commitment to excellence. We use trad and state of the art techniques and equipment and trad materials and state of the art materials. We have a underlying matrix of product configurations which produces nonrepeating combinations and in discussion with a customer produce what they want to reflect their individuality. We have a few products on the digital shelf to give a price guide. From impulse price upwards. We never divulge a customers specification or price paid. Although there is a vauge price band expectation with the customer they are not really interested. they want something unique. To the extent that if we have something to hand they still want the same thing made specifically for them, not the one to hand. We have customers who have advised they have specifically written our products into their wills for the next generation. If you want to be on line you have to have a website and they are relatively expensive if you want financial processing. But just a message board would do to start. Consumers are fed up with consumerism. However you have to minimise overheads and keep prices under control. To distribute the old school way is too costly. I am happy to give the concept out but I will not provide the web address. 1 in 2 surfers who visit our site mark us up as favourites, which is a unheard of conversion. People email and say they browse for up to an hour at a time, again most unusual. That is our solution. You have to seek your own. We previously had conventional roles, they failed. We never overcharge.
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#144
The TSC may be toothless wonders, but that's not what the constant trials of strength down the centuries has been about - it's about raw power, who actually runs the country. Given the recent track record of the sector and the quite spectacular fine Lloyds just suffered for what amounts to money-laundering on a scale wortht of BCCI (and recalling their current market share), it's going to be unacceptable for quite a number of politically influential; players to see the UK continue in the governance of the Banks.
Given that the subject involves most of the middle-east, it's inconceivable that some member of the ibn Laden clan should not be involved somewhere.
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#284 Jericoa
You have hit the nail on the head and many contributors to this blog would do well to heed your warning. Much discussion takes place here on the performance and policy of GB/AD versus DC/GO whilst almost quietly in the background the BNP is reaching out to a generation that will be voting at the next election for the first time (if someone can give them a reason to). The major parties have lost sight of this generation and are leaving then out in the wilderness. In our last local elections we received a single bland election pamphlet from each of the major parties regurgitating the same central party nothingness with a little local spin and not a single knock on the door. From the BNP we received 4 hard hitting, to the point and, to this forgotten generation, appealing leaflets. I listen to my daughter and her mates (more of us should) and what the BNP says to them has a resonance in a world they often feel has nothing to offer them and in which they see no future.
Too often contributors class then as workshy and belonging to an underclass. They are not. What they want is hope, a decent job and someone to give them a chance.
I would love to say I have the brains and qualities to help you with your manifesto but fear I would be found wanting. But I do know that we have a real and present danger of social unrest brewing unless we as a society put right the wrongs that are meeted out on the youth of today. We have to stop ostracising them and reach out and bring them in from the cold.
Brighter folk than me must have the solution and I pray for a strong political figure to emerge who is truely visionary.
They will have my vote.
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I cant speak for others but I am not interested in carrying 60 million passengers. It is about time some started paddling their own canoe, or if the havent got one get making one. Too many passengers been lounging about I think. Rude awakening due.
We all know AC isnt 14.
For myself I have to go and tally the days trade, or go n do my Eng Lit homework for tomorra to avoid detention, vexs me sumat propa. Whichever you want.
Werrington silent. Ouch. Your a bit mad with them all arnt you.
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316 foredeckdave
What matters is where you are when the financial bombs drop and if you end up with PTSD if you are in the area but still standing. Nobody will be laughing at you whatever. I am afraid some of the mickey mouse jobs and qualifications will not mean much shortly. There are going to be a lot of people feeling cheated. At the risk of making you groan, some of the economy will remain sound, or robust, or trading, whatever you want to call it. By definition if you are posting on here you are unusual. Unusual people tend to do well. I certainly would not write you off and i dont know you.
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#306 werringtonsilent
Making a pitch for shadow chancellor of the Pestons Bloggers party I see (#294).
I suspect there may be some competition however from others on this site but you have set the bar high to get us going.
All Pestons Blogger party manifesto contributions welcome, we will have to open a new site for it though (anyone know how / willing to do that?)
Good show actually werringtonsilent to come up with that chemotherapy treatment as spontaneously as you did is impressive and I pretty much agreed with everything I understood of it anyway (most of it) .
We are on our way,we still need Alexander Curzons financial backing though, he seemed a bit reluctant (#302) so we may need help to pursuade him.
I am not kidding you know, how do you think these things start?
C'mon guys and galls stop typing and start making a difference in the world.
Jericoa
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#317 and #323
Thanks for your support ( the original contribution is #294 by the way not #284).
Lets keep this thing going (#326).
Jericoa.
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#318:
I would happily explain to anyone the difference between wealth creation and transfer of existing wealth, as I already have here.
For example the owners of London tourist attractions get a lot of foreign people who once mined nickel at a profit. Now they cannot do so. It was nice getting a slice of the profits without mining and smelting, just by performing an unrelated discretionary service, now they will not. If they were primary producers instead of leisure services, maybe they could do something about it. They cannot. They are in wealth transfer, not creation. Subsidising attempts to win back that custom is futile.
I am all for a balanced economy, it is not as though I suggested turning tourists away at the borders. But we cannot all earn a living performing services for each other. Production and trading of goods, and adding value to goods has to be at the foundation. When it comes to spending priorities, tourism may find itself near the bottom of the list. The world is broke. Tourism has chronic overcapacity like everything else. After the few fits and starts we are seeing as a result of the mayhem in forex, people are going to be taking holidays closer to home the world over. For the entire length of the next decade as a minimum. That is because this is a depression.
Any source of foreign exchange is welcome BUT we have to resume assessing the cost of obtaining it versus the benefit. Government (taxpayer) support for tourism may not be an economically viable proposition for some time.
People have to get used to the fact that their pet sector will have to pay its way in a cost-conscious world and the outcome of some future strategic cost-benefit exercise may not be favourable. This really was the point of that post.
Dubai had a go betting against those fundamentals and now needs recapitalisation.
In my own small way I hope to make the breaking of the bad news that little bit less unexpected.
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glanafon. Thank you for that encouraging thought. I've been described as many things but never before as unusual. If the consequences of being such are as you suggest then i will go to bed feeling very comforted.
You are right that, whilst there will be economic slaughter this year, it will not be uniform. The economic activity of the country will not stop completely - somebody has to produce and distribute the soup for the kitchens! It will be interesting to see which of the sectors remain profitable. I think that there will be some surprises.
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I wish alexandercurzon (numerous posts) was fake but I think he may be one of those insolvency guys
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325 glanafon....
Can i ask you which parts of the economy you think will remain sound?
I myself cant see any part of the economy remaining sound over the next year, whether its hi-tech, financal, building,retail, Industry,even food retailers will have to let people go.
At this moment in time the economy is being run at its worse in its intier history. reason being buisness is runing, people are being paid and yet most if not all are not producing what they where. lets take the banks there job is to not only take money in , but to lend out. As we all know there not lending and even though some jobs have already gone there are still thousand being paid and yet not producing. its abit like someone being paid to decorate half a room but getting paid for doing the full room. this is happen more or less across the board.This is just greating more debt.
If robert thinks the figures that have just come out are bad then wait a few months
and they will be astronomical. On the 1st of jan 2009 100,000 job went with a click of a finger. Most of you will be thinking why have,nt we heard about this on the news. Well i will tell you why a person i know works as bricklayer but not on a site but on private houses. he does block paveing and brickwalls, brick bases for conseratories etc.
anyway to cut along story short he phoned 6 other people who work in the same line of work and all where in the same boat. no work but more worrying no phone calls for weeks asking to price work either. you see the man with the 500,000 house is soon going to have a house worth far less than that. And this as happened right across the country. He does not see getting any work at all for 2009. these are proud people and have never signed on the dotted line. and they wont be rushing to niether, but in a few weeks or months they will have no choice.
A major restructuring of our economy needs to happen. And lower wages, i know lots are not going to like that bit. we need to open the coalmines on a sort term basis until we can get more green power. And we most certainly need to start to build, and manufacturer things. and as for the current housing situation many will end either lossing there home our having a large amount of negtive equity in there property.These people should have there houses put back into the social sector, pay rent 50% to the bank until the mortgage is paid and 50% to the social housing. And finally eat less ,
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Bloggers Manifesto...
There has been much worthwhile content flow through these pages from Alexander C and others. I offered to collate it all over the next few weeks now one project I've been involved in has come to an end for another year.
I'd love to go the politics route too-already suggested Alexander C for Chancellor, and he said yes please!
This great man is purely a successful business man-nothing more sinister than that!
There is also the Rebuild Britain 2010-started a few weeks ago by bloggers keen to lobby politicians to take more appropriate action.
And don't forget to sign the petition for Gordy to resign on No 10 website
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inflation is going to get quickly out of control. For example-
problems posting -split into two.......'
+
we had a (real) problem like that (multiple clients in jersey and london) in a (dodgy) trade
we asked the (business) users to recreate it in (test) but they couldn't (too busy)
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(In the real world)
People with any knowledge and ability to crack this sort of stuff are paid by employers to do what they are told. If they also look into solving world economical issues on the sly they will have to bump up the hours on their time sheets and are probably breaking the terms of employment.
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Re Downing St Petition
I did do it but checked again a few days
go it seemed to have been REMOVED.
GORDYDEMOCRACY??????????????
Kiki I am not a insolvency practitioner.
THE DO NOTHING PARTY SEEM TO BE
A SPENT FORCE??
SO YES LETS START A NEW
MOVEMENT.
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RE HOUSING COSTS
THE HOUSING BOOM IS THE MOST SIGNIFICANT FACTOR MAKING UK PLC
UNCOMPETITIVE.
UNLESS YOU ARE A SENIOR BANKER
LIVING IN SURREY OR SIMILAR STILL
TAKING YOUR BONUS,OR A BIG TIME
ENTERTAINER WITH THE BBC. . .
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RE CORPORATE DEBT
YES 2009 WILL BE THE YEAR OF
RECKONING.
AT LEAST 1 mllion more on the DOLE
SO THAT WILL BE OVER 7 MILLION ON
OUT OF WORK BENEFITS.
PLENTY FOR GORDY TO PIOUSLY
MICROMANAGE?
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RE THE BNP
2009/2010
THESE WILL BE THE YEARS THE BNP
COME TO THE FORE AS OUR
NULABOUR
UNDERCLASS EXPANDS AND BOILS
OVER WITH FRUSTRATION.
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RE HOUSING SHORTAGES
A SOCIAL LANDLORD I KNOW HAS
OVER 230 EMPTY NEW PROPERTIES
ALL OF WHICH HAVE BEEN EMPTY FOR
12 MONTHS OR MORE.
YET 1,700.000 PLUS ON HOUSING
WAITING LISTS.
THERE ARE STILL OVER 700,000
EMPTY HOUSES IN THIS COUNTRY
THERE WERE SIMILAR 12 YEARS
AGO.
NEW LABOUR NEVER WORKED
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FARMING OUTPUT
MILK FROM THE EU
CHICKEN FROM THE FAR EAST
PIG MEAT FROM ANYWHERE
ETC ETC
ARE WE MAD???
BANKRUPT FARMERS IN THE UK
SUICIDES EVERY WEEK. ....
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Glanafon
Sut mae, sud'wch chi?
If you want to know about people who use their own names here, do some googling.
AC is a fairly senior director of a well-known retail business and runs his own consultancy west of London. He is a football supporter and has done quite well since I met him in his very junior days - I suspect that your terminology "multimillion" is somewhat insulting, as he's now past the first billion. Unless he's a 15-year-old genius who may soon be making his first billion.
He will have to remain guessing who Rahere is, as Rahere isn't into playing personality games, what you know of me is only relevant in support of my theses.
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Kiki, just keep watching the Israeli situation. My more apocalyptic submissions predated the latest activities from the area, the Israeli high-security prison (for Hamas inmates, can someone check?) on H'ar Meggido may yet be relevant.
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Why would somebody want to be a billionare. I personally couldnt cope with the guilt
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houseallwayswins post 343
Guilt ???????????????????????
18 hour day 6/7 days a week
last holiday 1986
RISK
EFFORT
LITTLE SLEEP
STALKING
HATRED / JEALOUSLY
Need i go ON???
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All this partisanship is a waste of time.
We?re stuck between a power-hungry obsessive, who deludes himself that he knows best, while lacking courage and empathy, and a callow car salesman, with a good line in patter, but no substance, who persists in surrounding himself with people who simply don?t live like the rest of us.
Neither of these parties can get us out of this mess. Even Barack Obama in his Superman cape and pants will not be able to do it.
Why?
Because recovery is not something that can be achieved by governments. Any more than they can shorten winters, prevent night following day, eliminate poverty, banish the common cold, or stop the ageing process. What we are experiencing now is simply part of the cycle of life and it will change for no rational reason, but because millions of us will eventually make tiny individual decisions to go back to getting on with our lives - like the spring shoots that will poke up from the ground in a few weeks time.
A recent article by Martin Wolf in the FT showcased research by two economists called Rogoff and Reinhart. This duo have compared every major recession going back 150 years, in countries as disparate as Thailand and Sweden. The average length of these slumps, the depth, the losses of growth and jobs, the rises in gvt debt were pretty much the same in every one. We?re in for four to five years of this come what may.
But although governments may not be able to get us OUT of recession, they certainly can make it worse, largely by the things they do to try to help. That is what we have to fear, particularly with an election only months away. All this slashing of interest rates and printing of money is a desperate and highly dangerous attempt by Flash to persuade us to love him and vote for him. We need this election out the way so he can actually get back to doing what he ought to be doing ? ie as little as possible other than using the slack to repair the infrastructure.
So here?s the plan.
We all tell any opinion pollster who calls that we love Gordon. He?s doing all the right things. Make sure Labour surges ahead. Because then he will call an election in the autumn.
On balance, if I can bring myself to vote, I will probably cast my ballot for Flash, because once he has the power he wants, he probably will take the tough decisions. He did after 1997. The other boy will have too much to prove.
But for Gods sake let?s get this out the way and let?s also grow up and realise that government cannot solve our problems and that we need far less of it ? not more. Sadly there is no candidate who represents that view.
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Robert,
I wanted to know if you could discover to what extent the actual collapse of Lehman brothers is actually written into most of the banking insurance and terms and conditions in the rest of the banks operations?
I heard that the banks can invoke a clause because of the collapse of a major world wide bank and therefore reduce interest payments on bonds and withdraw all guarantees of safety on deposits. In effect they could say that all "guaranteed bonds" could no longer expect to get their initial capital back.
If this is true how will this be caught, if at all, by the governments current guarantees?
Are we unmasking the banking Ponzi scheme?
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re: 323 Mrs Middleng
'Too often contributors class then as workshy and belonging to an underclass. They are not. What they want is hope, a decent job and someone to give them a chance.'
What they actually want is a load of money to keep buying recreational drugs, designer clobber,games consoles, tickets for gigs/festivals, I-phones and state of the art MP3 players.
The money for these things has always been available from the bottomless pit known as The Bank of Mum and Dad. Unfortunately in the real world there are things called 'bills' and 'Rent' which actually have to be paid.
I agree its a harsh slap in the face for most school leavers with minimal qualifications when it dawns on them that there aren't any jobs paying 30 grand a year to unskilled labourers. That wasn't a facetious remark either, the unrest that undoubtedly exists amongst the 17-mid twenties working classes in this country is pretty much based on their hopelessly unrealistic expectation of what lies ahead after school. This could be called the 'Hollyoaks' syndrome - mysteriously all of the characters in that programme have good jobs, flash cars and nicely appointed homes despite none of them ever having gone to university or having been shown to be particularly talented at anything other than 'looking good'.
In previous years this cruel reality was mitigated by the abundant availability of fairly cheap credit, now that has dried up I can see why 'young people' rail at the injustice of a world that denies them the chance to rack up the unsustainable debts of their older brothers and sisters...
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331 lionsomebody
Dont run away with the idea that I an an expert I am not. I just keep an eye on things and report what I see. I only post because I can offer another point of view sometimes. As I have said before. Pass me by if you dont like it. You have to make your own mind up. Howvever whilst a storm may be on the storm can still be your friend. It wont be if you panic. If you dont panic the storm can still be your enemy but that is out of your hands.
You have to look at what is failing as well as what is holding its own. It is easier to describe failure mechanisms and surviving customer bases than to say this sector will fall by x percent and this sector will survive by y percent. I dont have access to that sort of data. I dont know I would trust it anyway.
If you look around there has been a lot, and I mean a lot, of money spent due to the housing boom. Leakage sideways into other usually aspirational purchases.
Everybody seems to expect a granite worktop now, unheard of 5 years ago, kitchen refits, big cars suddenly everywhere, double glazing outfits springing up. Building work left right and centre. People buying swank roller shutters for the garage, not measuring up properly, dumping on ebay brand new in wrapper at 25% of cost. Carelessness come across as a characteristic. The careless get culled by the predator or themselves.
Because there was the new business a whole new raft of suppliers. That will in part go or has gone or is failing. Chronic oversupply. What is worse is that group of customers, the ones that needed a flash car or new kitchen to impress the neighbours have been left with a debt problem. So not only does a supplier in that sector have a drop in trade as a result of the bubble popping and removing an inflow of business they also have the double hit of their aspirational customers being culled, effectively permanently. That is why the collapse is so sharp, but it remains local.
That is why is this hitting some sectors so hard. Their busnesses have been boosted by artifically wealthy customers who have no long term sustainability and actually do not have any wealth. Any business needs repeat trade from its core supporting group of customers, even if not from the same individual customer. That is why car makers are going to be in trouble, although cheaper cars seem to be doing well in parts. The local car dealership, quite a big one had one slowish month and then was busier than ever. Selling new sub 10k cars. Has taken on another marque. This dip for a short period seems to be common. Local curry house. Very good. Dip for a month or so. Worried. Business as usual now.
Another problem is the development of more sophisticated products with a greater functional life and durability. Again cars are a good example. Despite the positive comment above. They have got better and better and there is no imperative to replace other than for fashion reasons or fuel economy. Things get tough you live with the current model. Similar problems with replacement double glazing. 25 year life. If you sell once thats it and sooner or later your market shrinks.
On the public sector side somethings will come under pressure but equally well it is difficult to see an electorate being happy with the NHS shrinking, although it is possible there is means testing to come. So there will be some stuff not cut due to public resistance. It looks like more means testing. It has already been floated that social housing rents should not be fixed, but be means tested.
The public will downside its expenditure, an example is a bakery firm is expanding (reported). Probably because office workers are buying a bun or pasty rather than going to a more expensive cafe. So one mans loss is another mans gain. No use to me somebody will say. Well that may well be the case but that is what is going on. Other businesses are expanding in a small way, usually niche, not mainstream.
You can see I think there is a message developing. Big businesses give bigger wages and usually have high debt. Small businesses pay less and usually cannot access big debt so they are more likely to prosper. It may sound all a bit homespun but that is the mechanism.
Locally, here it is a rural environment, a lot of business seem to just go on. Building extensions are going on everywhere, because there was a shortage of builders previously. I asked how a local outfit was going because his son went to school with my son, both off at uni now, and they met up over the break. Doing his tax return, fully booked this year, off down under for hols.
So it is the small guys not exposed to the bubble market who are doing well. You can say doesnt help me, doesnt appeal but it remains a viable economy.
There will be a rather odd thing of superficially smart neighbourhoods with chronic debt, a high incidence of negative equity, and next to no disposable income. A new Ghetto. They were here in the early nineties. Bradley Stoke a new dev at the time near Bristol was known as Sadly Broke. They will exist alongside the traditional downbeat area with a history of a high incidence of unemployment.
The people with money, who keep spending in this mess, are the trad old school types. Conservative, with with a small c, save before spend. Do not impulse buy, do not often use credit. Very slow flywheel to get going, but also a very slow flywheel to slow.
Largely scorned in the bubble times and they know it. They are of all ages and all socio economic groups, althought they do tend to be older and professional., they do occassionally include some types that would be referred to as hippies sarcastically.
You would be surprised how much money some have. As a group they are not driven by consumerism and do not like to buy something that does not last. So if you want to know what will do well look at them.
Elsewhere I personally cannot see the good old mobile phone and other communication and leisure tools eg internet etc going down.
Banking. Will probably revert to the type of a few years ago. Some never left it. It was the NRs and B and Bs that got in trouble.
So it is up to you to have a good look around. But however big employment gets it is not going to get that big it self corrects, and there will still be money in the system. Where there is money there is a potential business, the trick is to provide something that somebody is prepared to weaken their financial position to get, because that is what you are asking them to do.
As an aside. I bumped into somebody, the wife of somebody who has a business. She happened to mention he rented teepees. Oh I said, can I rent one we may have visitors this summer. Laughter, everybody wants to sleep in a teepee. Hmm. Interesting - if everybody wants to do something then some do. More laughter. No way I can rent. Fully booked. What about next year. Sorry fully booked forward as long as the booking mechanism allows. Who rents. Festivals and summer camps. Goes off and errects, big stuff, needs 3 riggers, gets them in to order. You make a three pole frame, shin up and pull up the cover. Return later as week or so, dismantle, check and repair, on to the next. Sell duff and worn stuff at the end of season to a waiting list. Can I buy an end of season sale one. No. A full waiting list. He then makes more over winter as required. So I go on line. Hes not listed doesnt need it. But there are people making yurts and teepees and importing them. Probably oversupply by now, its about getting in first. But the message is supplying something people want. The idea that 60 million people will completely stop spending is a bit flawed. And that is just in this country. 500 million in the EU in total. Approaching 300million in the US. Still a wealthy country. How many customers do you want I dont want anything like that number.
A word of caution do not under any circumstance set a business up - under any circumstance whatsoever - unless you have evidence of transactions. Cash in your hand for a product or service supplied. Not messages or marketing saying people will buy. You are better taking a hefty loss on prototypes and proving a market exists than listening to the bull and ego that comes in from marketing.
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341 rahere
I would quite like to be 14, even with spots, the spots go. No I prefer AC shouts. Shouting implies energy which he has in abundence. Something somewhat missing in most of the population. If you stripped everything, every asset, away from AC he would be out the next day busy trying to get it together, not sitting on his butt. I am sure that if you turned around to AC and said something he would listen despite the shouting, a characteristic not always present amongst quieter individuals.
He'll never get elected though. My own perference is to use a double headed axe to deal with some of these problems but I was born a 1000 years to late. So I have to behave. I just get on getting on and enjoying it.
Keep posting fella.
As for footie, what ever happened to goal scoring.
: )
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344 Alexandercurzon
18 hours a day
Stalking
Give up the stalking and you'll have more time.
lol
No I am sure you dont do that. We had a small dose of it. Difficult.
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#347 CityGambler
And how do you know what they want - have you ever sat down with a group of 17 to mid20's and discussed their aspirations? I do on a regular basis.
My daughter and many of her friends survive on roughly 100 - 120 pounds per week. She pays her rent & bills, feeds herself (everything is Smart price), does not buy designer clobber (everything is Primark) and certainly does not own the latest console or an I-phone and rarely has the money to go out.
But it is not the lack of money that they complain about it is the lack of opportunity to prove themselves. They have tremendous energy, enthusiasm and ideas but no one wants to listen or harness it. They don't think anything less than 30K is beneath them and they are certainly not interested in consumerism by debt.
Your comments are exactly what makes we despair - stereotypical based I suspect on limited interaction with this forgotten group.
Have you ever had to deal with Connexions or Job Centre Plus? Their support for the young is pitiful.
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#335 alexander curzon and #332 tigerjay
Re 'bloggers manifesto'
ok alexander, time for you to stop shouting and re-direct that energy to show us what you can do in the real world.
Dispell for us that lingering suspicion that you are actually a truanting 15 year old whos dad works in the city.
I take tigerjays point that bloggers have already set up something (re-build Britain 2010 website you refer to) which I was not aware of which is hardly a good advert for it!
Enter stage left Alexander Curzon. To make it easy I will start it by suggesting how it should be done, the rest is down to you.
For a man of your claimed stature this should be a cake walk, a '1 phone call' problem' to the right person.
1) Set up a not for profit website (BBC may object otherwise) and promote it regularly here via regular bloggers.
2) Give it a catchy sound bite domain name. 'Rebuild Brirtain 2010' may be accurate but it sends me to sleep as a name frankly and does not make me want to look it up. I still like 'Pestons Bloggers, it is also accurate and may get us some free bigger publicity at some stage also as robert is quite a high profile chap, particularly if something sensible starts to emerge on the site worthy of numerous hits and his direct inspection.
3) The site will need to be managed and not be tacky i.e. someone will have to properly design it and look after it.
4) The site should not be affiliated to any existing political party what so ever. Manifesto submisions should be in a set format and be under the headings ' radical' 'Moderate' and 'status quo' depending on the authors own view.
5) They should also be under set headings depending on what aspect they want to talk about, titles such as ' Economy' , 'defense' or 'education' etc.
6) There are bound to be some idiots out there who want to spoil it (I dont count out cyber attacks from labour HQ) so there will have to be a moderation aspect to it also.
7) There can be seperate chat rooms, we can even have a special unmoderated 'Gordon Brown shouting room' for Alex so he can get it all off his chest and others on similar lines. This may be worth doing for that chat room alone in fact!!
It sounds like fun and worthwhile to me.
Are you going to make that call Alex and prove to us you are not a 15 year old whos dad works in the city? Are you prepared to put your resources where your mouth is?
I think a reasonable time scale for someone like yourself would be 1 week to set it up. Just let us know when it is done and I for one will back you all the way.
If not you could be accused of being a charlaton y'know, a bit like that chap Gordon Brown you so love to talk about.
Over to you Alex
Jericoa.
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glanfon 349
Axe is messy,the French have a better
device.
I am NOT PC enough to be an MP?
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351 mrsmideng
It is the destruction of prospect which is disenfranchising the young and has been at play for some time. The whole situation is like something out of Kafka. As for the system it is entirely put in place to police not assist. It is essentially dehumanising. I proposed that a self help group should be funded to provide balance, an independent voice to the government agency, because the CSA the only place they can turn is not up to it. It is a specialised area with complex law. Not interested, what a surprise. Funny but asylum seekers and refugees get independently funded support groups from HMG funds, to allow them to challenge the establish rulings. Not our young. Part of the problem is the schools. there objective historically has been preparing for further academic activity come what may. That is the index they quote all the time. You have to fight the brainwashing all the way in order to get your kids to see the landscape not the pretty projection.
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347
You are as arrogant as you are foolish. 30K pa is a fortune to the vast majority of the population. My manager, in her 30's, a graduate, in charge of 120 people across the UK in 6 locations, who worked her way up to that position is only on 26K. Mind, she does have a company Astra van.
It is corporatism that is stifling people. The corporate image, the corporate line, the corporate method. It crushes individuality and imagination in a ruthless persuit of 'the standard' and 'sameness'.
Corporatism is one step away from fascism.
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Jericoa and all other doubters.
I can assure you that Alexander Curzon is a real man and he is what he says he is. He is well-known amongst the well heeled around Richmond/Twickenham and I met him only very briefly as I was with someone who knew him, I think either in the Exiles Club bar in Richmond or a little italian restaurant on the approach to the bridge.
But wherever and whatever. He is a real person and he is a very succesful buisness man
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352 jericoa
You are making the mistake of thinking an economic problem can be sorted by political action. The economic problem was caused by a political problem but it cannot be solved by the same. It has to be left to work itself out. Interferring in processes which is what caused this problem is difficult. Smoothing of the transition is actually being put in place if not always most effectively.
It is almost certainly irrelevent who is in charge. Taxation runs at 46 pence in the pound to service the public sector. That is not going to change there is little room to move in policy. In fact public services have to be squeezed sooner or later there is no way around it. Personally I want Brown out. I do not endorse the employment of people I view as criminally negligent. Employment is a reward. According to the bookies Brown is odds on to hang on to the bitter end and odds on to lose.
Anyway I am off to do something productive.
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I firmly believe that the disillusionment of the people of this country with labour, conservative and liberal parties is so bad that a new party is needed which actively addresses their concerns.
The BBC state their blogs are regularly read by the politicians. Evidence of this is in how ideas floated here are 'cherry picked' by various parties. This further suggests that said politicians look for ideas on here which are vote winners, rather than what's best for our country.
The economic crisis may be global, but each country is unique. A 'one size fits all' recovery plan is no good as each country needs to steady it's own economic ship first before a global 'fix' is achieved.
We have many economic issues to address in the UK, but of equal importance there are urgent social issues too. The 'work shy, have a baby or 2 to live on benefits' and 'have it now, pay later' are but a couple.
It would be brilliant to start a political party that cared about the country not votes. I think the votes would come as a result anyway.
I'd much rather get up and do than sit back, prevaricate and woffle around. Actions really do speak louder than words.
A lone voice in the wilderness wouldn't be alone very long!
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jericoa
500 k is on the table has been for
6/7 weeks as a STARTER.
Internally weve been looking at a web
set up.
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Not PC enough Alexander?
I think the nation is in such a state that being PC is one of the many standards which will slip in the coming months anyway!
As things worsen, many luxury things are stripped away in the struggle for survival. This includes certain attitudes and behaviours which veneer our society!
When people need food, clothes and a roof for themselves and their children, I suspect your direct, non PC approach will be seen in otherws more and more, and be more appreciated.
The luxury of pussy footing around is gone.
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353 ac
No not that you are probably not patient enough. You never know though. You do make some comments for effect when you know the answer is not available. Eg too many immigrants when we cannot stop them if they are from the EU. You would get slaughtered in politics with that sort of thing. Not my cup of tea I'm afraid. I would just get heckled all the time. Nobody likes bad news, shoot the messenger, bad news goes away. If you want to join the mad house good luck. Hilary Clinton lost 400m in her campaign. Most her own money, or at least her own liability I believe. Could be wrong. I know it is the States but what goes on there goes on here sooner or later.
Must go. Its a mistake to tab back.
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Re: 351 Mrs Middleng
I work in an office that employs 950 people, of those only 250 are permanent, full-time employees. The other 700 are on fixed term or temporary contracts recruited through the likes of Adecco and Office Angels. The vast majority of those agency staff are in the age range 19-25 and I 'interact' with them on a daily basis. My observations are as follows:
The concept of punctuality is an alien term to many of these people, turning up late not only for work, but staff meetings and fiddling worksheet times is regarded as par for the course.
Sick absence is a staggering 60 percent higher amongst 'Agency' staff..this despite the fact that they do not get paid for days off due to sick leave. So I can agree with your comment that perhaps money is not the defining cause of their unrest
e-mail and internet 'abuse' (as it is rather pompously described) is rife among agency staff
To be fair many of them have an encyclopaedic knowledge of video games and obscure indie bands and films. They can recite the entire routines of stand up comedians like Ross Noble and Frankie Boyle and tel you the whole plots of one run drama series on BBC 7. Unfortunately none of this knowledge translates itself into anything useful in the workplace, most office work being exceptionally mundane and repetitive (ours is no exception) all that is required is to turn up, shuffle your paper around for 7 hours 24 minutes and go home. Sadly, that seems to be too much to handle for many of the people we employ...
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Margaret thatcher never realised whatb she was doing heading for a free economy .was that not what we had in the days of Bleak House
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I am normally very dismissive of the anti-Peston "its all the media's fault for talking it down" brigade, but had my patience really tested last week.
I was watching the lunchtime BBC politics show ('Daily Politics'?) where the portly presenter suddenly reached for his beeping blackberry, not going off autocue, or from the producers instructions into his earpiece to read a message from Robert Peston.
The message was that Marks and Spencer's job cuts had been confirmed. The presenter then acknowledged that, yes, the media had been reporting on this all morning, but Peston had now confirmed that "ITS NOW OFFICIAL!!!!" breaking news.
It was nothing that anybody didn't know already, and I find Robert Peston messaging other BBC presenters to let them know news we already knew, so that they can 'break' these titbits on air a bit annoying. The presenter gave massive airtime to "this is the breaking news from ROBERT PESTON", repeating his name a number of times. The messenger is not the news.
Why does this blog have a number of quotes on the top right from different sources saying how amazing Robert Peston's blog is? Is this some kind of movie, theatre or film billboard, where the opinion of a reviewer or a paper might swing the onlookers' opinions on whether or not to see that production?
Does this blog really need 'adverts' like
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"Through these turbulent times for the global economy, I'd say the most compelling read is Robert Peston's blog."
Website: Product management blog
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I'm all for Robert Peston's journalism in general, just find it a shame that it looks like he is campaigning to be in the next Bourne movie.
The Bourne Depression: This time its personal (savings). Starring Matt Damon, Robert Peston, and Angelina Jolie.
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One thing politicians seem to do consistantly, is dissapoint all of the people most of the time. A global reccession a great time for all politicians to come up with some real help and ideas but all they can do is bicker and snipe at each other
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#355 and 356 Red lenin.
I support you on your view on post 347, quite distasteful and disrespectful I thought, particularly considering the nature of the contribution he was commenting on (#323).
For sure there are people out there as 'citygambler' describes but as usual the 'silent' majority of them just want a chance to make a contribution and live an interesting life society does not provide that for them.
With respect to alex Curzon's identity, I am quite happy to accept he is a very successful buisiness man.
What I am less happy to accept is that as such and some one who clearly cares enough to spend time contributing here why does he not use his privaledged position to take it a stage further.
Hence my challenge to him to set up the pestons bloggers website, my goading of him is intended on my part to be good natured and with a positive outcome.
Hopefully it comes accross that way.
Jericoa
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Re Downing Street petition-
Didn't another blogger say it had been loaded by Downing Street with a spelling mistake of some sort?
Checking back on this blog to find it.
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Get rid of nuclear weapons to save some money
We can not afford luxuries like bombs (globally)
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I am very ignorant where economics are concerned. But I understood from the news that nearly all countries are in bad debts. I always thought that where there is a debtor there is a creditor. To which country are we owing so much money?
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#355 red lenin
You make a valid point. The corporate body (private and public sector) particularly when the organisation is large stifles individuality and originality. It is very evident in the US where the big 3 carmakers still produce (well up to 6 months ago) old style large dinosaurs (sorry limousines) that no one really wants. Even IBM basically makes newer computers with bigger RAM and ROM with smaller chips made by someone else and then only cos Microsoft's newer software demands it.
Risk taking only occurs with start ups, yet all governments in the current crisis are seeking to maintain the staus quo i.e. preserve large existing companies (even if past their sell by date) at the expense of an aspiring wannabe firm. A lot of what I see in corporate UK is copy catting, but very little genuine innovation.
Government can play a part in innovation, witness the efforts of Tony Benn and Concorde as a wonderful technological breakthrough albeit expensive. Not as expensive as the current government's policy of outsourcing massive IT projects that no one wants or a third runway at Heathrow (dumb).
The modern corporate ethos will mouth platitudes encouraging innovation and reward new initiatives but in reality UK management is risk averse. You ever wondered why Australia is such a popular country for young professionals to emigrate to?
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Billionare.
For what ?
So you can have all that money doing nothing but earning greedy people more money.
While billions of people live like animals.
Id personally have a bit of trouble sleeping at night.
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more cost cutting areas for reductions:
id cards cctv, dna databse, large counter-terrorism units, wars, military budget, unnecessary government departments, inefficient expenditures
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#357 glenaflon
You are correct in a conventional sense but these are not conventional times and the solution is unlikely to be conventional either, but it will be political.
There is just something fundamentally wrong with the current system that goes beyond 'tinkering' within the boundaries.
I just get the feeling that technology availability and language convergence (toward english) and communication (the net) and global trade is running way ahead of the systems still in place to manage it.
The 'political' systems trying to manage this is a heady mix of religious, tribal, democratic and authoritarian.
The net and language convergence and international trade brings us all together and makes us all inter-dependant on each other yet we are still light years apart in many ways and the whole thing is massively out of balance.
The world economy is simply a reflection of that greater philosophical imbalance, it is not the imbalance itself (a common mistake it seems). Tinkering with the economy will achieve nothing on a nation by nation basis.
The technology and knowledge is available now such that all countries (if managed sensibly and huge overpopulation curtailed) can be self sufficient in basic needs ( food, shelter and energy) in a sustainable way.
That has never been the case before in human history, which has largely been a fight for those resources in various forms.
A starting point of all nations being self sufficient in basic human needs would be a worth while thing to kick start the global economy again with dont you think?
Once that is sorted we can start to trade the rest.
I really do think that something like that is worth getting politically motivated for.
Jericoa
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While it remains impossible for people of integrity who will follow their conscience to be elected as independent politicians, we will be stuck with our lot.
We need political leaders who put the interests of the country before the party, who will take unpalatable decisions and resign when proved wrong. The whipping system should be declared unconstitutional.
Do not hold your breath though. It will NEVER happen.
About the only positive thing one can say about Gordon Brown is that he was still on the job when his hubris met Nemesis.
Business leaders should be remunerated by value added not cost subtracted. I find it incredible that a company?s Board and senior management can take bonuses when profits increase purely on the back of cost cutt