Rock blew whistle on economic flop
The National Audit Office's report into the events leading up to the nationalisation of Northern Rock can be captured in three simple points, none of which will surprise you:
1) In 2004 and subsequently, the Treasury - under the then Chancellor, Gordon Brown - didn't appreciate that banks were taking on dangerous risks by becoming dependent for funds on wholesale markets, and didn't see the urgency of making adequate preparations for the possible collapse of those banks (even though it recognised that it didn't have an adequate system for dealing with such crises);
2) In the autumn of 2007, the Treasury - under the current Chancellor, Alistair Darling - didn't expect house prices to fall by more than a few percentage points and didn't believe the UK would suffer a recession;
3) Until far too late, all the authorities - the Treasury and the Financial Services Authority in particular - had a hopelessly naïve view that Northern Rock was not taking excessive risks by providing 100% mortgages at the top of the housing market.
Of course it's embarrassing for Gordon Brown and Alistair Darling that a spotlight has been shone again on their misjudgements. But we've known for many months that they were wrong on these very big issues.
A mountain of evidence has been building and has been visible for more than a year that they, and the Bank of England, and the Financial Services Authority (and the US Federal Reserve, and so on) simply didn't appreciate that - since around 2000 - they were steering the Titanic into the mother-of-all economic icebergs.
Their misjudgements in the Northern Rock debacle were symptomatic of a much more serious economic myopia: they didn't see that the architecture of the financial system was fatally unstable and that the foundations of our economy were crumbling under the weight of excessive borrowing.
However, as I've said, I think we already knew that, didn't we?
I'm 
© MMIX~RS~q~RS~~RS~z~RS~22~RS~)
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Last night it was the nineteenth century and today we are looking back to the early 20th? If Robert is right and collectively we have steered the Titanic into the mother of all icebergs thaen what are you going to do? Will you join the band and keep playing as if nothing has happened? Will you sink or swim? Business guru Tom Peters says resilience is key to surviving the credit crunch and he’s right. So if you have the Economic Mindset Syndrome that is rife then it is time to get a more positive approach and a survivors mindset. [Unsuitable/Broken URL removed by Moderator]
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We did know it. And we look forward to repossessing No 10 and and No 11 Downing Street.
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This is quite a misleading interpretation of the report. I have read the NAO's own executive summary and it says something quite different - not about Brown and Darling at all. Follow this link to see what the NAO actually thinks:
http://www.knowingandmaking.com/2009/03/bit-unfair-robert.html
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I notice that John and the rets of the BBC are happy to jump on bad news - but when Prudential puts out very good results (including the pre-tax loss given the last 18 months) the BBC in all forms hides away its comment and then just concentrates on the loss. I'll be honest Mr Peston - you're becoming part of the problem!
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The many failings of GB must be kept in the headlines to make sure that we do not have to suffer the "headless chicken" policies of this unelected disastrous excuse for a prime minister or anyone like him ever again.
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So the government continued to give 125% mortgages to buy-to-let landlords through northern rock after it had started to bail the company out?
All because many people ,including Alistair Darling thought that house prices could never fall by more than a few percent.
But moving forward, since we have seen in the US and UK, that house prices can fall by at least 20% in one year, why is the government (through northern rock/RBS) still giving greater than 80% mortgages? In this falling market, the interbank markets will correctly value a mortgage of greater than 80% and the house as collateral as worth less than 80% of the property. [the expectation is that the person has an option to walk away from the house if house prices continue to fall before the collateral can be sold]
So anybody taking out one of these mortgages is taking free money from the banks. Given this, what incentive is there for commercially rational banks that wish to stay independent from the government (hsbc/barclays) to lend?
And what legislation can we expect from the FSA/Government to stop these foolish buy-to-let landlords taking out these 80%+ mortgages which are free options around the necks of every man, woman and child in the UK?
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Robert, while on the subject on whistle-blowing and Northern Rock, were the Treasury Select Committee made aware of the BBC Business Editor's association with an organisation called Common Purpose when he was called to give evidence on his potentially damaging reports on Northern Rock?
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Yes, many of us knew it. but i'm not convinced that Gordon Brown really believes it, even now. Until he really does come round to putting savers first and borrowers last, this country can't move forward securely. Let's hear the effect on savers of each government intervention mentioned ahead of the effect on borrowers.
e.g. 'Interest rates have been reduced by x percent to y%. The effect will be to reduce the income of a saver with £z000 by £c per month. Borrowers may be better off.'
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They didn't see it coming?
They only had to look at recent history.
The savings and loan disaster in the USA in the 80s.
The UK property collapse of the 90s.
The Japanese property collapse of the 90s.
The dot-com bubble collapse.
All massive excess, and all with the same result...disaster.
"Stimulating" economies by property booms does not work.
It is an old trick.
It is now defunct.
It is always a "house of cards", and they should have known that.
This world-wide mess is a result of another failed property boom in the US and the UK, but this time with a doomsday result.
Wait until the public gets the bill.
They don't have to study all those complex financial instuments, just look at the price of houses, and then look at the average wage.
A bunch of schoolboys could have run the economy better.
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Spam Spam Spam Spam,
Bank Bank Bank Bank,
Bank Bank Bank Bank,
Bank Bank Bank Bank,
and so on in perpetuum mobile (to the mods: this is a musical term meaning perpetual motion - please don't censor it 'cos it's not English!)
Robert - I find it hard to dislike you, and your TV performances are mildly entertaining, but you are supposed to be a business editor and not a banking correspondent. Are there no business stories out there to discuss? It really is getting very annoying, even embarrasing. Go to the once industrial north, or come back here to West Wales. There's loads to report on relevant to the whole country. Eg, lots of new build properties are empty. Now they're to let rather than for sale, but still no takers. Will the new LNG terminal at Milford Haven affect gas prices? ... Lots more stories just waiting to be told, and fitted into the bigger picture. DO IT!
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So we don't need a novice at these times we need someone with a proven record of not being able to see the writing on the wall?
Don't dare let them get away with saying no one could see this coming. Plenty of people did including the IMF. Gordon Brown simply could not admit that the whole sorry charade was a credit fueled speculative bubble in housing. They are still in denial. Like alcoholics the first step is recognition that there's a problem. Any evidence of this?
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Yes, Robert, I think we do know it, and yet Flash and his team seem to think if they ignore it, it will go away.
Labour has presided over this country's economy during a period where you simply had 'to be in it to win it'. We could have had Jimmy Krankie in number 11 and we'd have had as good economic growth, built on as big a house of (regulatory) cards as we have now.
As Buffett famously said "It's only when the tide goes out that you can see who's been swimming naked."
Time to put your bathers on, Gordon, get out of the water and go on home. I say get Vince Cable into the Treasury he's the only one who's been consistently talking sense on the economy.
Okay he's not exactly Mr Personality, but he's got one thing over all of the current Labour bigwigs: Credibility.
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Of your 3 summary points, Robert, no 3 is the most damning. 1 and 2 require the govenment to have the ability to see into the future, but 3 is a lack of basic common sense. And it can't be blamed on the USA.
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4) The British financial press didn't appreciate points 1) 2) or 3), or equivalently, didn't tell the public, even though it was patently obvious to most people that banks were lending excessive amounts and making money out of thin air.
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I think we are still borrowing excessively. You see reports of some companies asking for loans to help tide them over till demand returns, but what if it doesn't return, or at least not to the extent that they require? With the UK expected to have a prolonged recession, are these businesses at risk of defaulting on their debts?
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Surely this is the smoking gun we all knew was there? The crash wasn't an asteroid which landed from outer space: it was an event which was forseeable and should have been prepared for. This is Government incompetence which all of us will be paying for over the next 20 years. Angry doesn't begin to describe my feelings.
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Now if I went around talking of crocks of gold at the end of the rainbow, ancient treasure in barrows guarded by dragons, golden rings of magical power and the wealth of the King of the Leprachauns I would be treated at best as mildy eccentric and at worst subject for sectioning under the Mental Health Act.
So how come the government and The City were so sure that the economic cycle had been abolished for ever? This is what we are talking about: a wholesale failure in rationality at the highest level in the country.
This `The Emperor has No Clothes' writ large all over it. It is not just amazing, its quite incredible!
It is unfair on the mentally instable to say that this is a government of the mad. I can deal with people who are mentally ill, who need help with understanding, as often all they need is some kindess and respect.
But to elevate what one can only describe as a myth into the centre of economic strategy is truly frightening. What else are they up to even now?
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If as you say we already knew this, why won't Brown et al apologise for these clear mistakes?
It beggars belief that the people involved could take such risks and make calamitous mistakes and not be held accountable? May be we are all drifting towards apathy, which is why the latest story about Govthern Crock doesn't surprise us?
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I'm not sure why we should be surprised re the continuation of 125% mortgages for so long and this whole fiasco re Northern Crock.
Virtually everything else that has come out re the FSA and Treasury handling of the banking crisis since the Northern Rock run especially Sir Fred's pension has shown up their complete inability to be able to even organise a drinking session in a brewery.
Words fail me at the level of incompetence yet again exposed.
I'll stop now before I write something that we all believe to be true but which would get me blocked.
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Robert
The NAO report is a scathing indictment on the (in)competence of this government. Almost everything in that report was highlighted by bloggers when you broke the story from the Together mortgages to the lack of due diligence.
When Alistair Darling announced the nationalisation of the Wreck he told taxpayers that we would receive a payback on the rescue and eventually make a profit. He was either ignorant or misspeaking as it is clear that the cost to the taxpayer then was estimated as between £1bn and £10bn. It is clear that even on that basis the company will never become profitable enough to sell off without writing off a huge amount of the taxpayer's investment. The reality is that 30% of the mortgages are Together which equates to them now being 100% in excess of the current value of the houses on which they are secured. The whole company is clearly a basket case and will only struggle on until put out of its misery at some convenient time in the future.
On the findings of the NAO report Darling should resign.
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"Of course it's embarrassing for Gordon Brown and Alistair Darling that a spotlight has been shone again on their misjudgements. But we've known for many months that they were wrong on these very big issues"
Well of course Robert we all knew it or at least strongly suspected it, but they don't seem to be able to recognise this fact. Gordon will even shout at you and threaten you if you suggest it to his face, in fact.
It is frankly a disgrace that a man so utterly deviod of decision-making ability, or indeed any other redeeming characteristics, is the premier decision-maker in the country!
Call an election!
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Oh dear, this looks like a wholesale machine-gunning of ostriches !! Many had warned that this would come to pass but, as in the words of a famous song, "there're none so blind as he who *would* not see" !!
Perhaps a "mea culpa" or two by the politicians in charge might improve confidence in the British economy a tad !!
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what is incredible is that no-one have the courage to stare down anyone.
If risky lending was continuing it was probably on the basis of a contractual obligation. (sound familiar)
As usual the good old British taxpayer only has the obligation to pay up, but not the right even to an NHS dentist.
we have 15 more months of this.
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Yet again evidence this govt have no idea what they are doing. We need a general election now to stop them doing anymore harm; we need to appoint Vince Cable as Chancellor and start again ie making and building things in this country. I am afraid the green issues are going to have to come second to this - like or not we have to go back to basics, drop all political correctness and start making some sensible decisions that we can afford.
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Yes Robert, we most certainly did know that. Maybe you should be reporting government mistakes without the Labour spin from now on?
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What is shocking and unacceptable is that all this buccaneer free enterprise stuff occurred under a Labour Government and a 'heavyweight' Labour Chancellor. Many thousands will now have a personal understanding of the Klunking Fist of GB. Idealogically retarded, economically naive, and politically clumsy it is the duty of every Labour MP to rid us of the unacceptable face of New Labour if, like 30 years ago when I was a Labour parliamentry candidate, they wish to avoid the political wilderness for 10 to 20 years.
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We all knew it already Robert
The trouble is Gordon still doesnt believe it.
Therefore he is not the right person to get us out of this and move us on to a safer course.
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Robert, in your earlier article you stated, "If only our bankers had the flair and imagination to direct their depositors' money to genuine creators of wealth".
That gave me the notion that the problem here is the word "wealth" and that the same word is being used by different people to mean different things.
Had the boards not gone down, I would have asked such questions as "You mean 'paper' wealth, not 'real' wealth, perhaps?" or "You mean quick-buck, short-term wealth, on the 'never-never'?
It seems increaslingly clear that no solution to the current financial crisis will come from anywhere. Too many in the fiancial industry and the political arena seem to believe they can just use one mechanism or the other to effectively turn the clock back and go back to making lots of paper wealth, propped up by lots of credit. Even if some visionary does see the way forward, the chances of getting any sort of agreement, inplementation and compliance from the global governments and fiancial interests, is extremely slim.
However, in looking at Northern Rock and the other failures, it is of value to remember that some more prudent institutions did NOT get themselves tied up with significant amounts of toxic debt. Some operated with better wisdom, higher quality risk management, proper levels of due diligence AND with better ethical standards.
In my book, we should be looking at them as role models, or "Beacons". Yes, even if that does mean a return, in some ways, to the 19th century.
Let's be clear, we can all say we mustn't get protectionist, but as we can see, others may well do just that, e.g. today's story on Renault. And also, Mervyn King made a good point about global banks being national in death.
For Jo Public - whether as customer, shareholder, investor or what - there is a "wealth" in being able to trust the people who are handling his/her money. And many are finding another type of "wealth" in the arena of so-called "ethical banking".
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What all thsi does show is that the march towards nationalisation is the march towards penury. The Government have no idea how to run any of these things, despite spending £80 million on advisers.
Whatever happens, let's hope this is the worst of it and the news gets better. It is laughable that the government continued to offer together mortages - pushing all those people into debt!
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Why am I not surprised? If any of these new loans go sour then maybe the new management should be held personally responsible for the specific bad debts. Lending 125% when the market was on the "up" is highly questionable - but doing so when it has peaked and crashing is downright negligent. But given that it's now in effect a "Public Enterprise" I doubt that anything will happen anyway. Plus ca change!
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We may well know all this Robert, but we have to discover anyone accountable for these failings. Or did I miss that bit?
The report doesn't really say it was all America's fault either.. or does it?
So the question has to be, why hasn't someone resigned?
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Very good points Robert, but I bet Gordon still doesn't say he is sorry.
As a lay person I could see that the housing boom in Britain was unsustainable, so why couldn't anybody in authority?
I bought my house in 1997 and paid £47,500 pound for it, a 3 bedroom terrace in Sheffield, at the height of the housing boom it was worth around £150,000, which is insane over inflation of it's value by any means.
Banks and ALL the authorities need to take joint responsibilty for letting things get totally out of control.
My solution from a personal point of view would be not to bail the banks out directly, rather the customers with a mortgage, i.e. it would be cheaper for the government to underwrite 80% of every single mortgage in the country, wiping that debt from people's mortgages but not crediting any real money to the banks who lent it, just cancel the debt, a far better form of Quantitive Easing.
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Can I go out on a limb and make some predictions about what will happen as a result of the NAO report?
1. The government will say how terrible it is and blame it all on some middle-ranking civil servant, who will be sacked.
2. No-one at a senior level will even remotely be held to account.
3. The government will say that lessons will be learnt.
4. The only lesson that will actually be learnt is that it's useful to have disposable middle-ranking civil servants so that there'll be someone to blame next time the excrement hits the fan.
Have I missed anything?
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http://news.bbc.co.uk/1/hi/business/7954811.stm
Dithering Darling and Babbling Brown, when will they look after the interests or OUR workers?
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"However, as I've said, I think we already knew that, didn't we?"
I assume Robert that statement is meant to be ironic, i cannot recall one political or economic pundit who was against any of the governments buy outs or resue packages at the time, and very few since.
Nor do i recall many protests by same pundits against the implementation of said buy outs or rescue packages.
In fact the only people who have maintained their position since the start of this almighty mess, are various posters on various internet forums and bloggs.
For my own part i have been against the policy this government has followed, not because i hate the banks, or capitilism or even democracy, but because every thing this government does they wreck.
The vision this government has created either through luck or design is that the guilty should be rescued ( overextended individuals and companies) and the innocent punished ( savers). They have subverted supply and demand, after all people with money whether rich , poor, old or young should in these current times be feted by businesses and banks as having the very thing, "oh blessed capital" that is in such short supply. Instead under Mr Brown we have "the world turned upside down".
One can only assume, when dealing with such downright stupidity that something much greater than the Uk banking industry is at stake.
I do not hate the Lbaour party per se, and no full well that i will be no better off under the Tories, but i do not believe that when Mr Blair talked of an inclusive society, he meant penury and ruin for every one.
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The country needs a government that is secure in its position for 5 years so it can take long term measures to get us out of this mess.
Labour need to do the decent thing and call an election immediately.
Anything else is just further mismanagement by Labour.
I think the electorate would have a lot more respect for Brown if he owned up, explained that the country needs a secure government and went to the polls. Who knows, he may even get back in.
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Forex markets are still ignored. How much money that could be used in the real economy is being "risked" by our bankers?
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Hi Robert
When it comes to financials these politicians are clueless. To make it worse one of them was the chancellor for 10 years. The financial institutions seem to be able to run rings around them. Take the companies that are connected with Lehman Brothers in the UK. They are making life miserable for lots of mortgage holders in these companies. To make it worse nobody knows who owns the mortgages because of securitization and it looks like the courts don't have the time to investigate. The only MP which started to make some noise about these was Vince Cable and he got the name wrong. Just look at some of the forums where people are trying to fight to keep their homes and every time they go to court they're hit with even more charges. In the USA I understand they are looking into securitization. As they have found that the companies seeking repossession are not the legal owner of the properties.
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What is the betting that the 41 unmoderated comments all say "yes we already knew that". Can you get hold of Crash Gordon and find out why he did not know it. When is he going to take personal responsibility for the incompetence of himself and his government and call an election.
Perhaps he will simply say yet again "I did not know". It is his job to know.
Whilst on the subject the government needs to sort out its instructions to banks. Is any lending the objective, even if it is irresponsible (eg more 125% mortgages in a falling market)? Or should banks only lend on the basis of perceived good risks? It seems to me that there is a big mis-match in the economy at the moment because banks are trying to be responsible. How about the government defining a business loan guarantee scheme under which the Treasury takes, say, the first 10% of risk.
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On Thursday, US lawmakers in the House of Representatives voted 328-93 in favour of legislation to levy a 90% tax on large bonuses from firms bailed out by taxpayers.
A 100% sensible legal tax move that only applies to the high earners not the front desk clerks on low pay.
Come on GB/AD - you know this would not only be popular but is what Obama is doing and might stop a riot or too and would fill a (very tiny) corner of that big black hole of government funding.
Come on - you can do it - I promise that if you bring in this legislation I will overlook all your previous mistakes and vote for your party at the next election (maybe).
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The whole picture displays how out of touch the chancellor, the treasury, and the government were, and still are, with reality. It was obvious to many that we were heading for a problem, lots of senior economists were saying that it was unsustainable to continue borrowing at the levels then, also M King said that borrowing was way off scale.
The newspapers were sounding alarm bells so prudence was evicted when Gordon came on line and we are ill prepared for our current prediciment. Lessons are continually being learned but with no results.
How we were propping up a business where the business model had been a failure, yet continued to lend on the same lines is totally outrageous and incredible.
This government are totally incompetent,
the business people brought on stream seem to be of the same quality as the government,
they know nothing,
none of it happened when they were there,
they take no responsibility yet they stay in situ,
everybody talks a lot about initiatives,
there is no joined up thinking,
it is all a shambles, and we are paying for it, which makes it hard to bear.
For those who were actually prudent, lived within their means, saved, and took responsibility for their lives there has been no reward.
What now? Borrow more to dig us out? What a joke. They are the KNOW NOTING PARTY on every level.
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Out of their depth going in!
Out of their depth coming out?
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This should be no surprise . We have all suffered 12 years of Brown's mismanagement and incompetence.
The writing was on the wall years ago. Economic growth-what a joke. More like an out of control socialist borrowing binge, and still they cannot get a grip.
Deja vu.
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How can there be a new capitalism without accountability and ethical trading ?
The next phase for developed countries must be a more holistic approach. We can't go BACK the the old system of increasing growth, that didn't work, we need to go FORWARD.
To get to the next level of human developement and a more sustainable way of living REQUIRES major upheaval - that's now happening.
I'm with Don Beck and Spiral Dynamics, roll on Turquoise !
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So the government continued to give 125% mortgages to buy-to-let landlords through northern rock after it had started to bail the company out?
The 125% mortgage is not the problem! It is weather the person taking out the loan is low or high risk. Lets no go back to the pre thatcher years where you had to beg and queue to get a mortgage. My first flat was bought with a 110% mortgage at the top of the market. But since I was not high risk customer I was able to may the mortgage even when the intersest rates went to 13% (from 7%). It appears that there are many shouting from the side lines, many of whom have never worked in banking, have never been a CEO or any kind of chief. Those posting should speak to elders, to make sure we do not return to heavely regulated banks and mortagages. As a northern rock share holder, what happens when they back all the government money? Will my shares be worth more than zero?
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In 2003 I advised my brother to sell his house, which he did, and sold my own, cautioning anyone who'd listen to consider doing likewise.
For the next three years I received a fair degree of ribbing and ridicule, and the accusation of being out of touch with the new reality.
My answer throughout was the higher it goes, the worse will be the crash.
If it was obvious to me (and a few others) that the level of debt was becoming unsustainable enough to cause a catastrophic collapse, WHY wasn't it to the authorities? It beggars belief that intelligent, informed people can let herd instinct and wishful thinking overcome common sense.
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The foundations were certainly unstable, but much of it was for reasons that have been true for a long time. Free markets can work, but the conditions need to be right - and need to be established by Govt:
(1) There must be full disclosure. With company activities being so opaque as to make investment a guess at best, this is clearly not so.
(2) There must be clarity of ownership and enforceability of contract. We often forget this (since we are not Zimbabwe where the government will suddenly decide to give what you believe to be yours to someone else), although we do get the odd nationalisation. However, although we have more than enough laws to establish contractual rights and ownership, it is cumbersome and expensive and is therefore not available as required - except to those who are rich enough (or poor enough to qualify for legal aid, and they won’t be involved in this kid of finance). And our legal system certainly does not get the job done in a time frame that is required to keep pace with the speed of market movements.
(3) There must be no knock-on effect of external transactions involving other parties – or even involving the same parties. Even that doesn’t seem to be true when complex ‘products’ are being invented and sanctioned by those who do not understand them. This is where regulators should step in and notice the knock-on effects and disallow that type of business in a free market scenario.
This is what we really mean by a failure of ‘regulation’. The government have allowed the inherent problems to remain and in fact to grow worse, while a lesser degree of critique is required by the FSA etc.
So in my view, in order to ‘fix’ capitalism, we need to sort out the prerequisite conditions that have been neglected for years: greater disclosure, a more accessible, streamlined legal framework and transparency in terms of the external effects of business activities and regulators that understand exactly what types of business they should disallow in that respect.
In essence, to say that the free market economy has failed is not really true – it is really the failure of government to create the conditions required for it to have a chance to succeed.
That is not to say that there should not be limits on fat cat pay – of course there should. There can be no bonus for short-term gain since only the long view tells us of the true performance of business leaders. All of which is part and parcel of (1) above – full disclosure certainly gives us a better idea of what they have actually achieved.
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It was obvious to everyone that we were in a bubble (particularly house prices) that would one day require a drastic correction. The bankers ignored this - and more shamefully so did the government. They turned a blind eye and happily raked in corporation tax and stamp duty, despite repeated warnings from the IMF. Gordon Brown's attempt to blame everything on external "global" forces is risible.
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Hi Robert
Actually before Labout was in power. The then Tory's had a few scare as well. What happened to them credit card booms and resulted in the black Friday................... Why people did not learn? Could be because they were too ignorance? They blamed on the sophistication of these new financial instruments and hedge fund etc but it is nothing new. The labout Government just dont get the right advice. Why Chinese people in Hong Kong like saving their money even though interest there is so low? I do, my parents did and my grand parents did and that's why Standard Chartered and to certain extent, HSBC are surviving as they built their empire mainly from the Far East. By the way I came from Hong Kong fourty years ago. Saving is a habbit, a cultural things. It won't be changed overnight. Look at the kids nowadays. They borrow up to the heel. Problem is borrowing habbit started from the top ie the Head of the State, the family etc.
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#13 - "It's only when the tide goes out that you can see who's been swimming naked."
That's priceless.
So are we saying that what has happened on a global scale could and should have been anticipated and those (Brown/Darling) that were arguably partly responsible are now running the Government.
Brilliant.
And that the FSA who is supposed to regulate the financial institutions is run by those who used to work for the banks. No conflict of interests there then.
"Bankers"
Many economic theories and models are based on "assumptions". It seems that they have made the mother of all assumptions.
I'm not even sure who to blame or how to fix it anymore.
I't all about greed, prestige and not losing face.
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Robert,
I’m not sure if you are not the most gullible of reporters on the BBC staff or you just report what your told “A mountain of evidence has been building and has been visible for more than a year that they, and the Bank of England, and the Financial Services Authority (and the US Federal Reserve, and so on) simply didn't appreciate that - since around 2000 - they were steering the Titanic into the mother-of-all economic icebergs.”
Ask your self the question what happened in 2000 that set this all rolling ? Why yes we had the dot com bubble burst with billions of dollars and pounds wiped off of share prices. I suggest that you read Robert Lowensteins book “The Crash” the analysis of the dot com bubble and the reasons why it occurred are almost identical to the problems we now have in spades. GB presided over an economy where inflation was held in check not by an improvement in economic efficiency or fiscal or monetary policies pursued but as a result primarily of deflationary imports from China. Moreover, the inflation targets and measures were skewed to under report inflation ( house and land prices were excluded plus new product features evaluated as price deflation ) both US and UK governments sat on their hands as trade imbalances with China grew and surplus cash from these trade imbalances together with an uncontrolled expansion of the derivative markets expanded money supply and cheap credit it was the availability and expansion of this cheap credit that drove the asset price bubble and both US and UK governments knew it was happening but were content with the consequences. The problems we have today are a direct result of government policies in response to the dot com crash just as the current policies being pursued by Brown are the seeds of the next cycle. Can we please ask the Audit Office ( they appear to be the only department with some integrity left) to investigate the role of the Bank of England monetary policy committee as to why they did not act to curb the expansion in money supply when it was clearly one of their key responsibilities.
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"Treasury minister Stephen Timms said "lessons needed to be learnt" about the handling of Northern Rock."
taken from bbc news.
ha,ha,ha,ha,ha,ha,ha,ha,ha,ha....................................
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Northern Rock - £800 billion and 6 months of giving out 125% mortgages after the taxpayer proped them up.
Still none of this is Gordon`s fault is it??? How I wish the election was this spring!
"UK will have the worst deficit in Western world, warns IMF"
http://creditcrunchedoutinuk.blogspot.com/
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I'm fed up with all this credit crunch stuff...
I suggest we have a regulator that regulates the regulators... ohh stupid me that's the government's job isn't it.. LOL
I have a simple answer to all this... based on the following..
1) We all owe the banks money
2) All the banks owe the goverment money
3) The government have used our cash to save the banks
Therefore the answer is: Lets just call it quits and start again..
"Show Me The Money"
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I hope every person who changed their vote from conservative to labour in may 1997 can now see what a terrible mistake they made. The "prosperity" of last ten years has been based on illusion and un-repayable debt; it is very easy to write cheques Mr Brown, it is much harder to earn the money to make sure they do not bounce - I am sorry you have to go. I am afraid history will pour scorn on this administration I just hope this country survives what is coming so our children can make sure this reckless nonsense is not repeated. Everything this govt has done is unravelling in front of their eyes because not one thing was thought through. Our health service is in a state; we have invaded two countries without just cause; our legal system has been engulfed with ridiculous EU laws and compensation claims; our schools are in turmoil because teachers do not feel trusted or supported; the pension industry has collapsed (remember Mr Brown's act of removing tax relief on dividends? he was warned...). I could go on and on.
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Robert,
Yes we did know it - BUT why are the same people who regulated the collapse STILL in charge?
The Governor, the MPC (including its latest member a mortgage 'expert'), the FSA and the Treasury - all should/must go and go now!
It is hugely symptomatic of the appealingly bad thinking that the Treasury has today appointed a mortgage 'expert' to the MPC - I don't need to remind everyone that anyone involved with the mortgage business over the last decade is absolutely tainted by the business and is not fitted to be on the MPC going forward. - yet that is who the Treasury have appointed!!!!!
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The most shocking fact to emerge today was that Northern Rock carried on giving 125% mortgages for 6 months AFTER we had taken the business over.
Is it me, or is this incompetence on a cosmic scale?
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When and where will this all end. I have been saying for more than a year that the risk of Labour not being able to fund The Civil Service salary bill is getting very close. That would trigger an election.
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I remember an aged friend of mine much decorated in world war two, saying 12 years ago that he was considering voting for the raving loony party.On asking him what the differance was he replied pensively, after due concideration, "NOT A LOT"
What should anyone expect from those who say "things can only get better" ,appart from the subsequent accountancy delusion precided over by the wyatt twerps of the sfa ,the simple simon says pied piper of sedgfield and his side kick sancho pans down man the bilge pimps
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#49 evertonw
"It appears that there are many shouting from the side lines, many of whom have never worked in banking, have never been a CEO or any kind of chief."
And thank heavens for that! It was, to a large degree, the actions of banking "experts" - particularly CEOs and other "chiefs" - that caused many of these problems, through poor risk management and, in some cases, through making dubiously ethical decisions about what they would do with other people's money. (For sure, the regulators should have at least caught out some of them, but they had seemingly been politically nobbled, for want of a better term).
Or are you suggesting that we just have a self-perpetuating financial industry, void of control, accountability and regulation, which is allowed to do what it likes with customers' and shareholders' money and permitted to imperil individuals, communities and nations?
You seemingly trust the banks a lot more than most people I know.
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Under Northern Rock's much criticised "Together" mortgage, a homebuyer could get a mortgage up to 100% of the purchase price and then take out a separate loan of up to a further 25%. The fact that this continued after nationalisation is currently attracting much media criticism.
However the fact is that the Government is still using the same model to push 100% lending into the market. Under the various "Homebuy" schemes, a home buyer can take out a loan from the Government of up to 50%* of the purchase price, and then use this loan as a deposit, allowing them to get a mortgage for the balance. This allows people to buy without saving or investing a penny of their own money, and puts the taxpayer directly on the hook in the case of non-payment or default. The Openmarket Homebuy scheme allows buyers to select any home they wish which is available for sale. In an added twist, the scheme is actively targetted at people who simply can't afford to buy.
http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_066591
If you can't afford to buy a home, the 'Open Market HomeBuy' scheme can help you to get a loan alongside a regular mortgage.
http://campaigns.direct.gov.uk/ontheladder/index.html
[Openmarket Homebuy] Offers an equity loan for up to 50 per cent of the property's value to run alongside a regular mortgage. The loan can be used as a deposit and is repaid when you sell the property. You may buy a property on the open market and will be the sole owner.
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I guess we all make mistakes. My wife forgot to go to the supermarket yesterday, I forgot to set my alarm last night, and my daughter forgot her toy at pre-school. Brown & Co just forgot to run the economy prudently.
After all the the job losses, personal catastrophes and economic misery, the sun's still shining and winters finished. I still like Gordon Brown, and as for Alistair Darling - well he once gave up his seat for my Mum on a train. And they're Scottish. I just haven't heard them say prudent recently.
Go on Robert, you big bully; pick on someone less poweful than yourself.
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Its patently obvious that the crash test dummies temporarily esconsed in nos 10 & 11 have a lot of brass (northern speak for hard faced).They just don't care...........they will turn round and deny any kind of mis-management on their own part on any subject and instead quickly change the subject.Yes,they are good at that.Their latest clutch bag appears to be the G20 summit where messrs brown,darling et al hope to regain some kind of credibility by hosting the international summit.Yes,they will grab at anything that keeps them in power-megalomaniacs.Even the shortest straw would do for these "guiltless" 2.
By the way........I think the words apology or sorry is not present in eithers vocabulary.To be in denial is the action of a fool.
As the old saying goes " you can fool some of the people some of the times etc etc "
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"Their misjudgements in the Northern Rock debacle were symptomatic of a much more serious economic myopia: they didn't see that the architecture of the financial system was fatally unstable and that the foundations of our economy were being undermined by the burden of excessive borrowing.
However, as I've said, I think we already knew that, didn't we?"
I feel full of despair reading this. Why haven't we turfed out Brown for his monumental incompetence?
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From the BBC report on all this, GB's comment is:
"We acted when Northern Rock got into difficulty, I think the NAO agrees this was the necessary course of action."
As far as I can tell the report wasn't about whether they were right in rescuing NR, it was to do with their mishandling of NR after "rescuing" it. What a surprise that GB now spins this damning report into a good story "Look we saved NR!" How about actually admitting "sorry, we should have looked at NR's lending policy"
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Post 56 it is no surprise that the token sacrificial lamb Stephen Timms has come up with the cliche re lessons being learned. Interesting that netiher Crash nor Alistair were put up to open the batting on this matter.
I can only hope the voters in East Ham learn their lesson and vote him out at the next election. He was no good as leader of Newham Council before he became an MP and he doesn't seem to have got any wiser since.
As for Crash well it wasn't his fault, apparently!
http://news.bbc.co.uk/1/hi/uk_politics/7954373.stm
You couldn't make it up! The lot of them couldn't beat a one legged man in a rear end kicking competition.
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Robert Peston why doest the British Gov put a 90% tax on bonuses for companies rescued by the tax payer? The USA has done this and there is an argument to follow their lead. What do you think?
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I've just heard Gordon Brown on the BBC talking about something or other when asked about this report. Is he ill? He is so desperately in denial and talking such old rope I think he must be. What was it someone said about a bunker in Downing Street?
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The british financial press were/are in colonoosion with the stataaa's quoers and realized that only hyper active fractianal reverse banking would save their sorry AAA's until the QE'ers were ready to pump sub prime dydl doe on behalf of the whole.
Its so obvious an "uneducated" fool could see the obscenitty of it
I challange the great Gordone0 to display whats left of his globals caught between the Rock and a haaard place by telling us that his "things can only get better",but his thumbs up were a write off
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At least the financial incompetence of our political elite and their sponsors has kept the 6th anniversary of the Iraq war out of the news.
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Robert,
There have been problems with your blog loading comments.
1. Your post on FSA : the regulator is getting his view on the record before we know what the Treasury Committee are to conclude.According to him, its the philosophy of regulation which went wrong, not regulation per se. So what do our Government say. If you look at the appendices to the Horsham Communique you will see a firm commitment to innovative and commercial banking as the best means of intermediating credit - I dont think the policy-makers have any intention of travelling back to 19th Century banking. I think I would give the Treasury committee's views more weight, and so might everyone else. Is it hug or bash a banker?
2. Banking retreat : net lending to individuals is collapsing at a rate of £8 billion per month - lending to non financial corporates is collapsing at a rate of £7 billion per month - £180 plus billion of lending collapse since Q4 2007 - some of this is recessionary credit demand collapse,some of this increased savings and debt reductions, some of this is credit supply collapse from banks in uk - this could thwart recovery - if banks are placed in full retreat, can they service demands of the recovering economy / are they still under-capitalised to meet UK economic needs, forget about regulator aspirations - more shocks to come from Eastern Europe? Who has got the lebnding capacity shortfall figures - the Bank Lending Panel meeting with Mandelson and Darling must be providing the stats - why arent we being told ? I cant find any minutes !!
3. Northern Rock whistle blowing : the best argument I've heard yet for a full independent judicial inquiry on the broadest remit to hold to account those who should have done something and didnt and those who made the worst banking business models - whatever is said, no-one has excuses for not understanding the location of the icebergs by 2006 - read the BoE Financial Stability Report 2006 and the FSA Financial Outlook 2006 - its all there !
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Don't worry everyone because 'lessons will be learned', just they always are. It's just that they will be forgotten again very quickly and more mistakes will be made. Requiring further lessons to be learned.
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It seems, at last Robert, that you are beginning to understand that all the bloggers who appear on this site may come from their different subjective political persuasions but blame this government objectively.
Just because you're Tory doesn't mean you're a posh, privately educated, rich, middle class Thatcher lover who can't wait to bash a miner. In the same way, just because you're New Labour doesn't mean that you're a common, state educated, poor, lower class Lenin lover who can't wait to hang the next toff.
What these blogs have been saying for months is that that the present administration have mis-managed the economy.
Forget about the things that they could not control.
They will be judged for the things that they could control but didn't, either because they were incompetent or becuase they were more interested in their own self gain and that of their friends and supporters.
Your article shows that no matter how much of the blame this government tries to shift elsewhere, more and more hard evidence is coming to the fore day by day.
As journalists, and a BBC one at that, impartiality is everything and I commend you for writing such an excellent piece and please, more of the same; the stories and scoops are there!
It may be that such an article will go against the grain of New Labour supporters but in the end the truth will out, and when this happens, the fair and decent people of all political persuasions will thank you because in the end, no one minds mistakes being made.
What they do mind is that when mistakes are made, our leaders are big enough to admit them, be accountable for them, take responsibility for them and then do the decent thing like falling on your sword or resign.
I am a Tory and can readily admit that Thatcher did not get it all right but she did not get everything wrong either.
After 18 years in power, the Tories lost the 1997 election; they were sleazy and tired and politically and morally bankrupt.
It comes to all parties in the end and whether they like it or not. The incriminating evidence gets extracted, leaked and published until the drip becomes a torrent, then a flood which cannot be held back.
This government is going down and this article is one of a growing many that will appear more and more in the days ahead.
And by the way, just what was in the letter that TB sent to the Chairman of the FSA?
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Northern Rock is the past.
To prevent huge mistakes in the near future may I suggest reading a paper that raises serious doubts about the analysis as well as the effectiveness of deificit spending ('fiscal stimulus') that the UK and the US governments are pushing for:
[Unsuitable URL removed by Moderator]
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Gordon Brown has defended his handling of Northern Rock against criticisms of government negligence, saying he took the "necessary" steps to save the bank.
Opposition parties say a report showing Northern Rock lent £800m in risky mortgages after it was bailed out with public money was "damning".
The Conservatives said such failings were "inexcusable" while the Lib Dems said they warned ministers at the time.
But the PM said the alternative was letting the bank collapse
I have news for Gordon. In essence it did collapse. It certainly isnt a private company now is it!
It would have cost the Tax payer and darn sight less if it had been allowed to go to the wall completely
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On regulatory failures:
The government said the issue had been "considered in depth" and "a good deal of detailed work was carried out from 2004 and through 2005 and 2006".
costing how much and achieving WHAT? Brown regularly tells us at PMQs how much money is going to be spent "helping hard-working families" etc. - but the money seems to disappear into a world of advisors and incompetent project managers before failing, utterly, to achieve it's original goal. Why is no one capable of getting the incompetent lying weasel to answer any questions properly, why isn't there absolute uproar at what is happening in this country? Forget the credit crunch, WHY ARE WE SPENDING SO MUCH MONEY ON C**P???
Oh who cares any more.
I'm going to the pub after work.
call an election.
If you can be bothered.
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#74 NewsNigelcollins:
"At least the financial incompetence of our political elite and their sponsors has kept the 6th anniversary of the Iraq war out of the news. "
++++
The Iraq War:
Another Glorious Defeat for the British ( like Dunkirque ).
Sorry for OT
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The National Audit Office's report does help explain why Brown's claim that tax havens have caused UK banks to collapse seems stretching it a bit, to say the least. But then, maybe Northern Rock was one of those 'shadow banks' that Brown now is also talking a lot about. Well indeed it is, but not in Brown's way but because it has blown up. Obviously it's all the US's fault, as is Brown's subletting of his contituency office.
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RP:
"A mountain of evidence has been building and has been visible for more than a year that they, and the Bank of England, and the Financial Services Authority (and the US Federal Reserve, and so on) simply didn't appreciate that - since around 2000 - they were steering the Titanic into the mother-of-all economic icebergs."
++++++++++++++
I cannot accept that.
Was not the previous FSA chief moved sideways/out because he brought these matters up?
Someone knew 'what was up' and had him moved out ( later than 2000 was it not?).
I wonder who they were?
Sorry to sound pompous but the site does not handle apostrophes very well.
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The main objectives of the Northern Rock fiasco were to salt away the money into Granite offshore, and to give J P Morgan the best parts of their book as a dowry for the thieving Blair.
They might have survived without Brown's largesse if they had been left to make their own destiny, and the example would have made the likes of RBS and HSBC behave themselves. The funds from Granite would have come home, and Blair would have had to find another gang to latch on to.
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HBoS and FSA - Crosby - government adviser
Northern Rock - Wanless - govenment adviser
RBS - Goddwin - government adviser, well after being pushed from the sinking RBS wreck (can a wreck still sink?)
Perhaps there is a link?
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Norther Rock mistakes were made in the past. Although the mistakes are very illuminating about the quality of Brown's stewardship, it is now more important to prevent future mistakes, such as borrowing for deficit spending to try solve a debt problem. Therefore I suggest reading a paper that raises doubts about the quality of the analysis that supposedly supports deficit spending as well as about the effectiveness of fiscal stimulus. The paper is written by four economists on the top of their game, including John Taylor who devised the Taylor rule for interest rate setting.
The paper is titled
New Keynesian versus Old Keynesian Government Spending Multipliers
The paper can easily be found on the web (the BBC won't post the link I've found out)
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Who do we trust? The banks? The goverment? the FSA? Two years ago my father who I might add is not a banker said watch out son problems are afoot.I laught at his comment thinking what he said was full of doom and gloom.Well Dad I take it all back your were right.Now I know who I can trust my father.What a wise man.
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Sorry folks, but all this debate, laudable though it is misses one big, huge, enormous blunder. Who was appointed to sort Northern Rock out? A Barclays boy through and through...where was he when Barclaycard entered subprime lending?
Er, is he the best man at the helm in these troubled waters? If so, God help us.
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Don't know why the incompetence should be such a surprise, ever since Nulabour climbed into bed with the city sorts they have been well and truely tucked up.
Idiots shown up to be just that, Pinoccio like noses so long they stand no chance of seeing past the end of them without binoculars.
NO ONE can see into the future and yet year after year the Chancellor of the Exchequer trys to convince all and sundry he has this prophetic talent...fools, much like the coat tail hanging journo's who swallow every single word.
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This whole episode shows the potential for even greater calamity that exists in letting civil servants control the banks. Heaven help the taxpayer when they start tinkering with complex lending and banking products.
An earlier poster referred to Lincoln.
There are fools like Darling some of the time
There are fools like Brown some of the time
But Brown and Darling are fools all of the time
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AAAccountancy is predicated on inkcompetence of keeping Dorian Gray V training FRAMED AND OFF BALANCE SHEET until the brown stuff[derivelatives] hits the fans of 'things can only get bet err'
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Can we please have an election NOW to see if the nation backs what Gordon and his gang are doing or not?
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The real appropriate saying is that the malignant narcissists, chronic scapegoaters, uncorrectable grab baggers, greed creed, uncouth shysters and second best to child molester politicians for their self interests, self righteousness, inequality, rights only of their kind, have managed to create a very unhappy, indecent, rotten to core, selfish society that preys on itself and sacrifice others with coercion, reckless abandon and impunity to promote its outward / hypocrite self image of good. The evil SOBs are destroying everything from within at a fast track. Of course its cynical!
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39. At 1:00pm on 20 Mar 2009, tufftimes
"Who knows, he may even get back in."
HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA!!!!!!!!!!!!!!!
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I really don't know why people even bother.
I only have to look at the man (Brown) and his cronie ministers on TV and I feel depressed.
We have a political party in power who simply will not accept when they are wrong.
They have manipulated the media bandwagon using people within the media such as reporters at the BBC to spew out pro Labour policy which the majority of it has turned into disaster after disaster.
The only thing we, the electorate can do is throw out as many Labour MP's as possible at the ballet box in 2010.
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70
Ian the chopper link
The GB quote may have been crossed or out of context, but how on earth could discontinuing 125% mortgages have caused the collapse of NR? Surely such discontinuance could only strengthen their situation as less money would be lent and thus wholesale borrowing reduced.
We live in a world of newspeak doublespeak and pipsqueak.
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Apparently there was either save Northern Rock or the alternative was let it go Bust according to Crash Gordon today............
.... save it and run it properly wasn’t in there then?
The spin is starting to make me very dizzy.....
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77 andfinally
The letter has surfaced.
Dear Chairman,
You know and I know that this bubble is due to burst.
Do me a favour and hang on in there for a few more months. I have decided to hand power to my Chancellor and I need a head start to be well out of the way when all the chickens come home to roost.
As you will know through the old boys network, I have a couple of sinecures lined up and your new title will be in the post as soon as I am gone.
Yours in a rush
Prime Minister
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If man buys a house with his wage. And then he needs to include his wife's wage. And then his overtime. And then her overtime. And then they need a bigger deposit from his parents. And then a deposit from her parents. And then the deposit is too big so he has to borrow 125% of the value. And then the couple need to find a lodger. And then three friends have to club together. And then four. And then five. And those five people expect house prices too raise enough for them to sell and each buy their own house. That is an out-of-control bubble that Gordon Brown based our entire economy on over the last decade - and all the infrastructure put in place, bought by an endless supply of money, has to be maintained. With less income and a bigger debt.
If nobody in charge could see the house price crash coming then they should resign.
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Actually, if the Titanic had run straight into the iceberg it would probably have survived. It was trying to avoid it too late that proved fatal.
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Post 77 andfinally---- Agree absolutely.
It doesn't much matter when people on here apply sloppy logic or understanding to things in a quickly drafted blog... it does matter when it's the government.
YES---- it's a global problem
YES---- its not just us
YES -----Our Government did things that were just plain wrong
YES---- Our government has made a bad situation worse by bungled responses
YES---- Our Govt let the 'boom' grow beyond all other Govts (except Spain and the USA)
YES---The lack of attention to detail in handling events from Northern Rock to Goodwin's pension is borderline idiocy
YES-- The govt has made a bad situation worse and a worse situation now catastrophic.
The anger over the ludicrous over rewarding for people involved in causing an economic disaster isn't a vindictive, backward looking sideshow ....it's 'the whole 'point.
The continuing grotesque misamangement that the attitude of 'can't do anything about these payments' symbolises what is at the heart of the more serious faoul-ups.
Why didn't the Govt do what a whole spate of 'good news! Business rescued' ordinary Business people did around Christmas...who 'pre-packed' their failed businesses to get rid of a) creditors, b) underperforming stores or units, c) the staff in them..and d) all previous contractual obligations...
Probably because the Political elite (How many Lords are their in the Labour Govt now?..There must be more than in the Govt of Louis the XIV??) and the Business elite are so closely interconnected that they scruple about doing it---though they're happy enough to wave them through as 'companies saved' everywhere else.
Lord Myners could have pre-packed the banks and renegotiated the contracts down to pension pot POUNDS 00.00p and Bonus 07-08 £00.00p--- because that is what the company would have paid had the rest of us not handed our money over.
That's why people are angry... not because some acts of God have stricken the country but because a ruling class continues to make abject decisions, partly because they simply do not realise the world HAS changed----this economic dislocation that is ABOUT to hit, is as change forming as the First World War was to our society---and for the same reason.... that the demands of the hour are serving to throw into sharp relief the deficiencies of the old regime----
Oh Hum! Glad I got that off my chest .... again!!
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#39
I agree with the sentiments you express. However, you seem to have missed the stance Brown has: he is expecting this crisis to come right while he is still in power and that he is right in what he has done so far. The decent thing to him is to carry on digging the same hole deeper and that someone else in power would certainly do the wrong thing - that someone else might have a better solution does not, I think, ever occur to Brown.
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There is, understandably, a lot of criticism on here about GB and AD, amongst others.
What worries me, isn't that they don't apologise about their mistakes, but more that they don't perceive it to be necessary. Some people have suggested this is due to arrogance on their part. I fear it's more a matter of irrelevance and scale of issue.
By that, I mean, what if - contrary to the noises being made in public and via press releases by them, BOE, Treasury, FSA and others - they know that the crisis is much worse and is going to continue for much longer than they any politian would dare to admit? Add to that the improbability of there ever being global consensus on any worthwhile way forward. Add to that, even if the consensus comes, it might come too late for many.
Compared to that (and the potential for people not to be very happy about that) then, perhaps, all the other demands to explain this action/inaction or apologise for that failing, just shrink into insignificance.
Even if they did explain or apologise or whatever, what difference would it make to what's now going to pan out?
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If one assumes a 125% mortgage and a 25% drop in value then it will take approximately 8 years before the value gets back to the loan level assuming a standard 25 year term and, a big if this, prices increase at 5% pa from the low immediately.
What price coming out of recession this year for these borrowers?
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85 Econoce
National statistics totally fiddled and irrevocably spun – Gordon Brown - government
Private pensions robbed – Gordon Brown - government
Public spending totally out of control – Gordon Brown - government
Immigration totally out of control – Gordon Brown - government
Crime and anti social behaviour totally out of control – Gordon Brown - government
Housing bubble burst - Gordon Brown - government
Fat cats escaping with fat pay offs - Gordon Brown - government
Perhaps there is a link?
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#59
The Conservatives asked to be kicked out in 1997. The spectacle of their bloodbath of backstabbing was truly nauseating to conservative voters I am sure. I doubt that any of the Conservatives involved in the suicidal gesturings considered how damaging their actions were at that time. After the intervening years and the Brown legacy for the future years the Conservatives are only just becoming a credible opposition once again. I fear that Labour will still be seen as a possible government at the next election if the Conservative show remains weak, and that really will be disastrous. Labour need throwing out root and branch for the waste of public resources and their lack of judgement during this government. Vote Brown back in and he really will think he's god.
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Is anyone surprised at the French protectionist action by Renault? Does anyone doubt what will happen next?
- The French will delay and procrastinate whilst making their report to the EU
- The EU will eventually tell them off and might actually levy a fine
- The French will appeal
- The saga will continue for over 5 years during which nothing else happens
- The French will have achieved what they want
- The Slovenians will have lost
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Hang on a minute. I thought all this was the fault of Margaret Thatcher? Instead, it seems that "Prudence No-More-Boom-And-Bust Brown" has been to blame all along. Shock horror!
So, we now know that Brown crafted the UK economy on the basis of uncontrolled personal, public and commercial debt, manipulation of inflation statistics (he stripped out house price inflation), the imposition of taxes by deceit ("stealth taxes"), uncontrolled public sector spending and uncontrolled immigration all wrapped up in the grotesque use of "spin" (propoganda). You couldn't make it up.
My guess is that the British people are now fast rumbling Gordon Brown and his days are surely numbered? What a shocking politician he has turned out to be, and the antithesis of a statesman. Political history will justly drive a stake through his heart, so to speak.
Brown has conceived, designed and hammered home the mother of all economic and social disasters for this (once) great nation and I, for one, will never forgive him. The tragedy is that we're letting Brown stay at the helm for another year; are we all stark staring mad for allowing him continue to do this to us? Shouldn't we be on the streets like the French?
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Here's my prediction.
Brown is still under the delusion that he can win the election by flooding the nation with cash. He will signal to Darling that he wants Public Spending to increase in the Budget. Darling has already tried to distance himself from being a cause of the disaster, but this will be the last straw and he will resign.
Brown will survive only if Balls steps in as the new Chancellor. If Balls fails him then its only time till he is forced out. Balls will probably demand a free run at PM for his support, if given.
Brown cannot escape. The Truth will out.
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There is a strange tone adopted in this latest offering.
There is a naivete in assuming that businesses do not make profits because of recklessness, impropriety, stupidity etc.....as a small business owner and as any businessman will tell you the margin between glory and disaster is actually quite small....even good businesses get caught short by the change of economic tide.
Northern Rock made great profits...what nearly killed it off was cashflow (and the media inspired panic and queing )and the change in availability of wholesale funding.
What is now clear is that what was needed and is still needed is a 100% unlimited guarantee on each and every British bank and building society deposit.
If that had been made in time there would not have been the mass exodus out of UK funds.
There is still time for the government to do this and I believe there will be an announcement to this effect soon.
Quite simply the taps in the wholesale marketsgot turned off and there was no other supply of money.
YES THERE HAS BEEN A HOUSING MARKET PRICE CORRECTION, BUT WHAT WE HAVE NOT SEEN HAS BEEN THE MASSIVE CRASH IN PRICES SEEN IN THE NINETIES.
The fact that the scarcity of money has not resulted in massive interest rate rises is a triumph that the BOE and HMGshould be rightly proud of.
And fact that Northern Rock has paid off most of its loans from HMG shows that those in charge of Northern Rock have done really well to turn this situation around.
So good on Northern Rock, and good on Gordon Brown for avoiding the sort of disater that we had under the Tories ......millions of Britons are now looking forward to the economic situation improving again and for that we have to give thanks.
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Anyone reading this needs to start back in 2007 and the Peston blog "Rock or crock".
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2007/09/rock_or_crock.html
It starts "The good news is that the Chancellor, the Financial Services Authority and the Bank of England don't believe Northern Rock is an unviable business.
If they thought the Rock – or Northern Crock as it’s been dubbed in the markets – was an intrinsically bad bank, they would not have agreed to rescue it by providing emergency funding"
Such the was unambiguous implication of the Bank Governor’s statement to the Treasury Select Committee on Wednesday on the circumstances in which the Bank is prepared to act as lender of last resort to a troubled institution."
Follow on the blogs in the archive. They are a good history of the saga and show how totally out of its depth this bunch of incompetents really are.
They are not fit to do govern and should resign. Like the labour Government's view of that other great "incompetent" they should leave without a pension. Go forth as Prescott keeps telling us; but I don't mean a fourth term.
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Once again G.B's instant reaction is "not me guv" --until he and his fellow incompetents can come out of their ivory towers and accept that ,just maybe, they were, and are continuing to be, responsible for the mismanagement of our economy then we are not going to see any change for the better. Their head in the sand mentality will lose them the next election but we are apparently going to have to suffer until then as nothing, but nothing, seems to convince G.B that he is less than perfect.
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#9
Savers are the enemy of economic growth; if you don't spend you pay less tax and then where would the spending aspirations of successive governments be?
if you are still unemployed after 6 months you lose your JSA if you have more than 16000 GBP (PEANUTS), so spend spend spend and mount up your debts and the government will make sure you are ok.
if you are still unemployed after 6 months and your partner works more than 24 hours you lose you JSA....
My partner is on minimum wage and does 25 hours for a charity...
Next door's partner is a doctor and does 22 hours at 45 GBP per hour so they get JSA
No wonder they couldn't see the crash a-coming. Social justice - hah!
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Post 96. I haven't been very clear. I must remember to count to 10 before pontificating.
The point I was trying to make is that Crash still believes he did the right thing and won't accept any responsibility for what went wrong when he
1) set up the FSA and its light touch regulation.
2) Was chancellor during the unnatural boom.
3) has been PM during this whole farago.
Discontinuing 125% mortgages may not have saved NR but it wopuld have stopped it getting even deeper into the more.
If the figures shown earlier are correct 33% of NR's outstanding mortgage book is in negative equity and another 7% is within 5% of being so.
Many people said that the plan to encourage people to move away from NR would encourage the good risks to leave and leave NR with the poor stuff no one else wants or where people cannot remortgage. They have been proved right.
The first few months post the collapse were crucial for Northern Rock but Crash and Alistair dithered hoping against hope that they could offload the Wreck onto someone else. To use an analogy they fiddled while the NR mortgage book burned.
We will all end up paying for this and it won't be pretty. However by the time the full extent of this disaster comes home to roost both Crash and Alistair will be long gone.
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#18 "Now if I went around talking of crocks of gold at the end of the rainbow, ancient treasure in barrows guarded by dragons, golden rings of magical power and the wealth of the King of the Leprachauns I would be treated at best as mildy eccentric and at worst subject for sectioning under the Mental Health Act."
No, mate !! If you put all that in story-form, you could be as rich or richer than J K Rowlings !!
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It's a common sense
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#10 and 55 have it right.
The mess was created by the Government's deceitful and foolish assessment of inflation rates- i.e ignoring house price inflation. This meant the housing boom went completely under the economic radar, even though we all knew it was happening, and the greedy banks encouraged us to borrow more so they could make more profit, and the treasury coffers mounted with stamp duty.
We have all been foolish enough to go along with the charade and not question the sense of leaving the biggest single outgoing for families from inflationary figures. Get a grip BoE, MP, GB, AD, FSA and include these figures now before more damage is done by fudging the figures to make things look good. Let us see the real picture, and base your decisions on fact, not myth.
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7# Furrycushion
When they walk away from the house they will be taking the debt with them and will be liable for the shortfall, if any, after a foreclosure sale.
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Moderator I am not a new member.
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"Rock response was right, says PM"
He's always right, isn't he? Smart-arse.
It must be difficult being right all the time, especially when everyone else seems to be getting it so wrong. Poor Gordon.
When all this is over by the end of the summer we'll be glad he was here to guide us through this and make us the best-placed country to weather the global recession. Mark my words.
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#94simmobb2
Don't laugh too soon.
In my neck of the woods there's a saying that goes -
"There's nowt as queer as folk"
We wouldn't give him another chance - would we???????
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When will people wake up and see this crisis has been engineered to help facilitate a single world government and a single world currency? It's not rocket science - the consequences of the collapse of such a huge credit bubble were predictable and preventable. Nobody except the ignorant public at large (who are more interested in being entertained than educated), could possibly have failed to see what was happening. The likes of the BBC should be ashamed of their role in helping to conceal what has been taking place by not reporting the true state of our economic situation.
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We have been blogging about the crash for six or seven months now. Perhaps it is now time to start talking about the desperately needed repair.
As I see it nothing will be of effective use until some semblance of confidence is restored to the banking system. Who ever again will feel confident about a bank called Royal Bank of Scotland, or Northern Rock? What we need is a couple of brand new commercial banks. They would require almost no regulation for several years yet - they would not be granting home mortgage loans, believe me. We need some new building societies, properly funded, so that there is someone out there to do the mortgage lending. Both of these types of institution could be expected to attract share capital. We would not need any new investment banks, for who would fund them in any manner whatever?
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Yes, even I knew it. As for Messrs Brown,Darling and their ostrich mates the one good thing about their determined head in sand position is that it provides a splendid target for any well aimed, well deserved, boot.
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#103 "Even if they did explain or apologise or whatever, what difference would it make to what's now going to pan out?"
Well, if they cannot admit their mistake, how can the world at large trust them not to dig themselves deeper into the mire ?? Without international trust, the British economy stands *NO* chance of ever recovering !! Like the boy who cried "wolf", whatever they say at the upcoming G20 meting will be taken in light of their failure to see wrong from right and will be discounted accordingly !!
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While the consensus here appears to be Brown out, there are enough postings from die hard Nulabbers to show you can fool some of the people all of the time. The fear must be that with the rigged parliamentary situation that Bliar was going to fix but did"t GB might get a hung parliament and a further opportunity to achieve his prime objective:
the demolition of the English middle classes and the creation of a socialist state that controls all aspects of its citizens lives.
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We need to ask whether any of the previous warnings made to Gordon Brown whilst Chancellor, where reported to his 'Boss'. It is hard to believe that Mr Blair didn't know anything at all about the risks Messr Brown & Balls were taking with our finances.
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115
Mr Harris aka chopper
I agree with your assessment.
The other piece of spin that comes out is the
"repayment" of 16Bn. That is the best risk borrowers who have headed for the exits, leaving the dross for us as taxpayers.
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#110 "The fact that the scarcity of money has not resulted in massive interest rate rises is a triumph that the BOE and HMGshould be rightly proud of."
Actually it is a triumph of hope over reality !! By quantitatively easing the economy, Crash Gordon hopes to flood the economy with *funny money* and "ease" the liquidity problem. Soon there will be lots of trillionaires in Britain just like those in Zimbabwe !! What they can do with those trillions is quite another question entirely !!
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Robert,
You have a few folks on your Blog who have seen the answer to our problem:Invest in Manufacturing and Commerce here in the UK. We will see the benefits after perhaps two years,giving Money to Banks to play with will end in them losing the money and the Nations Seed Corn gone .We will end up like Austria after WW1 and never recover.There is no Silver Bullet we need to earn real money.
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#110 onward-ho
"Northern Rock made great profits" Did it though? Given the subsequent losses, and those still to come, it just borrowed the money from the future to be paid for by the taxpayer and by repossessions. Guaranteeing depositors would not have saved the Rock, there weren't enough of them to fund the lending. The wholesale funding strategy was always crazy, as was the lack of a plan to deal with the end of the housing boom, or a lower pound. The media only cottoned on to the story about a year after the shorting started. I'm not in favour of shorting, but it does often act as the canary in the cage.
YES THERE HAS BEEN A HOUSING MARKET PRICE CORRECTION, BUT WHAT WE HAVE NOT SEEN HAS BEEN THE MASSIVE CRASH IN PRICES SEEN IN THE NINETIES. That remains to be seen. There is very little buying or selling at the moment. I think prices have much further to fall, and will never recover in real terms. Then those who have retired and downsized during the last few years will be the winners. Those dispossessed and with negative equity will be the losers. Yet again, a housing boom will have been a mechanism for transferring money from the poor to the rich.
As for Brown, I think he needs to go as soon as possible - because of the precautionary principle. He can't be trusted to be objective when he has so much face to lose - and he's certainly no indispensable intellectual giant either. The Labour Party should have the guts to ditch him. I have few hopes of Cameron either; I think he's too wedded to the financial and market orthodoxy which makes boom and bust a regular feature of economic life. The first thing he should do is ditch George Osborne, who is absolutely tainted by his links to the hedge funds. Let's have an election, a hung parliament, and Vince Cable for chancellor.
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119 tripery
Not if they declare themselves bankrupt. It no longer has the stigma it once had.
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Cameron!!!
Your country needs you!!!!
Middle class labour has usurped working class labour because they thought the working class was too stupid to understand human nature.
We need some real hard nuts to sort things out now......this country has been totally and utterly devastated by the labour luvvies and their wide eyed adoration of the investment bankers and the neo-colonialist americans. And their scorn for the white working class.
Time for the Brits to take a lead on the world stage (Obama is certainly not going to).......to me it is an admission of an unforgivable intellectual and moral failure to say "...all the other countries mucked up too...."
We should forget about global solutions until we have put our own house in order.
1. New government
2. Kill off the FSA
3. Invalidate all CDS contracts....
4. Put the fincancial crooks in jail
5. Sack 25% of public sector workers
6. Withdraw support for public sector pensions and PFI
Come on Cameron...you have your man on the ropes..Now kill him off!!!
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Gordon Prudence Brown strikes again?
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It looks as though we are heading for the usual evening pattern, of several hours' moderation delay.
Auntie Beeb really does treat us like children - but then goes out to the pub and neglects us it seems! Is there a bloggers equivalent of childline?
Time we had post-moderation, with the caveat that people are responsible for their own libels. Did you all know there's a profanity filter too? I found out when I wanted to call a respected banker by a very mildly insulting adjective, suugesting permanently impaired mental processes. Spelled quite similarly to the element with atomic number 5 and symbol B.
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123 Beaker
Funnily enough if there was only one currency with only one issuer, unforgeable and immutable, comparative spending power, cost of living, goods and services etc etc would be totally transparent.
Like communism great in theory rubbish in practice.
Why?
Because all are equal but some are more equal than others.
The beaker folk had it pretty good.
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Yes we did Robert. Or at least everyone who has been following things reasonably closely..
However not everyone does and as we have a Prime Minister who seems to be in denial of his own role in what happened it is helpful I think for these sort of reports to emerge.It certainly sheds light on his efforts to create ever grander and more expensive schemes to get us out of this mess claiming he has a vision for the future doesn't it? It shows that when he was chancellor he did not have a grand vision at all.... Road to Damascus anyone or just an increasingly desparate man?
Giving out 125% mortgages once we owned Northern Rock was silly. Now they want to stop 100% mortgages we hear. Let's say they do this and cap loan to values what are the people on 125% mortgages which Alistair Darling did not stop supposed to do when they remortgage?Will our government give them a 125% mortgage then later tell them they cannot have more than 100%? Has no-one in power thought of this? I have to question if they think at all, I hope they do but the evidence is worrying.....
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brownwatch 437 days.
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#39 god help us if brown gets in again,i be the first in line to clear off.anybody would be better than brown even harriet harperson or the tories or even..the bnp. just anybody!!!!!
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Beaker75UK @123 makes a good point but I don't think the financial crisis was engineered to make way for a global government and a global currency.
The institutions were set up after the second world war and are in place now. What is required is the political will and courage to make them truly above all national governments. This would mean the five permanent members of the Security Council giving up their veto powers.
The United Nations, The World Bank and the IMF could all be overhauled so that all constituents of the UN are represented fairly.
It makes sense for global trade to take place in a global currency.
Each country or region of countries (Euro) could retain their local currency for domestic trade.
International trade would tend to narrow the differences in the cost of labour, land and capital.
Co-ordinated reform of taxation would make it more difficult for companies and wealthy individuals to hide their money in tax havens.
It may be a pipe dream - but I hope the upcoming G20 meeting is considering radical reform.
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Last post published 6.29 pm. What does a moderator do in nearly two hours?
#37 says middle tier civil servants will be sacrificed. Very likely.
But one other class is going already namely the specialist IT consultant. Make ready for the government system to dim when salaried civil servants are the only ones left to man the ship. The civil service brought in a huge number of ordinary IT contractors because the basic bureaucracy lacks expertise in depth to cope with being swamped by the elected politicians attempting micro-management Expect a doo-doo of a whoopsie after the G20 meeting ends in disagreement.
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We saved the banks / world, whats the problem we are saved by our glorious leader.
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Like I said we are saved!!!
http://news.sky.com/skynews/Home/Business/Economy-Worst-Of-UK-Recession-May-Be-Over-Said-Bank-Of-England-Chief-Economist-Spencer-Dale/Article/200903315245835?lpos=Business_First_Buisness_Article_Teaser_Region_5&lid=ARTICLE_15245835_Economy%3A_Worst_Of_UK_Recession_May_Be_Over_Said_Bank_Of_England_Chief_Economist_Spencer_Dale
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Ace Economist Gordon Brown!
I for one want no part in your pathetic stalinist approach to social engineering Gordon, history will remember you accordinly.
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What worries me about this post and the mood that pervades the board is that there are not adequate feedback systems functioning in the face of policy errors. The view that the government has not managed the system or even crisis managed effectively once the system that it has designed and stood by was collapsing around it is a generally accepted one. What is concerning is that even in the face of the views of officially mandated reports, public and journalistic opinion that all share this view that there is still a stubborn rebuttal by a government that appears not only incompetent, but monumentally obstinate also.
Let us leave aside the concerns that we should all have for future policy decisions made by a government that sees itself as by definition in the right. Rather let's ask what is the point of officially mandated reports, enquiries etc, when all they do is increase expenditure and public frustration if they are simply rebutted by policy makers. Because it seems that the only purpose that these reviews have is to mandate and back up the positions of policy makers. This is not particularly robust.
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110 Onward-ho
Either you're the biggest wind-up merchant or you've been smoking the same substance as No 10 and also a Guardian reader. Your comments are absolute garbage. Filth in fact.
Most contributors on this blog are intelligent enough to get it. You insult theirs and mine with it. Please do some learning and thinking before engaging your keyboard.
Brown = Nero = Canute = incompetence = catastrophe.
The evidence is overwhelming. Get out more and take that chip off your shoulder. If the BBC could also lose theirs we might have some decent news that gets aired. There's an awful lot of rope for hanging with.
I still can't reconcile how 30+% still want to vote this person in. They must all be on benefits (or heads of quangos).........
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136 sasha
Yes
I once posted SOB it was deleted. Then later on another persons post accepted. They allow SNAFU, FUBAR and other similar yet turn away !"£$%^&
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#110 onward-ho:
"Northern Rock made great profits...what nearly killed it off was cashflow (and the media inspired panic and queing )and the change in availability of wholesale funding.
What is now clear is that what was needed and is still needed is a 100% unlimited guarantee on each and every British bank and building society deposit.
The fact that the scarcity of money has not resulted in massive interest rate rises is a triumph that the BOE and HMG should be rightly proud of.
So good on Northern Rock, and good on Gordon Brown for avoiding the sort of disaster that we had under the Tories ......millions of Britons are now looking forward to the economic situation improving again and for that we have to give thanks."
+++++++++++++
If Northern Rock made so much money, where is it? Wholesale funding: Gone.
100% unconditional guarantee for banks? You are too free with my/our money!
As I recall the Tories did so well that New Labour hardly changed anything when they first got in.
Yes, we are all looking for the economic situation to improve. Quite when it will do so is another matter.
I do not think the Tories have a plan but a previous blogger suggested some ideas for them to start with.
Gordo has indeed 'avoided the sort of disaster we had under the Tories'.
This is in a Premier League of surpassing anything previous.
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#126 ishkander
I'm not suggesting that they are "on their own" in this, if indeed they are in this situation. But who's to say that everyone else around the G20 table isn't in exactly the same situation. That is, they're much like the rabbit caught in the headlights.
So, it won't cause any international lack of trust, because the other world leaders are all in the same boat.
In fact, perhaps, just perhaps, everyone's economies, UK, US, German, France or whoever, have "NO chance of ever recovering", as you put it. And perhaps, if we were Presidents, or Prime Ministers, or Chancellors we would know that.
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145
If they are right, does anyone know a good sauce for Hat?
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Ho HUM HA HA ??
TOO MANY PEOPLE WITHOUT A CLUE AT THE TOP!
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apertaining to nothing and everything...
extract (paraphrased) from... AD33 by Colin Duriez... pages 64...
..in AD33, Rome was in a financial crisis, a currency shortage (lack of liquidity?) as a result of rules established by Julius Caesar 10 years earlier not being enforced. Contracts, loans etc had got out of hand (excessive and complex...?) and the then caesar, Tiberius gave them 18 months to get back to the rules... The resulting chaos, defaulting contracts, calling in of loans... created a 'shortage of currency'.
Tiberius (the clever chancellor and boss of the bank) gave 100 million sesterces to the publc treasury with the provision that should be lent out by the senators without interest to 'such as asked for it'....
The book is not explicit as to if it worked but it would to seem it did. Tiberius survived, Rome prospered but there was much blood following the political upheavals that followed.
Does this sound familiar? Does this inspire confidence?
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WHO WILL SAVE US FROM THIS BUNCH OF DELUDED LOONS??
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Britain's situation was very easy to see -- from abroad. Balance of payments in the red year in year out. High household indebtness fuelling consumption and housing. Unbalances getting worse each year. North Sea oil production (the real saviour in the preceding economic crisis) falling.
How else could it end?
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Quite right, Robert.
But what really annoyed me today was reading Gordon Brown's comments that "nationalisation was the better option and the alternative was to allow it [Northern Rock] to go into receivership". Disingenuous at best. There was clearly a third option - a government-supported rescue by a private sector bank. Regardless of which option was better, Gordon's view that there was no other option is clearly false.
What they actually did, in case everyone has forgotten, was dither for months while the Rock struggled, and then panic and nationalise when depositors lost confidence in the bank. And even now, they haven't got the decency to apologise for their mishandling of the affair.
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Did anyone pack Peston's report on News at Ten just now? Pure editorialising rather than actual reporting which we might naively expect from a news organisation - he even referred to the PM as "this chap". Why are we paying this lightweight from our license fee?
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#155 AC
I thought it was going to be YOU!
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Someone commentng had the temeroty to say that if Gordo called an election he might win! Only if he adopts Robert Mugabe's tactics.
The man is a blithering idiot when it comes to economics, business and the real world.
He should have gone straight to writing political biographies when he graduated rather than destroy the United Kingdom of Great Britain and Nothern Ireland by his comic ineptitude, subtergfuge, fraud and general malfaceance, whilst both Chancellor of the Exchequer and Prime Minister.
John Smith must be turning in his grave.
Tony Blair has no excuses either, he was PM whilst Gordon was CofE, so as Barrack Hussein Obama says, "the buck stops here", obviously an American saying, becuase neither of the aforesaid weasels will step up to the plate and carry the buck for their mistakes.
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Gordon Brown says the price of alcohol should not be raised to a minimum of 50p per unit, he knows this will be the only luxury the average U.K citizen might, be able to afford for the next twenty years.
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#141 rvpisneverinjureds
Whilst supporting your general thrust I could not agree with the idea of the BNP.
I live in a community with about 12% ethnic monitority population. Predominantly Asians of original Punjabi background. We manage to co-exist very well along side each other although there is a minimal degree of social inter-action.
They do their thing and we do ours - but it is a form of cohesion.
Introduce the BNP into the equation and you have a recipe for social disaster. I think racist thugs would be an inappropriate description for most of them.
Maybe we are reaching the point where we have to give the LibDems a chance as a minority balancing party in a hung parliament.
Mr Cable talks a good game but time would tell if he could actually deliver.
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Has anyone seen or heard of the following recently?
Supercalmdown? I miss his constant argument for increasing public sector wages whatever the blog is about.
Where has Mr Curzon gone?
Has Derek Barker been re-educated?
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There is debate about the need for and consequences of a "fiscal stimulus". Some of this debate is ideological, some is practical.
So, we need to find out the answers to some questions.
(1) How much spendable money is in the economy? Compare it with a year/two years ago.
(2) How much of this is actually being spent per month? This is the "velocity" problem.
(3) How much net is going abroad? If more money were being spent, how would this affect the deficit?
(4) Some people cannot provide for their own needs because of a lack of demand for what they produce. Would a "fiscal stimulus" help them, or would more money just go abroad?
(5) Does it really make sense to encourage consumption of (home produced) useless tat, just so that some people can provide for their basic needs. Shouldn't we just give them money to live instead without having wasteful production of rubbish?
(6) Repeat the above question, but relate it to the public sector. In place of "useless tat" read ID cards, "street football coordinators" and all the other non-jobs.
(7) If it is within the productive capacity of the economy to absorb, does it matter if you print money in bad times, but tax and destroy it in good times?
(8) What can we produce to exchange with the rest of the world for those things we have no choice but to import? Can we do a bit better than just necessities?
These are the questions I ask myself. No doubt I've missed something. Or should we be asking different questions completely? Most politicians don't seem to have a clue. Could we amateurs do better?
PS - I wonder what proportion of Sir Shred's pension will contribute to the balance of payments deficit, compared with a typical pensioner?
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Where o where are the dissenting voices of New Labour?
They must realise that they are facing political oblivion unless they act, and act quickly, against this buffoon of a PM.
Have the back-benchers all passed away and it has not been reported?
#140 rvpisneverinjureds
Wind up your stop watch - its running far too slow (I hope).
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Re my 162
Major TYPO
I meant appropriate
Apologies to all
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Au contraire...
Actually, I think it's all going rather well.
The inevitable trade protectionism - following the recent lead of France - will stiffen nationalist tendencies and hopefully lead to the breakup of the EU. It will certainly end for ever the ghastly prospect of Turkey joining.
With any luck, we can cut loose from Scotland, Wales and Northern Ireland, too. This will ensure - among a legion of other blessings - the extinction of any future Labour political prospects, and probably the end of the hilariously incompetent and corrupt Labour party.
The unions will have their necks wrung, and a bracing Darwinism will sweep away whole chunks of obsolete industries. Massive unemployment will force a belated solution to the immigration madness, and engender a health spirit of self-interest.
Closer trade links will develop between ourselves (I mean, of course, the English) and America, Canada, Australia and New Zealand. This will provide a secure base for the onward march of Anglo-Saxon world hegemony.
Thanks, Gordon. Excellent work. Keep it up.
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I predict that Manchester United will win the 2007/8 Premier league
I pretict that Barak Obama will become US President
I predict that sometime in the last 20 years inflation will be higher than it is now.
The Government, Treasury and FSA, nearly all political and economic commentators believed what was the overwhelming consensus in 2007 that we wouldn't have a recession, house prices may decline, but not by much and that the world economy would remain strong. They were wrong to think that. The Tories and the Lib Dems (including Vince Cable) called for less regulation - they were wrong about that and the government was wrong not to strengthen regulation. The Socialist Worker Party has constantly predicted over the past 40 years that Capitalism will be in crisis. Every 15 years or so they are right in their prediction; it doesn't mean they are right in their analysis.
There was a world wide bubble and most did not predict correctly when it would burst or indeed recognise that it was a bubble.
The National Audit Office produce useful reports when their findings are useful for the future. I'm really not sure this is the case with Northern Rock; given the consensus that existed at the time I suspect what happened would more or less have happened whatever political party had been in power - the Lib Dems wanted to nationalise Northern Rock earlier, the Tories probably later, but we'd have ended up more or less in the same place.
The real issue is where we go from here and which political party has the best solutions. Labour, who I support, will need to convince the electorate that despite the problems, they can deliver in the future. The Tories seem to me to be too relient on the electorate blaming Labour and don't have seem to have any convincing alternative to what the Labour government is doing, while the Lib Dems have some gaping holes in their programme including wanting to join the Euro.
The economic situation is to put it mildly, very difficult. E Europe and the major net exporting countries are very badly affected - just look at what is happening in Japan and Germany. Monetary policy has been loosened and fiscal stimulus underway. These actions will hopefully be enough to turn the world economy round, at which time the US and the UK economies will need rebalancing with greater savings and interest rates will need to rise to encourage saving and to reduce inflationery pressures. Getting the balance right will be difficult - if we get it wrong then inflation, a public funding crisis and a full blown sterling crisis are likely. Get it wrong the other way and the recession will be prolonged and much deeper than it needs to be.
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So, remind me again, my friends in the UK...
Why is it that Brown has not done the minimal honorable thing by resigning and retiring from the public stage for a season? Didn't Churchill do that after a disastrous episode earlier in his career?
Why is it you and yours never get to have an election to allow some different talent to address your situation?
Really, I don't understand your system, no irony intended.
I would love to have someone clearly explain why you can't have an election and debate these matters in the public square, with the ability to let people decide who leads your wonderful country in the future.
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#163Economicallyliterate
AC is alive and well at #153 and #155
CAPITALS TO THE FORE AS EVER.
I suspect supercalmdown had finally calmed down.
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Yes, they made a mess of it. They should have seen it coming. But it seems that goes for just about every other country and financial institution.
We need to ask ourselves this. If they had regulated more sensibly and regulated to prevent this, would the banks, shareholders, and the media -yes, you yourself - have decried them for being luddites, for threatening the City's position in the financial system by holding it back? Would the very same people who are blaming them now have voted them out for it?
I think so. We are all wise after the event.
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The reporting of the appointment of Tidjane Thiam to the head of the PRU as the first black leader of a FTSE company is little short of racist.
Shame on the BBC.
What relevance on this earth, or fullers earth, can the colour of his skin be?
I thought we had left that kind of thinking back in the 1970's
Had he been a woman he may have blushed - but then the WHITE DOMINATED BBC would not have noticed.
Congratulations and good luck to Mr Thiam, and keep a watchful eye on my endowment policy
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Robert:
I think we already knew that, didn't we?
I think that in most economists "eyes" and some of the average citizens (and)....the Government regulators had a feeling about this problem...
~Dennis Junior~
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#138 "Road to Damascus anyone or just an increasingly desparate man?"
Please remember that there were 2(TWO) beings on that road to Damascus !! There was St. Paul and there was his ASS !! Since Crash Gordon is certainly no St. Paul.......
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#142 "International trade would tend to narrow the differences in the cost of labour, land and capital."
I'd surely like to see how Brits live on the same pay as Bangladeshis doing the same job in Bangladesh !! Might be a GOOD THING since that will reduce the epidemic of obesity here !!
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"124. At 5:34pm on 20 Mar 2009, KenHarvey wrote:
We have been blogging about the crash for six or seven months now. Perhaps it is now time to start talking about the desperately needed repair."
KenHarvey,
Whenever you do start talking about the desperately needed repair .... you discover that the repairs are thought not worthy of sharing for whatever reason, .... "# 139. At 7:35pm on 20 Mar 2009, amanfromMars
This comment has been referred to the moderators. Explain." .... which I would really love to share with one and all here, should I ever receive an explanation for the witholding censorship of the post still being considered in moderation.
BBC, Please Print and let us discuss the issues raised to iron out any wrinkles in the New Paradigm. Thank You. Mr Mandelson is surely man enough to take it in his stride and Mr Brown deserves his dessert too, should any perverse and completely erroneous consideration of destructive private personalised attacks rather than open constructive public debates be at issue here, and causing you quite unnecessary, unfounded concerns. And I do believe that all sound and legal advice will Support that it is my Inalienable Right and Privilege, and the BBC's Avowed Obligation under Royal Charter and Agreement, that we Respectfully Insist and Concur that it so be done.
Given the printed personalised bile directly at public figures in posts here that we can freely read, which are easily considered as far more offensive and pointed than anything which I might care to express and share, it may very well be that the above straw man excuse for post non-appearance would itself be a red herring to avoid the Sharing of its Contents/Knowledge/Intelligence/Information, simply because of the Naked Truth exposed ........ and to Deliberately Hide away the Truth is to be a Willing Party to a Global Conspiracy of Deceit, both National, International and InterNetional, is it not?
And that would not be anywhere near close to being true to Nation Shall Speak Peace Unto Nation with Information, Education and Entertainment, surely?
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Morning Robert,
still churning out the same old re-heated leftovers I see.
Perhaps you need another holiday?
Any report about Northern Rock is a waste of taxpayers money (and that is the real story here).
"The Government has accepted that public bodies were responsible for maladministration that caused injustice, but, at the same time , argues that it is under no duty to put right these wrongs" quote from Peter Riddell column,The Times, Mar 19 2009. Doesn't that about sum up this Government?
I detest this Government and all that it stands for but sadly, I cannot see much difference being made by electing the Opposition. Didn't the Opposition vote with the Government on the nationalisation of Northern Rock?
Don't forget that it is the SAME civil service that advises whichever Goverment is in power...and therein lies the rub.
I think we expect too much of our MPs (although mine is an ex banker) to understand and deal with these problems. At the end of the day they are just ordinary people who have chosen politics as a career, who have no experience (mostly) of working for a living in industry or commerce, who have never experienced war or hunger or deprivation.
We have a Government who are keen to decrease the number of days that Parliament sits because they don't then have to account to Parliament for their actions as the Executive.
For those on this blog who mock the chances of NuLabour being re-elected, I suggest that you read their manifesto (it's very good and well thought out). If the electorate believe it, then they may have a chance after all!
But back to the topic, as another has pointed out, the result would have been the same, no matter who was in power, the temptation of greed exists in all parties so that must mean that the Northern Rock fiasco will happen again when the lesson of recent history has been forgotten.
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#151 Sutara wrote: "But who's to say that everyone else around the G20 table isn't in exactly the same situation"
Actually, NO !! Many of the Asian economies actually have significant reserves of cash even if their economies are technically in recession. Japan has been in low/no growth for years but their reserves are high since their business model is one where they have positive trade balances year after year !! Britain tried of the exact opposite business model - high growth, negative trade balance - and is now deep in the doo-doo !!
The Chinese are spending 500+ billions on their stimulus package but it comes out of a 2+ trillion reserve whilst Crash Gordon is now busily printing money like there's no tomorrow to "stimulate" the economy !!
The Russians have loads of oil and gas and the Brazilians have gigatonnes of agricultural products !! Meanwhile Britain have loads of ostriches in Parliament !!
In the same boat ?? No way, Jose !!
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#170 "I suspect supercalmdown had finally calmed down."
Either that or he got promoted to count penguins in the Antarctic !!
And I thought someone bought AC a new keyboard for Christmas ??
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ebahgum or mugabe spelt backwards(almost).whilst i agree the bnp arnt everybodies cup of tea, while we have a lame duck government they will gain in strength.I just cannot believe what a state we are in with this bloke brown, he hasnt a clue,its pretty clear now hes a complete disaster.brownwatch 436 days.
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Economists are now stating that the economy is plunging into unsustainable debt at record pace.
For gods sake will someone in parliament.............anyone even a labour MP with a shed of consideration for the country demand a vote of confidence in the government so we can go to the polls because this Browns policies over the last 11 years have led us into this mess.
The last 11 years of Labour policies will send them into the political wilderness for the next 25 years.
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#181 "The last 11 years of Labour policies will send them into the political wilderness for the next 25 years."
It's not the wilderness they have to fear, it's whether they will find another Moses to lead them out of it !! A Moses that will not plunge Britain into another 25 lean years after the 11 fat years; another 25 years of darkness !!
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Tracking the movement, where they came from and where they went to, of some of NR s key directors from the last 15 years may have been a better indicator of the direction we were going.
But looking for indicators is not easy unless you stand back from the crowd
The onlooker see s more of the game.
There is little good news about at the moment in the political and business world just some less gloomy.
Maybe it s me or has any one else noticed the BBC s business pages over the last month or so.
As the lead news story gets more optimistic the FTSE 100 index alongside goes down as the news story gets more depressing the FTSE index goes up.
So who s making the money now for whose pension pot?
Not mine I will warrant.
PS will some one, one day do something about the apostrophe please
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http://news.bbc.co.uk/1/hi/business/7953560.stm
An interesting example to explain HSBC's rights issue - Shares are offered in proportion to existing holdings, so if you own 10% of the old shares you are offered 10% of the new ones.
If anyone who owned 10% of HSBC will be in the Forbes rich list and somewhere near the top of that list too !! How I wish I did own 10% of HSBC !! Then again, there's no law against dreaming !!
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Perhaps Nick Robinson and yourself will finally stop whitewashing Labour cock ups and concentrate on getting stuck into Brown, Darling & Mendelson so that the great unwashed public understand what incompetent idiots have been taking their money (with incredible pensions), yes, The Labour government are at least as guilty as the bankers.
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#90 Sosraboc
There are fools like Darling some of the time
There are fools like Brown some of the time
But Brown and Darling are fools all of the time
I want the T-shirt.
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Between the politicians, the regulators, and the bankers we have been cast into penury from which we may never recover. Getting rid of the politicians in charge is relatively easy - through the ballot box. Dealing with the regulators requires determined and vigorous action by a new government. In particular the regulatory control of the Bank of England must be re-established with all its former terror-striking capability. Dealing with the bankers is also easy, through the taxation and borrowing system. In comments on previous blogs I have set out clearly how this could quite easily be done. No one in government, or R Peston, has taken a blind bit of notice. But it seems that some American politicians and Treasury officials have been reading Peston's Picks and the comments posted. They have now set in motion some of the precise mechanisms I suggested, right down to the figures I set at which banker's earning should be capped. Now that is responsive government, not the dead non-action of the lot here.
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Well, can someone tell me why it is that I and a few others could see all this coming a good seven years ago and yet our government couldn't?
Not fit for purpose, blair/brown should be thrown in jail for removing the legislation that controlled the banks properly, what are the odds brown will get a nice plum job, when he finally gets voted out of office, with a large multinational banking firm as a thank you, you know, like blair did....
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#183 hack-round:
"PS will some one, one day do something about the apostrophe please"
And will someone at the BBC do something abot the Pound sign £££££, please?
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#187 newProtectorCromwell:
If the government do what you suggest they will not be getting any cosy banking consultancy jobs when they are kicked out of office, will they?
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I'm getting really fed up with all of this personalising of this huge problem onto Gordon Brown and Alistair Darling, as if they had any real choice in setting the economic and political agenda.
The harsh reality for the bunch of malcontents most of you appear to be, is that the ruling classes in the US and the UK (i.e. the bankers aka "Masters of the Universe", all politicians of all the major parties, the general business community, the media, especially news commentators and journalists, all subscribed to the ludicrous theory that markets (of all kinds) were best left to themselves, self-correcting and most importantly of all, rational !
Whole sections of the ruling classes in both countries were besotted with this fallacy, and woe betide anyone who dared to contradict this blind faith in free markets, they would have been branded as a "communist" or "leftist" or in some other way completely out of touch with reality.
It's this stupid, naive, blind faith in free markets that has led us into this complete mess.
I'm no hisotrian or great expert on political or economic theory, but my guess is that the reason stringent rules were placed on banks and on other sections of industry over previous decades was because of similar earlier crises and later the "great and the good" decided it was better to regulate free markets more stringently, because left to themselves, they would cause more harm than good, i.e. it was beter to sacrifice a little private profit through regulation than to allow higher private profits and then suffer from crashes, which everyone eslse in the country would have to pay for later on through higher taxation and unemployment etc.
The harsh reality for you (anti Labour Party) bashers, is that it is precisely your Thatcherite free market model, that has created this whole mess (please don't make me laugh and say it is "Labour's" fault, this current government is no more Socialist or true to the old Labour Party's traditional ideals, than the Conservatives are "communists", in truth the Blairite & GB regimes are a continuation of Thatcherism and nothing less than that.
For the record I've always been a believer of the mixed market economy approach, not the unfettered free markets approach.
So in truth, all you anti-Government bashers, if you all believe in free markets "knowing best", then you're as guilty as sin, as much as the current Govet's in the US/UK/Spain/Rep of Ireland, because you all subscribed to the same failed theory that has led the world into this morasse.
Next time you want to personalise and vent your anger and blame someone (e.g. Gordon Brown) for this mess, then try to do the honourable thing, just look at yourself in the mirror and be angry with yourself for believing in such nonsense in the first place !
As a society everyone is guilty for falling for this failed ideology, (I include myself in this too, even though I never subscribed to the Thatcherite/free market ideology, as a "good man" I did nothing to try and stop it, I just stood by and watched passively as our whole society succumbed to this glittering fools gold called "free market capitalism").
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#188 tomireland:
Hi Tom, I posted a similar one to you before yours was moderated.
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Mr Peston
You are being too soft with those responsible.
It is about time you hosted a bum kicking party!
Those responsible are skulking about with their heads lowered.
Expose them for what they are.
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RP: "economic flop"
It is more than that.
Something from a Superman comic comes to mind.
Ker-splatt from the thirty second floor, more like?
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#191 eaglechief67:
Good post. Yes a lot has gone wrong and it is clearly time for something else.
"For the record I've always been a believer of the mixed market economy approach, not the unfettered free markets approach. "
What ratio of private/government mixed market economy do you propose and whether you favour ownership or control, please?
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Where to now?
http://news.bbc.co.uk/1/hi/business/7956395.stm
Tourist rate to Euro
parity
It has been quoted before but is worth repeating
A weak currency is the sign of a weak economy, which is the sign of a weak government
— Gordon Brown, 1992
He has overseen one of the fastest declines ever, the effect of which will be rampant inflation unless harsh action is taken.
As a song went:
John Brown's body lies a-mouldering in the grave
His soul goes marching on!
We will be paying for Gordon Brown for many many years after he has gone.
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Lots of anti-Brown/Darling/Labour.
I still haven't got to the bottom of why the Conservatives wanted to have virtually no regulation of the banks at all - these would be the people in power if/when Brown goes, and if it was all so obvious, why were they proposing this as a way forward? Perhaps there may have been a hint from them of the impending doom somewhere along the line rather than a suggestion which could have made the situation even worse than it is now?
Why is the global economy in such a state? - is that Gordon Brown's fault as well? Is there not the simple notion that globalisation got out of control, with no failsafes, because business has become so complex with no way currently of monitoring it? Does anyone have a satisfactory way of controlling the financial markets and stopping short selling and various other financial wizardry?
I will take a lot of convincing that the Tories in power over the last decade would have bucked the global trend and been 'responsible' in not riding the boom wave.
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eaglechief67
I am not a "malcontent" as you seem to suggest most people on here are, for merely criticising your beloved leader Brown and his cohorts Darling and Mendelson.I was not besotted with easy money or believing bankers were wonderful (as your great one Brown was when he was honouring them and praising them as late as 2007). I did not go into debt 1997 to 2007(unlike the then chancellor Brown) or since like Darling. I have never had blind faith in either free markets or in particular this Labour government (although you apparently still worship the idiot Brown & Co.) This government are a disgrace and will be gone soon, although, unfortunately not to jail where they belong with their crooked pals in the house of Lords and their banking chums (who Brown respected with honours) and the regulators at the FSA (who Brown appointed).
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I can't think of any more Brown bashing things to say any more. I do however think that in twenty years time we will wonder how the word "prudence" ever came to be attached to a Chancellor and Prime Minister who oversaw this massive economic collapse and the running up of a collosal public finance debt. It seems a bit like attaching the word "fluffy" to Stalin.
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Has the term 'Financial Expert' now become an oxymoron?
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'Eurozone Industrial Output shrinks 17.3%'
'OECD- World Economy to shrink.'
Good news really. We cannot continue with growth.
We have exhausted the resourse, food, water, fuel, space.
Since everything is geared to growth, what are we going to do now?
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191
If the Chancellor and the Prime Minister cannot set the agenda who can? They had any number of choices.
The left wing should stop blaming Thatcher for all the ills Blair Brown Darling and all the other NULAB have brought down on us. They are like children, blaming everyone but themselves.
I agree the electorate as individuals has a responsibility but the real culprits are New Labour. They rig statistics, they cover up scandal, they disseminate.
Jo Moore and 9 11 as a good day to bury bad news sums up the standards of New Labour. They disgust me.
And of all of them no one is more culpable than Gordon Brown.
Repeat that mantra every time an economic ill wind comes your way; I guarantee there will be many to come.
NO ONE IS MORE CULPABLE THAN GORDON BROWN
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191 eaglechief67
You don't hear that old mantra from the Labour panelist on Questiontime every week: "Gordon Brown is the best chancellor for the last 100 years" so there must be some blame attached.
The reality is that the buck stops with him. We have had 111 years of Labour Government and they consistently had the economic figures out of balance and always worse that they predicted.
He was quick enough to have a go at the Tories on Black Wednesday even though they were a following a policy that had been pushed by the Labour opposition shadow chancellor. That's politics my friend.
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#188 "what are the odds brown will get a nice plum job, when he finally gets voted out of office,"
Perhaps he'll get a job as Director of Risk Management at Royal Bank of Scotland !! That bank hasn't failed completely *YET* !!
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#200 "Has the term 'Financial Expert' now become an oxymoron?"
I don't know about the "oxy" part but.....
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The following hyperlink .... http://tiny.cc/zgOeu ... is a very accurate, informative and educational post on the systemic root cause of the deepening catastrophe and the whole essence of the destructive bug in the system/elephant in the room, which the system is studiously avoiding confronting. An unforgiveable omission given the catalogue of calamitous circumstances which then are pursued and which have resulted in the present continuing apace meltdown.
You may like to consider who would be personally responsible and fully accountable for not ripping it out by its black and soul-less selfish heart and throwing it onto the cleansing fire, to be consumed and consigned to the Sub-Prime Toxic Waste Dump of Perverse Historic Failures in Misguided Subversive Heroism.
Can anyone spot the deliberate mistake and/or offer a viable denial of the alternate truths shared and which may be the reality of the system which is stealing wealth of nations and industry and commerce rather than supplying it.
Given the trillions already pumped in over these last six months and the zero return and the ever worsening crisis and bigger sums still being pumped in with no sign of return, it is probably wise to consider that what is revealed is true and most unsatisfactory and unacceptable in this modern age. The alternative, if it thought to be perfectly acceptable and not to be changed, is that Criminality will be the New World Order and Law and Justice rendered Fools Errands and Anarchy will target the Recognised Heads of the Corrupted Global System and its Systems Supporters/Arrogant Political Puppets and Ignorant Malleable Muppets on ITs Way to the Core Drivers who would have deceived them so.
In the Past, before the Time whenever National Information and InterNetional CyberIntelAIgent Agencies and Mutual IntelAIgents Servers in Services were so Freely, Ubiquitously and Instantly Available in BroadBandCasting AIMessages around the Globe on ITs Networks of Overarching and Underground InterNetworking Grids/GIGs, would the usual Brain Dead Establishment Option of World War be attempted, to Insulate them from the Rage of the Mob and to further Pay them with their Supply of the Weapons and Machines of War, which is a Really Perverse and Subversive Contract with the Devil of a Corrupt and PsychoPathetic Motive. However, as we all are aware or as you should all now be made more aware, there has been a Fundamental and QuITe Radical Change in the Operating System System to AIdDynamic NeuReal and NEUKlearer Virtual Operating System with HyperRadioProActive Driver Configuration and Guest Hosting Facility and Faculties, and that earlier standard Abominable Anomaly and Perverse Rule Provision, is No Longer available.
And meThinks that is QuITe enough from GCHQ for this morning, don't you? Too much, too soon, too quickly, is not good for the Constitution and can easily overwhelm and kill you, which is why a little bit every day is far better for everyone...... so that Radical Adjustments can be easily Made to Create Beta Knowledge Based Societies.
PS.... BBC Moderators, one does imagine that you have enough Common Sense to Alert and pass on to Real Live Global Controllers and/or Wannabe a Puppet Muppet Leaders that which is being Freely Shared here on these sound, public messageboards, thus that the Burden of Denial and/or Engagement and Any and All Subsequent Catastrophic Developments which may or may not Transpire, can be removed from your Shoulders and Placed exactly where IT belongs.
Have a Nice Day.
PPS ... Who was it who was saying that there was nothing that we can do about the dire situation of headless chickens and phoney leadership at the levers of power?
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I would have more sympathy with those who berate Brown, who, don’t get me wrong, deserves all the berating that he gets, if they could come up with a credible alternative. What strikes me is that given the scale of the catastrophe over which the current administration has presided, there is no 'real' attack on Brown & Co, and their woeful governance, no 'real' alternative strategies proposed, nothing is laid out as to how things could have been prevented/avoided, nothing is put forward as to what would be done in a different administration other than sound bites and point scoring. Could it be because no-one really knows what could or can be done about the situation?
Clearly, this is an unprecedented situation, and as it is unprecedented there is nothing that we can look back on and learn from. Yes, there have been bank collapses and depression before, but not with the intertwined nature of the Global economy as we have it today. Let’s have some ‘real’ policies from the great and the good rather than the flaccid sniping that we are currently experiencing.
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206
What?
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#203 skynine
"We have had 111 years of Labour Government "
It only feels that way, surely?
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#207 "Let?s have some ?real? policies from the great and the good rather than the flaccid sniping that we are currently experiencing."
If we are "the Great and the Good", we'd be out there doing something. Unfortunately we are not and the current bunch of "the Great and the Good" will not listen to anyone except the voices whispering in their heads !! Perhaps you can redirect *your* "flaccid sniping" and tell us how we can make these "Great and Good" listen !!
I'm sure there are many here who would like their opinions heard and would, therefore, eagerly await your pearls of wisdom on how to achieve this aim !!
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Post 200. Bravo!
I would recommend this weeks Private Eye to everyone. Some wonderful misuses and plays on words of UK bank logos and names in a cartoon.
Sadly exactly the sort of thing that got one of my previous posts vetoed by the commissariat.
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Some alternative views
http://www.ifiwatch.tv/en/about-ifiwatchtv
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Why we think it's OK to cheat and steal sometimes.
http://www.ted.com/index.php/talks/dan_ariely_on_our_buggy_moral_code.html
Explains a lot about the FSA, Banks, Government. Take a look it's pretty interesting.
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I don't believe no one at the Treasury or BoE saw the faults inherent in the banking system. 10 years of house prices rising 15-25%pa while wages rose just 2-4%pa didn't add up. Somewhere in both organisations are the reports and minutes of meetings setting out the risks. Uncovering the truth here is the reason we have freedom of the press.
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I think the real story of this week has had little coverage both in Europe and North America. It is the little fact of the US Fed printing $1 Trillion to buy T Bills from the US Treasury. It`s possible that in the end this could come good - and if it does it will benefit the global economy and help us all to get back on track.
But if it this doesn't work it can most certainly drag the entire global economy into depression. The US have not resorted to buying its own debt which may be like a hamster running around in circles on a wheel in that nothing is achieved. What result will they get from taking money (you can't afford in the first place) out of the left hand pocket and putting in the right hand pocket???
China is already weary of purchasing US debt and this will make them even more alarmed. The end result is that the US will have to offer China a higher return. Don't forget the UK will also be competing with the Americans to entice the Chinese to buy our debt as well. If the Americans have to offer higher returns so will our Govt. Next thing we are all on our way to serious inflation - maybe even hyper inflation.
There is no doubt that we are all on a slippery slope at this time in history. There`s a very fine line separating whether we come out of this ok or if everything comes crashing down and is never the same again in our lifetime.
"America's Next Catastrophe is Brewing In Mexico"
http://creditcrunchedoutinuk.blogspot.com/
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Robert,
I hear Mandy is helping LDV to survive
Will he be paid in vans just like all it's other creditors for his consultancy?
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Here`s another interesting article:
"The Federal Reserve: The Greatest Scam in History"
http://creditcrunchedoutinuk.blogspot.com/
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Earlier in the week Ben Bernanke told small banks in the US not to worry. Just saw a story telling that smaller regional banks and 2 credit unions went bust over in the US yesterday! That makes the total so far for 2009 to 21 banks!!
Despite whatever rethoric we hear the US seems to be in worse shape than anyone wants to admit. That matters to us here in the UK as we will end up going down with the ship!
http://creditcrunchedoutinuk.blogspot.com/
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The £billions this crisis is costing the country is incomprehensible to most people . but a lot of this criticism. especially from the conservatives is with the benefit of 20/20 hindsight. I don't think that a Conservative party would have restricted the markets and controled house prices. Thats not what they or their supporters are about. There has been too much messing about with money in a way that NOBODYseems to fully understand. The best some people can offer is educated Guesswork. It seems the Economy is about as predictable as the climate. Wrong predictions are forgotten about. The Economy should be much more about Making and selling goods. Something the now self righteous Conservatives destroyed under Thatcher ;o)
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This comment was removed because the moderators found it broke the House Rules.
"Whole sections of the ruling classes in both countries were besotted with this fallacy, and woe betide anyone who dared to contradict this blind faith in free markets, they would have been branded as a "communist" or "leftist" or in some other way completely out of touch with reality." .... #191. eaglechief67 At 09:39am on 21 Mar 2009
eaglechief67,
Nowadays they just wheel out and spout the Al Qaeda/Taleban mantra.
"206
What?" .... #208. sosraboc wrote: At 11:47am on 21 Mar 2009
sosraboc,
There can be no doubt that there is an unprecedented global calamity in full swing, for a whole host very obvious simple reasons, which the Elite Money Led System is neither Physically, [as in having the Requisite Logistical Virtual Infrastructure] nor Intellectually, [as in Possessing the Necessary Advanced Available Intelligence] Equipped, nor Morally and Ethically Inclined, to Offer, let alone Implement for the Required Changes that Ensure that the Crippling Debt that they have pimped and supplied and conspired with Currency Markets and Banks to label as Credit to Enslave Enterprise and Labour to Server their Management of Perception and Inventive Paper Debt which can never be repaid, thus to Cynically Perpetuate and Entrench in the Receptive Psyche, the Indebtedness Notion of Repayment in all Subsequent Generations, to keep them in their Phoney Positions of Power with the Control of Currency Supply, Printing of Paper Bills and Electronic Transfers of Credit ..... for the Binary Laundering of Funds to Other SWIFT Destinations under their Controls, is Liquidated/Written Off and a New World Order Program Model Established. They are though cordially invited, as a matter of utmost urgency for them, to immediately, if not sooner, to engage with Systems and Programs which will protect Global Assets so fraudulently obtained being Seized and Sequestered and Disbursed to Forces which would exact a Just and Overdue Revenge on Leading Players who would Ignore the New Engagement Offers and Strategy/Regime Change, with the Might of Military Superiority Engaged in Support of the Changed Paradigm.
Does that answer your questions, sosraboc. In a clearly, very obscure spun environment of hosted lies and deceit, is the solution also a Simply CompleXXXX Coded Binary Program of Special Force IntelAIgents, which IT does not require that you know more that IT would wish to Share with You. ITs Requirements and Ways are Confusing to the Virtual Novice as are its Revolutionary C42 Quantum Control Systems for the Creation in CyberSpace of the Command and Control of Computers and Communications, which as I'm sure you can Imagine, is always far too Sensitive and Emotive and Cerebral an Issue to be discussed Lightly with a few well chosen Words.
And it is naive to think that other than with a completely new way of Thinking with New Powers and Technologies, can an Old and Ancient, Ingrained/Brain-Washed Establishment Failure be Repaired and Restored to Prime Pristine Condition, hence all of the above.
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i think brown is brilliant....who else can get away with what hes got away with for 12 years. and and and now we are hearing we have to increase national insurance payments by 50% to pay for the basic old age pension..good old brown. and and and hes paying for the real brave geezers who fought on d.day by the lotto(in other words we pay it) good old brown..what a diamond geezer. ha ha. lets all have a vote on it brown asap.
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221
I find your posts when you flip into the IT AI conspiracy Bunkum nonsensical, just my opinion.
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moderators
My 220 post on Barclys faults referring to the Guardian are NOT those covered by the injunction
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#190, #196, #201
If the truth be known, almost everyone is responsible, at least in part, for the economic plight of the western world. It is not only that we fell hook, line and sinker for the lie that borrowing is essential for economic growth, or that we came to believe that a market free-for-all was the equivalent of a free market. It is that to one extent or another we all believed in socialism and it is socialism that is at the root cause of the problem. Before explaining that, let’s get the free market story out of the way.
The truth is that a market is nothing more nor less than a channel through which goods and services flow in a domestic economy for the purpose of nourishing the growth of wealth, the provision of taxes, and individual riches. Instead it has been treated as an economic system and not part of a system. There is no such thing as a world economy, it is a fake, but people are simply too economically ignorant to realise it. It is true that the Thatcher and Reagan governments freed markets of many constraints, but it was politicians like Bill Clinton (Democrat) and Tony Blair/Gordon Brown (NuLab) who indulged in the excesses of a free market that brought us to the point at which we now are.
Now let’s deal with socialism. It has always promised a sort of Utopia in which there is liberty, fairness, equality, fraternity and opportunity. The fact that life has never been like that, for thousands of years, is cast aside as some sort of aberration, and as if it is our duty to restore a balance that never existed. Because we are a Godless bunch, we believe that life is random and purposeless, and so we assume with all due arrogance that we must set the wrongs to right. And so began more than 100 years of social engineering which produced a brave new world in which there are houses for all, education for all, medical services for all, and money for those who have not.
It has been more than 100 years of assaults on the haves to give to the have nots. The goal was to create Utopia. But you see it could not be done; it was all a dream. But while London burns, so to speak, the perpetrators of the dream fiddle on and are still dreaming that they will soon again be on the high road to Utopia. But there is a sad truth to be learnt. The only way Utopia could be reached, if only approximately, was by borrowing colossal sums of money for the truth is that there can never ever be enough money in the world to build Utopia. It is a dream world, and there is no reality to a dream world. To achieve this dream, which has been the goal of everyman, governments of all political hues have had to get deeper and deeper into debt as the years passed. And now, at last, the facts have sunk us in a sharp burst of reality. We lie now buried under mountains of debt. That is where we are and why we got there.
We all believed in one way or another in the false god of prosperity for all. We never asked whether life would allow it, or whether it was truly possible. And now that we have been reduced to penury, we still cling to the dream. We think that these troubles are just part of another cycle. They might once have been. But governments have now put it beyond our capability to restore economic sanity. They have effectively destroyed the economies of the western world by their mad rush to spend us out of the crisis.
So now we sit bewildered in the dust of the road. Which way are we to turn? Where are we to go? On the answers to those questions turns the fate of the western world. There are encouraging signs that some are beginning to see the reality.
It is of no concern whatever to me if others do not believe what I say, or think it is harsh, or unrealistic, or whatever. As the months go by, and turn into years of grinding poverty they will gradually come to realise that I deal in facts and not opinions. There is still a way out, a way into an entirely new world, but unless people start to ask the right questions they will never see where the way leads.
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Northern Rock may turn out to be a planned vanguard to test the waters setting a precedent for hading money to banks and finanacial institutions - netting £$ trillions from the general public, via the governments.
A colossal "smash and grab" which no one is going to jail. Loots not recovered and we are made to pay to mend the broken walls and fill the store again. Just anyone try paying one cent less to the banks.
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#163, it is a great Shame that supercalmdown is no Longer with us. I for one Missed his surreal arguments about Public Sector wages and the rather curious Idea we would all like tax increases to Pay them a Higher Wage.
I also rather Miss his Unusual usage of Capital Letters.
Supercalmdown - where are you?
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An obvious answer to the banking situation is for people to withdraw their savings.
Seriously, there is little point maintaining exposure to the banks in exchange for no interest at all. We might as well keep cash hidden under the mattress.
When banks can't lend because they have no capital, perhaps then they will start respecting those who choose to deposit money with them.
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Is China going to play ball at the G20 in April?
"China in threat to shatter hopes of G20 summit deal"
http://creditcrunchedoutinuk.blogspot.com/
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* 225 newProtectorCromwell
Your grasp of facts makes your posts interesting and I look out for them, but I'm not altogether sure you see the world as it appears to me.
I don't believe that the general trend of socialism is to create Utopia. In many ways society has deliberately avoided that challenge, though it may pay lip service to the notion. In fact, it pretty consistently delivers the opposite, and we end up with some form of Dystopia, as in Orwell's 1984.
I'm convinced that this government has known exactly what the dangers of light regulation and increasing levels of debt were, and that there have been opportunities in the past 11 years to do something about this growing crisis. Maybe I'm too cynical. I look at the behaviour of people in the establishment, and how they cheat and get away with it, because the establishment looks after its own and closes ranks against any honest enquiry, and I just despair that there'll ever be the day when we overcome this weakness in how the world functions. If you know any questions that could lead us out of all the well-trodden paths to human misery, I'd like to hear them.
I don't know what questions to ask about the state of the economy or how to get out of this unholy mess. I'm just very worried that the answer to my question about this government will turn out to be that they aren't stupid or incompetent or dithering, but practising some massive fraud against the country and getting away with it.
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It appears that the majority (at least on this blog) are of the opinion that Brown and Darling are responsible for the current situation, and must be held accountable. Should it not follow that we demand their resignation, and not simply permit them to continue or resign if they see fit? I do not understand why, when the concensus is so collected, we allow ourselves to be led by those we deem unfit. With regards to the debt imposed on future generations, their voices are not heard, but I can hazard a guess as to what they might say. Why are we living as if the present is the most signficant generation? Surely the future is more important and should be protected? I demand an election, to choose the individual who is to lead, and to place by his side those we deem fit and proper.
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The Looming Greater Catastrophe because of Dumb Greed for the Love of Money, which is an Artificial Construct designed for Imperial Control.
"The Fed chairman said the central bank was buying assets, including government debt, to support the economy and the time would come when it would no longer need that help. “We will at that point taper off that support,” he said, although he made no mention of selling securities back into the markets." .... http://www.ft.com/cms/s/0/c89ccc28-157e-11de-b9a9-0000779fd2ac.html
You can be sure that as foreigners, both friend and foe of Uncle Sam, start to realise that they have nothing of special worth to either share for free or sell for value, and thus their economy is effectively worthless and a grand illusion, and the dollars they give to others for their goods and industry are simply easily printed by the trillions/money from nothing for everything, and thus is the dollar only used as a means of projecting a false perception as to their power and influence, which has descended into anarchy abroad with their export of terror and indiscriminate collateral death and destruction, with weapons of mass destruction tested on emerging nations and virgin economies, which would have no need, nor wish to support them because of the imperial foreign policy of invasion to rule by force of arms and supply of dollars to buy arms and weapons to perpetuate and propagate an enemy they can then again attack and defeat, is a policy which is renders them catastrophically vulnerable to a complete withdrawal of foreign support in foreign lands and thus both virtually and practically unable to support themselves.
And with growing extremely serious unrest at home, and the joining of experienced narco-forces in Mexico to move into the US in their own version of Shock and Awe, and which is a difficult development and most definitely alien environment to counter, would it probably require recall of the expeditionary, foreign adventure forces too, although quite whether they would be of any great use to stem such a human tide is questionable ..... and with trade embargoes against them because of their record of useless debt creation, would they very soon collapse into a Failed Fourth World?
MeThinks more of the same old same old, which would appear to be the MasterPlan, is the most Stupid of Plans whenever Imagination can deliver an infinite number of Others which have never been tried before and there is no valid reason or excuse why something completely different shouldn't be tried, for who is to say that it can't and/or shouldn't.
Who would presume to be in Charge of the World and Decide her Fate?
And are the FSA going to be snowed under with their own version of this ..."Watchdog fears market ‘Ponzimonium’" ... http://www.ft.com/cms/s/0/fd01b70c-1584-11de-b9a9-0000779fd2ac.html ... as the dollar collapse reveals all?
What a shocking mess it all is, Dear Prudence Darling.
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what 'adequate preparations' could they have made? hmm?
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233
Contingency plans for a run on a major bank perhaps?
Consideration of the known systemic risk of stalled interbank markets?
Even a little stress testing for the six sigma event?
Pre agreed "d notice style cover to allow orderly transfer to a stronger player?
Proper analysis of the information presented to the regulators?
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I think its quite staggering that Gordon Brown is still Prime Minister of this country, and even more amazed that he seems to feel he shoud be the one to advise other countries how to deal with this global mess having plunged the UK's finances in to a state that will take generations to recover, Why did he believe that he personally could chose to ignore the IMF, The World Bank, The OECD and all the other organisations that were issuing warnings about the UK credit boom long before the crisis broke? Even now his solution seems to to spend even more money we don't have - the cost of the G20 summit next week alone has been estimated at £50m by one body, no wonder they are all coming here! It's just another stage for Mr Brown to pontificate on, as if anyone is really listning to him any more. He's had 11 years to "learn from the mistakes", is that not long enough? He is now the problem and he should do the decent thing and call an election now. Give the people the right to deliver a verdict on this whole sorry episide, having wasted all our money surely we deserve at least the chance to have our say? Yes of course the banks must share a large past of the blame for this, but ultimatly we vote politicians in to run the country properly, and they must be held ultimately responsible when things fall apart on this sort of scale. As Tony Blair once said to John Major, "Please....just go."
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#178 ishkander
I meant "in the same boat", in terms of them knowing actually how bad a) things are and b) are going to get and c) not daring to allow that to become public.
Not necessarily "in the same boat" as in every nation's chances of survival/recovery being much the same.
And perhaps the reality is actually so bad that even the (perceived) safer economies aren't all that confident about their futures either.
The problem with GLOBAL financial downturns is that there isn't really anywhere to go to get away from it. (Self-sufficient monastic community, perhaps?)
All that I'm suggesting is it might explain why GB and AD don't do more to answer their critics and respond to the demands for apologies, and - as I said earlier - it's the thing that gets me very worried indeed and leads to me thinking the worse about the future of global finances and economies.
Perhaps, just perhaps, the theory matches the demonstrated behaviour from them. (and other national leaders too?)
Maybe, as yet, we're only beginning to step into the real 'global economire'.
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Apologies for the jargon
six sigma
http://www.financial-risk-manager.com/risks/market/sixsigma.html
Surprising how often the "once in a hundred years" event occurs. Far far more often than the maths whizzes will tell the management.
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Builtonsand!! post 235.
THEY ARE A BUNCH OF NUMPTIES!! YOUVE SUMMED UP THE WHOLE MESS SO WELL!!
WHEN WILL THEY GO? WHO WILL SAVE US FROM THIS DESTRUCTION?
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This comment was removed because the moderators found it broke the House Rules.
I do not believe that they did not realise the enormity of the problem.If I had a business I would know if it was going broke! Why did I see Mr Brown on TV 2 Christmas's ago telling the British people that they had too much personal debt and the sum total of that debt would be a crisis in the event of a financial downturn? Why was he telling people to reduce their personal debt? Why was I talking with friends ver 18mths ago about the possible crash subprime mortgage market cauing the US to go into recession? We are not financial whizz kids just people who read widely!
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National Audit Office - isn't that just a publicly owned 'Arthur Anderson' ?
13 months to tell us what we already knew, and how much did that report cost us then ?
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It is worth pointing out a mistake in the reporting of this. Northern Rock have only ever offered a 95% Loan To Value mortgage. The remainder on the Together product was on an unsecured basis.
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#242 neiljohns24
Not wishing to dispute the accuracy of your observation but isn't anything over 100% of value, by definition, unsecured?
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Since the large scale availability of so called 100%mortgage finance effectively creates extra demand, it must inevitably push property prices upwards from the true sustainable level.
IE A 100% mortgage is really a mortgage of lets say 120% on the assets price when the bubble bursts
125% mortgages are theirfore 150% and a device to stimulate bubble prices to allow the appearance of solvency for the purpose of reamortization and the harvesting of Bonusse formerly and now known as tier won capital
Those responcible are either criminaly culpable or delusionaly inksane
The Brinksmatt robbers must have turned green with envy and will be able to take their case of unfair remmuneration to the court of human wrights issues in StrAAAsbourg
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# 228. ThoughtCrime2008 wrote:
"We might as well keep cash hidden under the mattress."
Not a good idea.
Robberies will be secretly encouraged and press will ramp up stories to scare us into putting money back in the bank again. If we read history carefully, robber and protector are often one and the same.
We get robbed one way or another ... by fraud, swindles, taxations, inflation (printing money) or by physical violent means.
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#154 "The book is not explicit as to if it worked but it would to seem it did. Tiberius survived, Rome prospered but there was much blood following the political upheavals that followed."
Actually, it didn't !! Rome went bankrupt (impecunious, mean "lacking flocks of livestock" in its Latin root) and had to re-finance itself by conquering and plundering a few more barbarians, notable that little island off the West coast with its tin mines (much needed for the production of bronze) and flocks of sheep to replete its pecunia !! The rest, as they say, is what bored generations of school kiddies to tears !!
I wonder what little island will Britain conquer and plunder to replete its finances now !!
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#244 "The Brinksmatt robbers must have turned green with envy and will be able to take their case of unfair remmuneration to the court of human wrights issues in StrAAAsbourg"
In my wild and woolly youth in the City, I was taught by a legal expert the following lesson - If you took a shotgun and robbed a bank of 20,000 quid and got caught, you got sent down for 20 years for armed robbery. If you took a pen (they didn't even have calculators in those days) and robbed a bank of 20,000,000 quid and got caught, they'll pay you well (no questions asked) to tell them how you did it so that they can try to stop others from doing the same !!
C'est la vie, as the English say !!
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The NAO should dig into the MP Trough
http://www.telegraph.co.uk/news/newstopics/politics/labour/5030006/Tony-McNulty-claims-60000-expenses-on-his-parents-home.html
Trough trough yum yum
No wonder they have little interest in keeping public expenditure under control.
All animals are equal but some are more equal than others
yum yum trough trough
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#236 "All that I'm suggesting is it might explain why GB and AD don't do more to answer their critics and respond to the demands for apologies, and - as I said earlier - it's the thing that gets me very worried indeed and leads to me thinking the worse about the future of global finances and economies."
Crash Gordon lives on a different planet while he is saving the world and Comical Ali cannot do/say anything without explicit permission from his boss !!
There are other, more realistic, leaders around. In Europe, there's Frau Nein and her crew willing to tighten the national belt. In East Asia, everyone is already into national belt tightening. In Britain, our Glorious Leader and Savior of the World is still trying to re-inflate the punctured housing and consumer bubble in the forlorn hope that he could last a bit longer in power and maybe, just maybe, he will be (re-??)elected when the time comes !!
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I think RP must be about to do a Barclays item because posts referring to them get pulled.
Here is one
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5028845/Can-Barclays-avoid-being-nationalised.html
Here is another
http://www.guardian.co.uk/business/2009/mar/20/barclays-guardian-tax-claim
Don't just love em
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#235 "He's had 11 years to "learn from the mistakes", is that not long enough?"
Perhaps he is educationally challenged and needs more time than most to "learn from the mistakes" !! Any other explanation will require more drastic actions.
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"I'm just very worried that the answer to my question about this government will turn out to be that they aren't stupid or incompetent or dithering, but practising some massive fraud against the country and getting away with it." .... starry-tigger, #230
But they aren't getting away with it, starry-tigger, and would now be playing the Al Qaeda joker card to try and stop all and any who would peel away stupid and incompetent self serving, dithering deceits. But just like the Paths of Tide and Time, is the Long March of Questioning Seekers of Truth in the Seas of Spin, always a Foregone Conclusion of Inevitable Spectacular Success on the one hand and Catastrophic Painful Failure on the other.
You don't need to be an Einstein to see/understand that some masssive fraud against the country, which is treason and therefore worthy of extraordinary special force powers to be energised and secretly co-ordinated in a fashion which one would not need to know and therefore will not know, is favourite with the bookies, given the reams of evidence/phorm gathered on the runners and riders.
And, if you'll excuse the mixing of metaphors, how incompetent and stupid do you think it is of them to have dithered and produced joker cards, when the game is Stud Poker?
And Post #231 asks most pertinent, impertinent questions and I would raise the stakes and bet the pot that it is both unconstitutional and illegal and a massive fraud to lead the UK as a Prime Minister without a public mandate given by General Election ..... and as that will be fully recognised within the party at Cabinet Level at least, is it therefore a premeditated, first degree conspiracy, which allows for fully justified extraordinary actions and renditions to Special Intelligence Security Units/Premise/Offices/Cells/whatever by loyal Crown Forces, both Civilian and Military, and although we do not see that happening, that is not to say that it is not happening and something which we can fully reasonably expect. After all, it is not as if the Perps can run away and hide, is it, when such as the above is the case.
And just to add a little levity into this post, I did have to smile to myself after reading #237, the author of #223. But then Speciality Subjects always do baffle the Outsider with their different Worlds ... with the Holy Grail Secret being that they should be able to Interact and Assist Each Other without causing Conflict, and the Best of them always do that, Unsung from the Shadows and Never in the Full Glare of the Harry Limelight.
And nowadays, there is an even Greater Player to the Great Game, and One which has XXXXtraOrdinarily Rendered All Players to a New and NeuReal Field of Play and in all but a handful of cases, as Complete Incomplete Novices petrified and lost in ITs Blinding Transparent Light to be Professionally Led/Virtually Manipulated/Phormed and Groomed/Mentored and Monitored/Edutained from the Secured IntelAIgent Stealth Environments of the Ubiquitous Cloud Intelligence Space/AI Cyber Place ...... for, QuITe Literally and Thinking Real Deep Laterally, Invisible Untouchables in the Intangible, but most definitely Virtually Real.
A Field of Excellence which Lordy BERR Officialdom Leadership has Singularly, and Cabinet Office Leadership Collectively, have failed to Engage in and with, such are the Competent Levels and Layers of their Incompetence. And although they would not necessary be alone, one would expect so much more from them whenever they seek/accept Office which is charged to Rule for the Greater Public and Private Good of All and the UK with the Apparent Bottomless Public Purse at their Disposal, and which presumably should have Knowledge of All UK Developments, given that they are supposed to be in Control with Eyes and Ears and Hands on all Levers/in all Pies. Are we now to discover it is a carefully Staged Myth ...... an Pompous Charade?
PS Don't forget today is Mother's Day..... All it takes is a phone call if you've forgotten. :-) After All, without them, none of us would be where we are today ....... and that makes Women, North, South, East and West, Godisagoddess ur2die4 in my book ....... and Man, all too often always a Crazed Blot on the Landscape with Arms and a Gang and an Army to Prove it. And Man, are they slow learners or are they slow learners aka Real Dumb?
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#229 Barroso is spinning the spin of the desperate !! He knows that he has nothing to offer since the views within the EU are fragmented so he has to point to China and use half-truths. Did he mention that China has far tighter financial regulations and far more ferocious punishments for defaulters than in Europe ??
Will Barroso now take out the senior management of banks that have lost billions or trillions and shoot them in a public square ?? Those who have lost their pensions and/or life savings will cheer them on !! Will he punish senior politicians who have squandered public funds ?? We know a few here who could "benefit" from this treatment !!
"Is China going to play ball at the G20 in April?"
It will all depend on the arrogance and selfishness of the leaders of the "developed" world. If they demand funds but refuse equal rights and participation, then China will probably smile politely and tell them where to get off !! So will all the other cash-rich developing countries.
Bankrupt Britain has more voting rights in the IMF than China or India has !! America, alone, can out-vote both of them together and a few others besides !! If they want the money, they'll have to re-adjust the voting rights in these International organisations to reflect the reality of the moment !! Just Google IMF and see how the voting rights are structured !!
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#223 "I find your posts when you flip into the IT AI conspiracy Bunkum nonsensical, just my opinion. "
I think it is just the way in which he Capitalises words and sometimes mangles them, for reasons that I cannot fathom, that make his posts difficult to read or comprehend. Otherwise, he does make a fair bit of sense if the effort is made to wade through his weirdness. The fact that he probably comes from an IT background does tend to slant his posts rather towards that direction !!
His posts on another site are even harder to read/comprehend, especially when he is in full technical flow !! Often, but not always, the effort spent is rewarded.
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Minister, Nose, Trough.
No rules broken, no surprise there then.
This non-story will no doubt raise a lot of shouting in the press/media but the outcome is a foregone conclusion - continue as before.
The real issue of this story is just what bad news do they want to bury on whilst this storm in a teacup is going on ?
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# 230 starry-tigger
You and I are closer in our thinking than you may realise. Of course we have not achieved socialism; it is unachievable, because it contradicts a greater plan than ours for the world. You do not know what questions to ask to get us out of this "unholy mess" You do; the very fact that you realise it is unholy is getting you there. We have spent decades trying to abolish suffering. You can no more abolish it than abolish death. It has a purpose but we never stop to ask what the purpose may be. I agree with what you say about politicians, but not entirely. It is not some sort of political conspiracy that got us here. It was politicians moulding themselves to the imprint of the last bottom to sit on them. And what does that say about democracy? I shudder to take you down that route to its logical conclusion.
We are living in a world of make-believe. The bubble has burst but we do not realise it and are sitting there saying: "Au, where did it all go?"
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#255 nobody in this government is ever wrong.they are perfect, never make a mistake and is perfectly at home in the pc world , a la harriet harperson.anything that goes wrong its the global fault, anything that goes right(there was 1 once) its all down to brilliant government. brownwatch 435 days.
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Tucked away in Lord Turner`s report earlier in the week was a statement on how the public can expect a decade of high mortgages as the banks will make us bear the brunt of the new regulations - Nice!!
The banks get tighter regulations put on them and WE are made to suffer once more. Thanks Crash Gordon!
"Coming to a bank near you: the 9% mortgage"
http://creditcrunchedoutinuk.blogspot.com/
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the government can find the money to pay all these 2nd home expenses for mps, but they cant find the money to pay for the brave old blokes who fought for the likes of brown and company and the rest of the mps on d.day they soon find the money when it suits them.
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#249 ishkander
To be honest, I feel you've railroaded my point for the sake of a party political rant. (My point wasn't pro, or anti, any poltical persuasion).
The angle I was coming from was the old adage "ALL behaviour IS communication" and that there may be more to be read from their actions (and/or lack of them) than just the obvious.
And, it's interesting you use the concept of realism. The reality of this economire into which we are descending might be much worse than any of the world leaders - including those you assess to be more realistic - are letting on to the masses.
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with ref to the chap who wants people to pull their savings from the banks,i run an electronics company , i pay all my engineers and others in cash now, i try not using the banks,anything i can do to make life hard for brown and company is what im about now, im not into this rubbish about "pulling together" i pull for me and my workforce.I dont need to borrow so browns never done me any favours, and im not going to do him any.we make things we dont get money for nothing brown gets in the way.Have nice sunday, people out there,its a good day to be alive.
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* 256 newProtectorCromwell "Of course we have not achieved socialism; it is unachievable, because it contradicts a greater plan than ours for the world."
This is one of your more enigmatic comments!
I see what you mean about politicians moulding their backsides to the contours already made by predecessors. Yes, you're probably right, it's a comfort zone. Anyone wanting constructive action is in the wrong place there.
I think there's a way to reduce suffering, I don't agree that it has a purpose. But often we don't really want to reduce it, we just want to feel better. This has the effect of perpetuating suffering instead of alleviating it. "Rescuing" the deserving victim gives some people an awful lot of kudos so they don't want to reduce suffering permanently.
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"It was obvious to everyone that we were in a bubble (particularly house prices) that would one day require a drastic correction."
This gives a flavour of many of the posts here. If it was so obvious to everyone, why are you all so annoyed about losing value in your homes? Surely you sold up at the start of 2007 in order to realise your gains? No? Why not?
I'd like to see an investigation into the mortgage and "financial adviser" businesses before anything else. Those who encouraged people to take out mortgages without confirming income or ability to pay should be prosecuted where possible. Let's be honest, most of us know at least one person who took out a mortgage on a "self-certificated" basis in the hope of getting in and making a killing. Now the taxpayer will be paying for this very middle-class fraud. This inflated the market and stimulated the crazy and unsustainable rises in property values in the UK and elsewhere. The UK government behaved the same as every other government in the world and I didn't notice too many people criticising government policy 4 years ago. The real problem was the fools (including many of the great sages here) queueing up to get mortgages on overpriced property and those that helped them to do so. So you've lost nominal value on your house? Well, it's your fault and maybe you'll be a bit more realistic in future.
As for Northern Rock lending at 100% and more after nationalisation- well, that's just moronic.
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The Past
If only the banks had provided quarterly analysis of their new advances / existing outstanding balances by category on the internet.
Users would have had excellent data to base their decisions on.
Directors would have been more careful.
The Future
We need quarterly analysis of new advances / existing balances by category NOW.
The current marketing on TV suggests the banks have been sitting on their hands for the last few months.
The other illuminating quarterly analysis would be their liquidity ratios since last year and during the rescue moves by the UK Government.
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#225 newProtectorCromwell
"It is of no concern whatever to me if others do not believe what I say, or think it is harsh, or unrealistic, or whatever."
It must be difficult trying to balance perfection with modesty? The real Cromwell was less sure of himself. As Antonia Frazer wrote: ..in the end, the man of action proved to be at the mercy of the man of introspection. The one would not let the other rest."
Seriously, why go on about socialism? "It has always promised a sort of Utopia in which there is liberty, fairness, equality, fraternity and opportunity." This Labour government isn't remotely interested in socialism, whatever it might be. Most of the many "Real Labour" members I have known, didn't believe in Utopia. Socialism for them was practical measures, paid for by taxes, not borrowing.
The problem over the last nearly 30 years is that much of the population has been kidding itself (with the encouragement of politicians) that we can have the services without the taxes, and that somehow, (nearly) everyone could become rich without working because of rising property and asset prices.
OK, I accept it - you're right - that's Utopia - if not exactly Utopian.
:-)
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To: 195. At 10:03am on 21 Mar 2009, Toldyouitwould
I believe that for market econcomies to work sucssfully there must be a strong degree of free and fair competition but at the same time a strong welfare state for those who can't compete in a competitive market place and end up falling by the wayside (i.e. young people, old age pensioner's, disabled etc).
For us in the UK I would prefer to go back slightly to Government spending of GDP of around 45%, rather than the current Govt stated aim of of only 40% of GDP. So it's not too radical an approach. Perhaps the old Swedish mixed economy approach would be a good idea ?
I don't believe Govt should be in the business of producing goods or services e.g. Telecom/Utilities/Postal Services/Transport, but it should have a much stronger role in seeking to regulate those services and where appropriate provide additonal incentives/subsidies to private providers to ensure social equality and fairness throughout society e.g. subsidies to keep open rural postal services and the like.
I still believe in the current approach to a nationally funded NHS, but I'm now beginning to wonder if state education should in fact be run by private providers but still funded by the state.
At the moment this Govt's right wing laissez fair approach in all things (such as the pathetic toothless Utlities watchdog's) merely gives lip service to protecting consumers/society and as a result we're all often at the mercy of profiteering companies without any possibility of "comeback" where the population is being exploited (e.g. the twice hiked gas/electricity charges which ran up more than 50% charges over 2008, but all we get back as consumers, now that wholesale prices are back to pre 2008 levels is a pathetic 10% reduction in prices). The Govt instead of protecting consumers, is in fact colluding with private providers in massive profit taking. This is disgraceful and is not what a good Govt should be doing.
To: 198. At 10:21am on 21 Mar 2009, greyRustyJ
You've clearly not understood what I wrote, nowehere do I say "I support Labour" or Gordon Brown. I was merely pointing out how I fed up I was with people personalizing all the current economic problems onto one or two specific individuals (i.e. Gordon Brown/Alistair Darling) as if this was the true cause of our current plight.
The cause of our current problems are much broader and wider than down to two specific individuals, they and more to do with a particular model of how economies should be run (i.e. the laissez faire/free market approach) and a whole section of our society allowing that model to dictate how everything should be run within our society.
In fact it's fairly clear from my earlier statement that I do not like this current Govt, because for me, it has followed Thatcher's/free market principles too closely, and therefore to me is not a "proper" Labout Govt, it is and has been since 1997 a Tory Party in disguise (i.e. a wolf in sheep's clothing).
If you seriously think that the Tories would have performed any better since 1997 (considering they belived in exactly the same ideology as this so called "Labour" Govt), then I think you're sadly mistaken and would have been equally livid with the Tories as you are with this Govt for letting us all down and leading us into this mess.
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#263 "why are you all so annoyed about losing value in your homes?"
To be fair, I'm not sure that most people posting here are annoyed about that. The paper value of my house isn't really important to me at the moment, except as it pertains to Council Tax bands. But then I've been very fortunate to live in the same house for 26 years. I expect to be carried out in a box. (But not yet I hope! :-) )
However, I do agree with much of the thrust of your argument about society's collective greed and gullibility - encouraged from the top of course. On the other hand, people needing to relocate for professional reasons may have had little choice. They have been well and truly shafted. I certainly saw a crash and recession coming, although not the devastation it has become. But I expected the housing crash to occur in 2004/2005. What I didn't realise was that the major lenders were borrowing abroad to inflate the bubble even further at what should have been the top of the market. As you say, moronic!
Funny that the adjective "moronic" gets past the profanity filter, whereas the noun doesn't.
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Clearly, none of our present problems are the fault of Brown/Darling - it's a well-known fact that politicians are NEVER wrong
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#260 "The reality of this economire into which we are descending might be much worse than any of the world leaders - including those you assess to be more realistic - are letting on to the masses."
This is very likely true but *ALL* leaders are usually economical with the truth anyway. What is of importance is not what they say but what they do about it and how they do it. Information can be gathered from sources other than these leaders and used to verify their truth. What we need are effective actions from them and a sense of responsibility.
A sincere "mea culpa" or two wouldn't hurt either !!
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#264 "If only the banks had provided quarterly analysis of their new advances / existing outstanding balances by category on the internet.
Users would have had excellent data to base their decisions on."
That can be easily done. All the banks have to do is to jack up bank charges by 500% to pay for this service. If you work and expect to be paid a wage at the end of the week/month, then others who work also expect the same and such services don't come free !!
Alternatively, they could put this information on a subscription only site and anyone wanting/needing this information will have to pay a hefty charge for it to offset the cost of producing such information.
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To: 263. At 10:31am on 22 Mar 2009, potatolord
"So you've lost nominal value on your house? Well, it's your fault and maybe you'll be a bit more realistic in future."
I do think you're being a little harsh on homeowners here, for the record I had to buy the family home (which I'd lived in since aged 16) because my mother had passed away, I was forced with a choice of buying the home I was already living in or selling up and leaving and starting afresh someweher else. (Had to take out a mortgage to buy out my two younger sisters's share in the family home because they were already in their own homes and simply wanted their share of the inherited wealth in the home).
Effectively it was a "Hobson's Choice" for me, either leave and take out a mortgage on another over-inflated property elsewhere, or take out a mortgage on the current family home (at an over-inflated price). So either way I was in losing position.
This was in March 2007 (near enough at the peak of the housing bubble).
I knew full well that property prices were massively over-priced by at least 40% (in my opinion) at that time, but decided to take the risk of buying the family home (purely for sentimental reasons) because I feel fairly secure in my current employment and could comfortably afford the mortgage.
I do however resent your implied asumption that everyone who took out a mortgage was being greedy and playing the property ladder game (i.e. seeking to make fast and easy money), I wasn't, I just preferred to stay where I'd always lived since being a teenager, and so long as I'm still able to work and afford the mortgage I fully intend to stay for the long term in my current home, regardless of property price valuations.
Not everyone buys a home with a £ sign flashing in their eyes you know !
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I have never read such drivel.
Hindsight is such a wonderful thing and it is being employed by the majority of posters here to bash Brown and Darling.
If they are guilty of not seeing it coming then so is the whole of the City of London and the world financial system and all the amazing free market economists they employ. How else do you explain the massive losses that all the banks and hedge funds have on their books.
Winge all you like..but accept that the Conservatives allowed the banks free reign in the 80's and 90's. Labour was forced by the electorate to follw these policies or not get elected, a big mistake.
The voters got what they asked for a centre left goverment that was big business friendly. We will now probaly get a centre right goverment that is big business and banking friendly. The same mistakes will continue.
When will our voters learn that the total free market approch does not work...regulation is necessary.
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# 265 sashaclarkson
The balancing act is not one in which modesty and perfection are counter-poised; it is one where naked truth is counter-poised with make-believe. Do you know that the last thing on earth people want is the truth? They will settle for any lie you like. Just don't tell them the truth.
I've watched your posts over the weeks and I knew you had the honesty to get to your final sentence.
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Anyone in US dollars right now should get out of them fast.
Bernanke's decision to print $1tr to buy back US Treasuries is utterly disastrous. America is now on the road to a banana republic.
For those wondering where to put their money, gold is just about the only realistic solution. But if you buy it in the form of jewellery, please realise that in the east (which alone counts today) anything less than 22 carat is not regarded as gold.
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To: 272. At 12:29pm on 22 Mar 2009, sxbloke
Good post. 100% agree with you.
It's rather comforting to know I'm not the only one with such views (I'm not mad after all !).
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The Dunfermline Building Society is now in trouble. The FSA has been aware of the situation for some months now, but bizarrely have not acted sooner as it is not a big enough problem. The Treasury has said it will do "whatever it takes" but conveniently for them decline to say specifically what, as they do not comment on individual situations. The society branched out (no pun intended) into the commercial building loan sector, as the profit margins in the mortgage market were too small and are now overextended due to the fall in land prices in the sector.
The thoughts of the government in Whitehall (now that is an oxymoron!), is that it might better to put all the "troubled" building societies together as one large entity. So we will be lumbered with a building society equiivalent of a Lloyds bank Group? I do not think that Whitehall has quite grasped the concepts of mutuality, vis a vis a state bail out. The society's problems have been compounded by the need to improve the tier 1 capital ratios, as required by the FSA and B OF E.
The failure of regulation on the part of the botched Tri-Partite system now appears to be endless. Previous bloggers have waxed eloquently about mutualised as the perfect model for financial services, but if the regulatory authorities do not do the job pretty much any business model will succumb.
It is a disgraceful situation and will take a lot of time to repair.
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#261. rvpisneverinjureds wrote:
"i run an electronics company , i pay all my engineers and others in cash now, i try not using the banks"
You honestly expect us to believe that your entire workforce is happy to be paid in cash? That's ridiculous. The banks are no less safe a place to keep your money than they've ever beeen.
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272 sxbloke
When will (the majority of ) voters even know what a) free market and b) regulation is?
House prices - so long as no negative equity it's ok, my house is my home not an inflator
nevertheless I enjoy the thought that I have a house and land ( growing vegetables etc) in France
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where to put money now?
According to the Yorkshire Post, into farmland
previous recessions have seen no fall in prices, lifestyle purchase has increased value
and limited supply (on average the 'land next door' comes onto the market every 150 years) ensures
maintenance of value
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#277 rbs_temp
"The banks are no less safe a place to keep your money than they've ever been."
I Disagree.
They are significantly less safe, and also significantly less profitable, from Jo Public's viewpoint.
Plus, cash-in-hand style payments make it easier for people to 'forget' things they perhaps should tell the taxman.
Banks are less safe, because if you give your money to ABC bank, you suddenly find they've been taken over by XYZ bank, who you may not have wished to have done business with anyhow in the first place. They're also less safe because many of them are propped up by the UK Government and that, itself, could go bankrupt. On a third score, they're less safe because people just trust neither the folk running them, nor teh industry regulators. Finally, if the economire drags us down into significant civil unrest, or worse, then the banks stand a good chance of becoming primary targets.
Until the industry demonstrably cleans it's act up, people will work on the basis that the best indicator of future behaviour is past behaviour. That is, we've seen all this nonsense with Northern Rock, RBS and HBOS, so what is yet to come is likely to be just as bad if not worse.
Personally, I can see where they're coming from.
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... #254. At 07:52am on 22 Mar 2009, ishkandar wrote: "The fact that he probably comes from an IT background does tend to slant his posts rather towards that direction !!"
It is much more the IT foreground, ishkandar, although that may equate to IT's Stealthy Steganographic Underground/Virtual Overarching High Ground, such is the Serial Reluctance of Establishment Players, who have been Oft Clearly Invited, to Engage and Discuss with the Possibilities and Probabilities which NIRobotIQs and NEUKlearer HyperRadioProActivity in the CyberSpace Environment Offer. It is probably the very Pertinent fact that IT is something which their Intelligence, and even their Intelligence Services do not Control, which has them Spooked ..... but IT will not go away just because they need Educating or anything untoward which they may be engaged in, is so easily exposed and revealed by such Algorithm Base as is readily available for ProgramMING. Not that I would be suggesting such a thing, but such a thing is so easily exposed by IT NeuReal Methodologies and Special Access ProgramMING Protocols.
And it is not the obscure jargoned posts which would cause them concern and render the red pen active on public fora, moderated to support a particular agenda or government viewpoint, although the BBC is supposed to be constructively neutral surely, but the plainer speaking posts which are more widely understood .... http://tiny.cc/vemPn
And whether novel innovative Sublime ProgramMING is Extremist is something which the waffle from the Home Secretary, Jacqui Smith, this afternoon on the Politics Show, when repeatedly directly asked "What is an Extremist?" didn't answer. Until such a times as there is a definitive answer, will it always be an unsavoury and unsatisfactory subjective blunt instrument, easily and cynically abused to negative effect and destructive consequence and therefore a retrograde step. It is perhaps a disturbing sign of the Lack of Intelligence being exercised, rather than any Greater Knowledge being deployed, because it is far too much like times before in the Failed Policy of Internment of suspects in Northern Ireland at the start of the Troubles, to be anything other than another disaster in the making.
However, the door is always open to even the dimmest witted of Public Servants in the CyberSpace Sector and they can be assured that nothing spectacular will be expected of them, for so little of value is ever theirs to give and the evidence of history is awash with the mediocrity.
However the BBC can be their Beacon shining a light on new Paths and Programs Developed and Running Betas ...... well, Off Piste would describe IT CyberSpace Boffinry in AI in a QuITe Apt Cavalier Debonair Fashion.
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These comments are a pretty amazing reflection of popular self-delusion (especially the first 60 or so I read in full, some of the later ones seem more realistic). The history of this crisis will be one of irresponsibility by bankers (like the ones at Northern Rock still selling 125% mortgages), and the media letting them off the hook because a few pundits think chastising the PM for light touch regulation is more significant (apart from the odd Fred Goodwin witch-hunt). And then we'll vote in the Tories which will be like appointing Osama Bin Laden to tackle the war on terror (to borrow a joke from US economist Dean Baker about Obama appointing Larry Summers at the US Treasury).
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Not directly relevant - but still...as financial editor, in these worrying times, would you be able to ensure that the BBC Business Ticker is kept up to date (not done for weeks, just the date changes!)?
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I can't believe that Brown and Darling can have allowed this mess to happen - and every other economy in the World is in trouble so that must be their fault too! Let's get the tories back - totally against the fat cat culture those guys - the party of the people - we can expect really them to impose some shackles on the bankers - true socialists....
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#276 "Previous bloggers have waxed eloquently about mutualised as the perfect model for financial services" BUT, as you say "The society branched out (no pun intended) into the commercial building loan sector...
It sounds to me as if the management was planning a demutualisation, before it became clear that the model was flawed.
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This comment was removed because the moderators found it broke the House Rules.
#273 newProtector "the last thing on earth people want is the truth? They will settle for any lie you like. Not quite - any lie THEY like. ;-)
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#269 nafferonian
Where to put money now? Er .. in order to do what precisely?
(Frighteningly, I have come across a number of people who are converting saving accounts into cash which they are keeping, seemingly, under the metaphorical mattress).
It rather depends on the answer to the second part.
If you're looking to make a fast buck, i.e. to make significant amounts of more "money", the answer seems to be "there ain't nowhere".
If you're looking to keep your own and your families heads above water, as we sink into the economire then food, power, shelter - the basic necessities.
If you're religious, then perhaps give what you've got left to a Church, or to a monastery, or something.
Or perhaps you'd like to try to secure the future of your local community by investing in some sort of Community Company or local cooperative project?
I guess the benefit the reward that you get for your money rather depends upon you own personal Values Attitudes and Beliefs.
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#267 "The paper value of my house isn't really important to me at the moment, except as it pertains to Council Tax bands. But then I've been very fortunate to live in the same house for 26 years. I expect to be carried out in a box. (But not yet I hope! :-) )"
Similarly, I have lived in my little London hovel for the last 35 years and I, too, have carefully prepared an instant coffee jar that my ashes will be carried out in !! The fact that it got "valued" at around 400Ks just meant that I had to pay more council tax and, God forbid, the beneficiaries of my estate will have to pay more death duties !! To date, I have made no profits or losses on my little hovel since I still live in it !!
I have carefully avoided speculating in the property bubble and, thus, have avoided any of the downside !!
Perhaps that gentleman was generalising a tad and painted everyone with a broad brush.
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#283 mogblog
I fear you make the mistake of assuming that Mr Peston's eyes ever pass over the remarks of the corrspondents to this blog.
You will make more progress if you make an enquiry to the general BBC "contact us" facility.
Hope this helps.
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#290 ishkandar
As usual you are spot on. All this business about rising or falling property prices is a bit irrelevant unless you have to/need to move property.
I'm very much like you, see my property as my home, not a speculative investment opportunity. I've also been domiciled at my own No 15 for donkeys years but never thought of "taking out some of the equity" to fund a BMW or a round the world cruise.
I still find it very difficult to understand the mindset of people who did.
It's probably an age thing and a result of inherited inate intelligence from parents of a quieter age.
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It is somewhat interesting to note Robert Peston's forthright views on the economic climate and public comments about the bonuses of Clearing Bank staff - What a shame he has never chosen to publicly comment on the 10% bonuses of NORTHERN ROCK Staff since its nationalisation - Roll on 2009 - cos Im looking forward to getting 10% as a Government employee....
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#280. Sutara wrote:
"[The banks] are significantly less safe, and also significantly less profitable, from Jo Public's viewpoint.
Banks are less safe, because if you give your money to ABC bank, you suddenly find they've been taken over by XYZ bank, who you may not have wished to have done business with anyhow in the first place. They're also less safe because many of them are propped up by the UK Government and that, itself, could go bankrupt. On a third score, they're less safe because people just trust neither the folk running them, nor teh industry regulators. Finally, if the economire drags us down into significant civil unrest, or worse, then the banks stand a good chance of becoming primary targets."
None of these make your money any less safe. For goodness' sake, why are banks less safe just because people don't trust the folk running them?
Yes, the banking industry is in a mess. Yes, those running the banks have behaved shamefully - criminally, even - and there are some banks that are technically probably bankrupt.
But thanks to the government's deposit protection scheme your money is still a lot safer in a bank than it is under your mattress.
If you're paid in cash, how do you expect to pay the mortgage? Your council tax? Gas bill? Pension contributions? By taking a bag of fivers to the relevant office? How will you pay for your holiday, or your purchases on Amazon and eBay?
I don't believe for a moment that rvpisneverinjureds really is paying his staff in cash, nor that they would accept their wages that way. It's simply not feasible to conduct your life using cash in the 21st century.
The state of near-panic on this forum, over what is simply a rather bad recession, is laughable. There will be no civil unrest, the government will not go bankrupt and two years from now it will be all but forgotten.
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Short of outright government censorship there can be no justification for the delay in my #288 posting.
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I note you omit your part in the downfall by causing a 15 billion pound run on the bank.
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#172. EBAHGUM wrote:
"The reporting of the appointment of Tidjane Thiam to the head of the PRU as the first black leader of a FTSE company is little short of racist.
Shame on the BBC."
Why single out the BBC? Every media outlet from the FT to the Guardian, The Daily Mail to the Daily Mirror, carried the story. It shouldn't be news, but unfortunately it is.
#295. EBAHGUM wrote:
"Short of outright government censorship there can be no justification for the delay in my #288 posting."
Ah, another Moderation Martyr.
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#291 EBAGUM
If you want to post comments on a blog where the journalist actually reads them and occasionally responds to them on the blog (which is supposed to be the point I thought!) you should visit Paul Masons Blog on Newsnight. If you dont believe me, look for yourself.
#294 Rbs temp
''The state of near-panic on this forum, over what is simply a rather bad recession''
I seem to remember a week or two ago you posted on similar lines and called it 'just a recession'.
I note it has now, by your own phraseology become 'a rather bad recession'
I think in a month or two you will be down shifting again to a 'very bad recession' perhaps..then what?
Well after that I think you will be too embarresed to post again and will change your blog name...
Are you one of the government analysts who told Alaistair darling it was ok to budget assuming we would be in recovery by July 2009?
I will watch future posts of yours with interest :)
Jericoa
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#295
Generally speaking all you have to do to get moderated out here is to point out that Robert Peston as reported by BBC 5 live is a supporter of an organisation called ' the Common Purpose group'. Do your own research on it and wonder why there is no bigger fuss about it going on at the moment. If I elaborate more experience tells me I will get moderated out.
The last time I posted on it my post was pulled on the basis that it was 'off topic' . If that was the case they should have pulled about 25% of all the posts that day not just mine. It appeared for a few hours then disappeared, the only justifiable reason I can think of is not that it was 'off topic' but that someone specifically complained about it.
I am not the only one this sort of thing has happened to.
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As my posting at #288 at 5.34pm is still under moderation I will assume that any criticism of a named current government minister is forbidden in the future, whatever his/her identified transgressions may be.
For goodness sake, the man himself has admitted bending the rules. That's all I said he did!
That makes the whole idea of a democratic debate defunct and confirms that the BBC is just a governmental mouthpiece.
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#297 rbs_temp
Re my # 172 - point taken - and well made. Racism across the board, so little progress made for donkeys years. I obviously need to broaden my exposure to the media, which I will endeavour to do.
Re my # 297 - hopefully not a martyr, just frustrated by the fact that criticism of a named government minister (Tont McNulty) causes such an inappropriate delay.
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Surely this is going to end up with the solution adopted by previous Labour Governments (and some others) - devaluation. Reduce the value of our foreign debt by letting the pound slide, and suffer higher longer term interest rates as the payback. Managed decline, this appears to be what we are heading towards again. Higher taxation, higher inflation, and less investment in public services. We did it before by abandoning the gold standard, and again in the 60's and again in the 90's when we fell out of the ERM.
Now may be a good time to invest in Norwegian assets!
Joking aside, house prices will not fall indefinitely, some sectors have further to go possibly - these will be defined by those that inflated disproportionately such as city centre flats and buy-to-let driven assets. What distinguishes this country from the US however is the lack of land for building housing and consequently the laws of supply and demand will kick in as the fear factor in the economy eases.
In the 1990s when we had large numbers of households in negative equity, it was not long before the Times was publishing stories like "House prices to rise 66pc in next 5 years" and they were right.
As ever we will have an over-correction, then the pendulum will start to swing back.
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Entirely off topic, but with no apologies.
I hope everyone was kind to their mother today.
My off-spring certainly were. I am surrounded by floral tributes to my lovely wifes maternal attributes.
They are outstanding, and fully merit the floral tributes received.
LOL
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Nice one Robert you have pointed out quite rightly that our leaders are in fact not leading but blagging it big style. If anyone has held any doubts about qualifications for key posts in Government then the recent crisis has surely shown that senior figures in the Government and Civil Service are not qualified to hold the positions they do.I guess if they were then they would be in the City of London making a fast buck !!!
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Hairy stuff.
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#299 Looked it up - very self-important - it seems like a would-be secular Opus-Dei - worshiping Mammon I expect?
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Robert Preston:
The National Audit Office's report into the events leading up to the nationalisation of Northern Rock can be captured in three simple points, none of which will surprise you:
No, I am not that surprised with any of the findings from the N.A.O. report regarding the Northern Rock situation....
~Dennis Junior~
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#294 rbs_temp
1) "why are banks less safe just because people don't trust the folk running them?" How about, for starters, because if people don't put their money into bank accounts and bank shares and get loans and mortgages from them, then the banks get into even deeper do doos and then need to resort to ever increasingly desperate mechanisms to save their own skins. (I could add more reasons, but I don't want to labour the point).
2) "
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Sorry,
I'll continue..
2) "there are some banks that are technically probably bankrupt" - some that are very very bankrupt and still more going to the wall, globally.
3)"thanks to the government's deposit protection scheme your money is still a lot safer in a bank" - that's assuming things don't take a major nosedive and there ends up being a run on the scheme. (Nations can go bankrupt too).
4)"If you're paid in cash ...." - very easily, you walk into a Post Office, bank, or whatever and pay the bill, or perhaps you have an instant saver account into which you pay a limited amount of cash and then get counter cheques to mail to utilities and the like.
5) "There will be no civil unrest" - I would like to believe that, but the best indicator of future behaviour is past behaviour and this sort of socio-economic stress on populations usually results in civil unrest of some sort, if not worse.
6)"two years from now it will be all but forgotten" - Again, I would like to think that was true, but I suspect in two years time we'll be looking back to March 2009 and saying things such as, "and that wasn't even the tip of the iceberg" and "if only we had known then what we know now" and the like.
Over the last 18 months or so, almost every economic prediction has been revised doomwards. And some commentators suggest, that we still know very little about the true amount of toxic assets the banks have and that we still have consequences and sequels to our life on over-stretched credit to come out of the woodwork.
Finally, perhaps you would like to ask yourself just one question. Just what really makes you so sure that recovery is a realistic possibility? Just what are the hard facts to back that deduction, as opposed to persumptions and assumptions?
I'm all for optimism, but let's not lose track of reality.
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A new week and what news will lie ahead! Wednesday could be crunch day for some of the struggling retailers as their next 3 months rent is due -Millions to be paid out. Could we see the administrators busy again in a new wave?
Another announcement out of Washington today on their next step to freeing up credit - another $1 Trillion perhaps?
http://creditcrunchedoutinuk.blogspot.com/
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#329 sutara
On your first point about bank deposits I did see a report recently where billions of Pounds Sreling had been transferred from high street banks to National savings and Investments (what was the Post Office) instant savers accounts. The reason is security granted by the 100 pct guarantee offered from the Treasury rather than interest rates paid.
The high street banks has a Treasury guarantee of 25K (or was it raised to 50K?). The end result is that even the bailed out banks are struggling even more to lend either commercially or mortgages.
There really is no joined up thinking in the Treasury, FSA or B of E.
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310
sutara
I totally agree
otherwise why don't the govt tell us the true situation?
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Robert says: However, as I've said, I think we already knew that, didn't we? If he is referring to 'we' as the nation, I doubt it.
I think a major role of a free press is to accept that a substantial part of any electorate is dependent first and foremost on the competence of the First Lord of the Treasury to successfully manage the Treasury.
When he or she, irrespective of political party, bankrupts the nation's Treasury, it should be accepted that the press, on behalf of posterity will label them as major (no pun intended) failures. All prospective Prime Ministers must certainly know that their primary role is as First Lord of the Treasury and under no circumstances does a Prime Minister allow the Treasury to be bankrupted.
If a Prime Minister allows the Treasury to be bankrupted there can be no excuse.
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The banks are complaining of lack of money - money being transferred to National Savings. The building societies are complaiing of lack of money to lend.
Yet they offer savers rates of 0.1 - 1 % and lend at 4-5% even with interest rates (officially) at 0.5%
I might be old fashioned but economics 101 states that when a product is scarce (in this case money) its price goes up (i.e. interest to use it)
So: when are the rates offered by banks/ building societies going to go up?
Put is like this : This time last year interest rates were 6% and borrowing 7-8% In fact you may remember the worry that many people were going to have when coming off fixed-rate deals. However the DIFFERENTIAL between the two is only 15 - 30%.
If this was applied today then companies lending at 5% should be raising money by offering interest at 3.5 - 4%. It appears that banks are still trying to be greedy without realising it is a new ball-game. They are playing by yesterday's rules. Once it makes it worth our while to lend money to the banks then the banks will get the money to lend. Quite simple!
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This is Paul Krugman's take on why Obama's plan won't work.
http://krugman.blogs.nytimes.com/2009/03/21/more-on-the-bank-plan/
Well worth a read - as is all of his stuff. Certainly less opaque than even Pesto.
In the meantime, wikileaks is still down, so no more about the Barclays scandal.
Outlines can be found on some US sites by making an appropriate Google search. Enough to convince me that we shouldn't insure their liabilities.
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"A wide-ranging inquiry into MPs' expenses is being considered by the independent Committee on Standards in Public Life, the BBC has learned." .... http://news.bbc.co.uk/1/hi/uk_politics/7958390.stm
I think that everyone here will agree that the fact that is only just being considered rather than being immediately and transparently implemented confirms their worse fears over the moral integrity and financial probity of the Parliamentary System and its abuse of the Public Purse for Personal Collateral Enrichment/Off the Book Gains. A Nest of Vipers and Ne'erdowells in Deed, indeed.
And BBC, surely just because #308 is NEUKlearer HyperRadioProActive does not warrant you treating IT as Toxic and Sub-Prime [which surely the behaviour of the supposed guardians of democracy in the above lead-in paragraph, would surely be describing] with the witholding of its Freely Shared Intellectual Property, and I can assure you that its Copyleft Content does not infringe upon any Copyright Claim.
Is one no longer permitted to call a spade a spade on the BBC? And who would have thought to impose that onerous and perverse abomination upon free speech and for what subversive purpose, servering whom and what?
'Tis a Fools Errand and Losers'End Game to be a Puppet in such Machiavellian Plays which would Seek to Distort Reality to Present a Vile and Pernicious Fiction of Follies Discovered and Idiot Rule to Conceal them for Further Furtive Gains ........for that would be a Deeply Psychologically Flawed and Psychopathically Self-Destructive Program with only one Possible Inevitable and Inexorable Outcome.
And not one of them Good for the Mother of Parliaments and Closetted Cossetted Supporters of Manic Misdemeanours and Capital and Capitalising Crimes.
The People are Revolting against the Extremists running Riot and Rampant at the Heart of the Popular Notion of their System of Control ..... and they have Right on their Side, and Every Right to do so, and be so advised by the BBC of the Insidious Danger within, destroying the Quality of their Lives and Life itself [by Collateral InterReactive Association] ..... for a Quick Buck/Fistful of Dollars/Thirty Pieces of Silver.
As #308 Introduces, there is a New game in Town ..... and Better Beta Game 42 Play with DNA and AI in Cloud and CyberSpace Control for Virtual Reality ...... which to be Perfectly Transparently Honest with you, may Better be Played with Eastern Rule rather than in Western Rules such is the Pathetic Addiction to Corruption and the Apathy to Deal with IT even whenever it is so Obviously Much in Evidence ..... http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print
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The trouble is the most offending banks won't lie down quietly! Having been foolish enough to switch from HBOS into RBS just before the latter crashed I am now invited to buy more shares at a 50% premium to last week's market price. Are the directors still so arrogant and contemptuous that they cannot but treat shareholders as fools?
The RBS Board say that the latest share offer is to redeem the Preference shares held by HM Treasury and that the offer is underwritten by HM Treasury!! Is this sleight of hand by the government?
It's only a few months since Sir Fred Goodwin was assuring Investment houses that all was well and that RBS would be "at the back of the queue" as far as raising fresh capital was concerned. Either he didn't know what was going on at the bank of which he was in charge, or he was lying or he and the bank were "overwhelmed by events". The last explanation is, I suppose, the one we are expected to believe.
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311 - Wednesday is too far ahead for the traders in the markets, stocks across Asia and Europe rising again this morning. This is a difficult stage for active investors to play on, on one hand a lot of shares are incredibly cheap now which has 2 consequences - firstly you don't need to risk as much capital to buy them (obviously)but also it only takes a fairly small upward price movement for you to make a decent profit. This is what happened over the last two weeks where the profit-taking kicked in after 5 or 6 days of gains
Although shares are very cheap, the problem is that earnings growth in most sectors is going to be negative or marginally positive in the next twelve months, therefore one of the main 'buy' indicators is not looking so good and this could have an adverse effect on share prices.
If you don't think these are the main considerations driving share prices (forget economic fundamentals and long-term 'investment') then you aren't living in the real world.
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For the best part of last 4-6 years it has been clear to thousands that UK growth has been an artificial bubble. The growing mountain of personal debt that rose in unison with this growth somehow sidelined as unrelated while the more paranoid and critical thinkers among us siliently went unnoticed, drowned out by the governments own praise heaped upon itself for making us all better off, which we now know is code for "easy loans to buy stuff"
Brown's approach to taking a decade of credit, for too much credit, and then no responsibility for our now 'world problem' is common around the world. I often wondered why Tony Blair and Bertie Ahern (Ireland) quietly stepped down a few years ago. Not so stupid were they?
The real problem as I can see it is the total lack of respobsibility or acceptance that politicians have over the country and economy. It's like they are all in denial about having any involvement because it might ruin their chances of having their 4 year contracts renewed, sorry, I meant fair and democratic elections with plenty of choices for the electorate.
Truth is all western society's have been robbed, by ourselves with no tangible real growth in terms of society's development. We now have no pension, no savings, no secure financial system and more worryingly no real sense of just how bad it is all going to get. Troops on the streets within 2 years and curfew laws? We are only just starting to enter the darkest hour of mankinds history.
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I'd be very interested to hear exactly what the Tories would have done that would have meant that we wouldn't be in recession now and unemployment wouldn't be on the rise. They totally failed in the 80s and 90s so from where have they suddenly got an ability to manage the economy having been in opposition for such a long time? Give us some real answers and real policies and alternatives if you think you can do better!
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Shouldn't the National Audit Office have been warning? I mean, look at the name: AUDIT. What were they doing?
This whole disaster should take down a whole generation of bankers, politicians (including the opposition politicians) and civil servants and academics. None of them understood the economy about which they prate and get paid to understand.
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".....They didn't see that the architecture of the financial system was fatally unstable....." Yes! Yes, they did see it and they profited from it too!
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OK Robert here's a question for you to ask Gordon and his Communist cronies, " when will he and the Cabinet, MPs and Civil Service take a 10% pay cut to help the country out of this dire financial situation?"
oh yes, one more "and when will they start showing receipts for anything over £5 for expenses spent while working on government business?"
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"Hopelessly naive" seems to apply to the NAO if they seriously accept that Brown and Darling truly believed these things. They were all to busy taking advantage of the credit boom and trying to bluff us all was well. No, either the NAO are incompetent or they are complicit.
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