World Financial System......done

[coppercrutch]

Just as a quick aside to the 'Nobody saw this coming' nonsense. Another lie peddled by Brown on an almost daily basis. The brainwashing by this Government is frightening. More so because it actually seems to work....

 

http://timesbusiness.typepad.com/money_weblog/2008/10/10-people-who-p.html?OTC-widgets&ATTR=tolblogs

[Geoff Kilpatrick]

If, and only if, the deal between LLoyds and HBOS is cancelled, then what will the markets make of that. Suspension of the shares on the market sounds like the best plan as it will let everyone digest the news without the trademark panic moves.

 

If HBOS does not get taken over by LLoyds, and to be honest, I hope it doesn't, then I would guess that HSBC wil be standing buy.

 

Alternatively, if HBOS borrows enough from goverment to ride out crisis, could it be made viable again, but with Asda boy booted out and someone trusted taking over. Only problem is, who is trusted these days.

 

Only one other thing, please HBOS, get rid of Shane Riordan as a spokesman. He sounds like he is asleep half the time, and the other half of the time, he just sounds disinterested.

 

Given what's happened to Lloyds share price since the deal was announced, I think they'll get the biggest boost.

 

As for HBoS, they'll join Northern Wreck and Bradford & Bingley. Maybe they'll give it to Alex Salmond to manage!

[blairdin]

I have said all along I don't even think Lloyds were interested in HBOS.

 

They have been one of the more sensible banks up until now. I always questioned why they would suddenly change this at the worst possible moment. If they end up buying HBOS it will be with serious sweeteners from the Government - and I don't just mean the public ones.

 

I agree with your ideas about the great Browns plan for recovery. Only problem being this is all too much for him. He is out of his depth IMO.

 

The problem is, it will be after 2010 and the next election before this becomes apparent.

 

As for Lloyds, getting their hands on the HBOS market share is appealing. They could almost definitely afford to take on HBOS liabilities without plunging into the red if the worst happened, making it a relatively low risk strategy to gain an unhealthy control of the UK personal banking and mortgage sector. Also known as a monopoly.

 

With the gorvernment bail available to HBOS It will be a scandal if this deal is allowed to proceed now.

[shaun.lawson]

Shaun, that's the fundamental problem with British politics in my lifetime. There has been a mantra of "increase spending = better service".

 

My wife is a nurse and despite the extra cash, she sometimes had to run a ward with 25 sick kids in it with just 3 staff (including her). When she was interviewed for jobs out here they couldn't believe that.

 

The point is that politicians were afraid of asking the big question, i.e. does the NHS system actually work rather than taking the easy option of throwing money at it.

 

I agree with this. Sitting in a politics class in 1997, I remember referring to the NHS as follows:

 

"If it looks like a turkey, and it waddles like a turkey, the chances are it's a turkey".

 

As far as I was concerned, the NHS was way too far gone to be turned around; and we were in another world to that which witnessed its birth anyway. So I mentioned the French system, in which patients pay one third of the costs, and the government pays the rest; and I also suggested means testing in order to force people who could afford it to go private, so freeing up capacity.

 

These were only preliminary ideas, that's all - but at national level, the lack of real debate is, to this day, an utter embarrassment. A system based on rationing cannot possibly deliver high quality healthcare to an ever expanding, ageing population; yet the Tories are terrified of being portrayed as wanting to privatise the service, while Labour stick to the same, tired old mantra. Meanwhile, it's the patient who suffers.

 

Don't get me wrong: the idea that "increase spending = better service" was really only a logical response to the Tories' "cut spending = worse service and blackmail the public into accepting privatisation", and something clearly had to be done. Unfortunately though, our adversarial, cyclical political system lends itself to slogans and overly simplified solutions. Real, serious debate is needed on this, and on education too - but politicians are just too scared that the public aren't prepared to listen.

[shaun.lawson]

The problem is, it will be after 2010 and the next election before this becomes apparent.

As for Lloyds, getting their hands on the HBOS market share is appealing. They could almost definitely afford to take on HBOS liabilities without plunging into the red if the worst happened, making it a relatively low risk strategy to gain an unhealthy control of the UK personal banking and mortgage sector. Also known as a monopoly.

 

With the gorvernment bail available to HBOS It will be a scandal if this deal is allowed to proceed now.

 

Just as it did with John Major, of course. In 1992, the British electorate, remembering the disaster Labour had made of things when last in power, clung to nurse for fear of something worse. Major's very greyness seemed an asset at a time of recession: at least he was honourable, not slick. Unfortunately, his leadership of his party was also utterly without vision or direction - and the rest was history.

 

Gordon Brown is New Labour's John Major. He may well benefit from economic circumstances to win a fourth term in office - but what then? History repeats itself, first as tragedy, then as farce. I've long believed it isn't in Labour's interests to win the next election: they need to renew, and rediscover themselves. But if they win, the public will be so sick of them by 2015 that they could end up as destroyed at the polls as Major's Tories were in 1997.

[Geoff Kilpatrick]

I agree with this. Sitting in a politics class in 1997, I remember referring to the NHS as follows:

 

"If it looks like a turkey, and it waddles like a turkey, the chances are it's a turkey".

 

As far as I was concerned, the NHS was way too far gone to be turned around; and we were in another world to that which witnessed its birth anyway. So I mentioned the French system, in which patients pay one third of the costs, and the government pays the rest; and I also suggested means testing in order to force people who could afford it to go private, so freeing up capacity.

 

These were only preliminary ideas, that's all - but at national level, the lack of real debate is, to this day, an utter embarrassment. A system based on rationing cannot possibly deliver high quality healthcare to an ever expanding, ageing population; yet the Tories are terrified of being portrayed as wanting to privatise the service, while Labour stick to the same, tired old mantra. Meanwhile, it's the patient who suffers.

 

Don't get me wrong: the idea that "increase spending = better service" was really only a logical response to the Tories' "cut spending = worse service and blackmail the public into accepting privatisation", and something clearly had to be done. Unfortunately though, our adversarial, cyclical political system lends itself to slogans and overly simplified solutions. Real, serious debate is needed on this, and on education too - but politicians are just too scared that the public aren't prepared to listen.

 

Given some of the responses made to the potential 500bn bailout of the banks on the BBC news were along the lines of "Why can't they do that for the NHS?" summed that up for me.

 

There's a general malaise in the British populous that HMG is awash with cash and "they should pay for it". Financial education should be mandatory in schools.

[coppercrutch]

Financial education should be mandatory in schools.

 

I think there is a reason for that. Financial ignorance leads to people that are easy to control. Debt leads to control. Just keep the public thinking that knowing **** all about finances and getting into debt as a matter of course is the normal way.

 

Then you control them.

[Geoff Kilpatrick]

I think there is a reason for that. Financial ignorance leads to people that are easy to control. Debt leads to control. Just keep the public thinking that knowing **** all about finances and getting into debt as a matter of course is the normal way.

 

Then you control them.

 

That's mince! Economics and business studies would be banned from schools if that was the case.

[Maximus]

I think there is a reason for that. Financial ignorance leads to people that are easy to control. Debt leads to control. Just keep the public thinking that knowing **** all about finances and getting into debt as a matter of course is the normal way.

 

Then you control them.

True. It's so bloomin obvious ain't it!

 

Notice how the media is being used as a tool to fuel panic ATM. We're being brainwashed into a constant state of fear.

 

Charlie Brooker got it spot on when he mocked the coverage of the Northern Rock collapse....Dramatic drum beat, headline; 'Government calls for calm' show line of folk waiting to withdraw their cash - subliminal message - PANIC, PANIC, PANIC . Then again that is no real surprise, when you look at who controls most of our mass media.

[shaun.lawson]

I think there is a reason for that. Financial ignorance leads to people that are easy to control. Debt leads to control. Just keep the public thinking that knowing **** all about finances and getting into debt as a matter of course is the normal way.

 

Then you control them.

 

Hardly, CC. I think it's more that finance and economics are just bloody difficult to understand. My doctorate is on politics in 1820s Britain; and about two people in the Palace of Westminster had a clue about economics even then!

[Jammy T]

Not one for a conspirancy theory, but could Brown have known fine well what was going to happen, but he lets things get worse and then bails out economy. Already public opinion puts labour party as the party to trust and gives them chance of winning election again.

 

Surely he wouldn't do that, but then again, he will do 'whatever it takes'.

 

Quite a few people knew fine well this was going to happen

 

Too late now, but Boom and Bust : The depression of 2010 is one such book - well the title is something like this.

 

I think the first edition was published in 2003, has just about nailed everything that is happening.

 

Even just a basic economic magazine I subscribe to - Moneyweek - nailed all this at least 18 months ago

 

Problem is, you get people speaking negatively about a situation continually they become an easy target for those in denial

 

I'll give you an example, outwith, say Hearts - there has been a guy on a financial messageboard that was warning for since at least last august that RBS would be under ?1 a share soon enough. Now remember RBS was ?6 at the time.

 

He got abused, ridiculed and hounded off the board. He kept telling people not to average down, not to think ?4 was a bargain ?3 wasnt a bargain either.....

[Jammy T]

This mess could be the thing that saves or buries Broon.

 

If he somehow gets us out of this mess (for which he shares the blame for), he may just sneak a wee win in the next election.

 

If he called an election for within the next 3 months I think he'd win.

 

I think we are due a classic relief rally, that people will think means we've won the battle and things have sorted themselves out. It wont have - we should still hit the very low 3000 FTSE IMO and about 5000 DOW

 

If he waits beyond, say March next year he's donald ducked. As we will all be.

 

Oh, also, I'll put a small wager on $200 per barrell oil within 18 months

[Ulysses]

Oh, also, I'll put a small wager on $200 per barrell oil within 18 months

 

That one interests me. Why do you think this?

[Geoff Kilpatrick]

According to the Times, RBS is getting 20bn!

 

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4932250.ece

 

Scottish banking, as we know it, is finished.

[davemclaren]

According to the Times, RBS is getting 20bn!

 

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4932250.ece

 

Scottish banking, as we know it, is finished.

 

The irony is that, 20 years ago, Scottish banks had the reputation of being the safest and most conservative. Times change....

[Jammy T]

That one interests me. Why do you think this?

 

2 things

 

I think there will be general deflation for around the next 6 months

 

I also think, bizarrely, the dollar will strengthen simply by virtue of the fact that all the other countries will simply do much worse (there is an argument to say that whilst the US is pretty fecked, the debt situ in Britain and Euroland is worse)

 

So if we deflate (eg commodities going down because nobody is making, moving or building anything) AND the dollar strengthens then the price of these things - oil metals industrials etc will go down initially

 

However, basically medium to long term the dollar is goosed. Eventually this mass bailout and secret printing of more and more dollars will be sussed (I think it already is, but the world still needs the dollar to be relatively strong in this uncertain phase of things) and we'll get inflation with a small risk of hyperinflation - from at a guess 3rd quarter next year

 

For every 10 percent the dollar goes down, everything priced in dollars will go up by roughly an equal amount, even if they are not being used as much due to a recession. You could see the dollar half in value which could see Oil double in value

 

I dont think the dollar will be the world's reserve currency at the end of all of this, but before that oil will soar IMO

 

Also OPEC wont allow oil at this level for too long, and there are arguments to say that oil production at this level isnt really profitable enough, therefore production will go down, which reduces surpluses which increases price.

 

There is a chance we go below 70$ first.

[Ulysses]

 

However, basically medium to long term the dollar is goosed. Eventually this mass bailout and secret printing of more and more dollars will be sussed (I think it already is, but the world still needs the dollar to be relatively strong in this uncertain phase of things) and we'll get inflation with a small risk of hyperinflation - from at a guess 3rd quarter next year

 

For every 10 percent the dollar goes down, everything priced in dollars will go up by roughly an equal amount, even if they are not being used as much due to a recession. You could see the dollar half in value which could see Oil double in value

 

It's an interesting argument, but it assumes that the euro and the pound sterling will rise in value - and they are at much risk as the dollar.

 

It will also be interesting to see what happens to the Chinese economy over the next couple of years. The Chinese economic "miracle" has been fuelled by three things. One is the artificially low value of the renminbi relative to the dollar - but if the dollar falls again the capacity of the Chinese to keep buying dollars to hold down the renminbi's value will be severely tested. In any case, the policy is causing excessive inflation in China. The second is exporting for increased consumer demand - but that's not going to yield much by way of growth. But it is the third factor that has the potential to cause China to implode. Most of the growth in China's economy has been fuelled by reinvestment, underwritten by loans to Chinese businesses (owned by the Chinese Communist Party) by Chinese banks (owned by the Chinese Communist Party) that are even more insolvent than banks in the West.

[Boaby Ewing]

Interesting argument Jammy T that I won't disagree with outright, but I will stick in a few caveats.

 

2 things

 

I think there will be general deflation for around the next 6 months.

 

 

Agree, but I think the time frame could be longer. 6 months looks optimistic (for the world economy in general -- not many people want to see $200 oil).

 

 

I also think, bizarrely, the dollar will strengthen simply by virtue of the fact that all the other countries will simply do much worse (there is an argument to say that whilst the US is pretty fecked, the debt situ in Britain and Euroland is worse)

 

 

Agree largely on the dollar's direction (versus the major currencies anyway) but the debt situation is less clear -- the dollar's strengthened in part as a result of money flowing back to the world's largest economy/the earlier perception that this crisis would largely hit those economies under the 'Anglo-Saxon' model. Now it's clear most major and not so major economies are going to be hit, their needs to be a rebalancing to reflect that the dollar's relative weakness versus other major currencies over the 18-months to July was perhaps overblown.

 

So if we deflate (eg commodities going down because nobody is making, moving or building anything) AND the dollar strengthens then the price of these things - oil metals industrials etc will go down initially

 

However, basically medium to long term the dollar is goosed. Eventually this mass bailout and secret printing of more and more dollars will be sussed (I think it already is, but the world still needs the dollar to be relatively strong in this uncertain phase of things) and we'll get inflation with a small risk of hyperinflation - from at a guess 3rd quarter next year

 

For every 10 percent the dollar goes down, everything priced in dollars will go up by roughly an equal amount, even if they are not being used as much due to a recession. You could see the dollar half in value which could see Oil double in value

 

I dont think the dollar will be the world's reserve currency at the end of all of this, but before that oil will soar IMO

 

Possibly -- the petrodollar game is always an interesting one. The inverse correlation you've described certainly plays a role, but it also feeds into what Opec does (whose majority of members get their payments in dollars... but import other essential goods in different currencies -- so dollar weakness is a double whammy). So yeah, they're more likely to let the price of all run-up when the dollar is weak.

 

As for the dollar's reserve currency status, how that feeds into oil gets a bit chicken and egg. If the dollar stops being the world's reserve currency as a result of this crisis, will Opec et al continue to price oil in dollars (Iran already don't)?

 

Or what would happen to the dollar if Opec moved away from pricing oil in dollars? (Admittedly unlikely at this stage, as big players like Saudi peg their currency to the greenback... and hold a shiiiiit load of T-bills... so they don't want to see the dollar collapse).

 

Also OPEC wont allow oil at this level for too long, and there are arguments to say that oil production at this level isnt really profitable enough, therefore production will go down, which reduces surpluses which increases price.

 

There is a chance we go below 70$ first.

 

Opec are already moving due to the sharp fall in prices -- there will almost certainly be an official production cut at this emergency November meeting they've called. However, I don't think there's a barrel of oil currently coming out of the ground which isn't profitable at $70. But they obviously want to enhance profits. Though even below $50 is a possibility.

 

Whether we're storing up problems for the future with crude around $70... well then quite possibly. But I think your timeframe is too small.

 

I also think we'll see a sharp contraction in US demand over the next 1-3 years which will be maintained after that -- the shock of gas above $4 a gallon will lead to smaller, more efficient cars etc... but that takes a long time to feed through.

 

The drop in US demand so far has largely just been people choosing to drive less.

 

Added to that, it'll be interesting to see if a lot of investment money gets pulled out of commodities (some argue "passive" long only money has an impact on prices, others say it doesn't... I lean towards the former). The whole justification for commodities being seen as another asset class was their diversification from equities... but a lot of pension funds will have been badly burnt over the last few months when they were relatively new to the game.

[Geoff Kilpatrick]

Will be interesting to see how HMG, as a shareholder, deals with the superfluous jobs in the banks it owns as the UK hurtles towards being officially in recession.

[Stuart Lyon]

I stay opposite Sir Freddie Goodwin and a handful of media people have been waiting to photograph/interview him since early this morning. Police have paid a fleeting visit too.

[Geoff Kilpatrick]

I stay opposite Sir Freddie Goodwin and a handful of media people have been waiting to photograph/interview him since early this morning. Police have paid a fleeting visit too.

 

Pity they aren't able to put him in handcuffs!

[Stuart Lyon]

Don't recall people criticising him when things were good.

[Geoff Kilpatrick]

Don't recall people criticising him when things were good.

 

I think that's slightly untrue. He's made a lot of enemies!

 

To be fair, his strategy for RBS worked but his ego got in the way of the ABN Amro debacle and it's why RBS now belongs to the UK Government.

[Dagger Is Back]

I think that's slightly untrue. He's made a lot of enemies!

 

To be fair, his strategy for RBS worked but his ego got in the way of the ABN Amro debacle and it's why RBS now belongs to the UK Government.

 

Spot on mate - he HAS made a lot of enemies at all levels.

 

The ABN debacle as you put it, WAS fuelled entirely by his ego. He made a massive mistake and remember this is the guy who recently took ?12BN from shareholders to prop up RBS.

 

This mornings confirmation shows us just how bad a position RBS are in.

 

Thing is he is sitting pretty - it's the employees and those who have an interest in their shares I feel sorry for. Reduced capital value and dividends that some folks have worked long and hard to secure.

 

Shame on you Sir Fred.

[Geoff Kilpatrick]

 

Apparently, the government has insisted that mortgage lending should return to "2007 levels" as part of this bail-out!

 

So, let's imagine the first time buyer saving up for a house (who may have ginger hair and lives with their parents!)

 

This person has been saving up and is spooked by banks failing left, right and centre with their savings.

 

He or she now finds that in an effort to prop up the mortgage market, his tax will be used instead, keeping him off the property ladder!

 

[Rawrrrrrrr]

60% of RBS

40% of Hbos/Tsb

 

Didnt imagine the bail out would be that major

 

When they return to profitability we better not be getting tax increases:p

[Csaba's Broon Shoes]

So, let's imagine the first time buyer saving up for a house (who may have ginger hair

 

That is well out of order

[coppercrutch]

That's mince! Economics and business studies would be banned from schools if that was the case.

 

Hardly, CC. I think it's more that finance and economics are just bloody difficult to understand. My doctorate is on politics in 1820s Britain; and about two people in the Palace of Westminster had a clue about economics even then!

 

I actually think much of economics and finance is pretty simple to understamd. When it is explained in a simple manner.

I think it is made to sound really complicated and difficult so people just don't even bother. I have explained a few simple things about this to various people that previoulsy didn't understand the basics. It doesn't take long to get a basic grasp of it. If I can get a good handle on it anyone can.

 

Don't recall people criticising him when things were good.

 

Things were never that good. They just appeared that way. RBS announced record profit and record turnover less than 7 months ago. Since then they have begged fior almost 40 billion pounds simply to stay afloat. It was all a scam.

 

 

Apparently, the government has insisted that mortgage lending should return to "2007 levels" as part of this bail-out!

 

So, let's imagine the first time buyer saving up for a house (who may have ginger hair and lives with their parents!)

 

This person has been saving up and is spooked by banks failing left, right and centre with their savings.

 

He or she now finds that in an effort to prop up the mortgage market, his tax will be used instead, keeping him off the property ladder!

 

 

Heard that myself. I imagine this is just window dressing by Brown. If he is being serious then it truly shows just how delusional the man is. The problem is debt. The solution is not more debt.

 

If there was ever a more appropriate time for 'Its' not rocket science' this is it.

 

I really can't see how they can do this. However if they do it will be the ned of this nation at the expense of Brown getting re-elected in 2 years time.

 

If we start to increase debt again on top of everything that is there already our currency will collapse. We will be talking Iceland style.

 

As I have always said I will only consider buying a house if it is a reasonable price. If Brown manages to stave that off in the short term, and I still think it is unlikely but not impossible, the long term consequences will be unbelievable.

 

The whole problem with HBOS and RBS was based on too much mortgage debt. If his solution is to insist that they create more mortgage backed debt then I will be looking to leave this country ASAP.

 

I don't think people truly understand what this sort of action will result in.

 

Don’t you just love this country !! Not.

 

Geoff being serious for a second do you really think it is amusing that this country is being sytematically ****ed up to keep Gordon Browns ego intact ? That hard working sensible people are being ****ed over left right and centre to pay for people who are idiots ?

 

You seem a fairly sensible chap - you can’t actually think that !!??

 

Although you are in Oz so you probably don’t care.

[Geoff Kilpatrick]

I actually think much of economics and finance is pretty simple to understamd. When it is explained in a simple manner.

I think it is made to sound really complicated and difficult so people just don't even bother. I have explained a few simple things about this to various people that previoulsy didn't understand the basics. It doesn't take long to get a basic grasp of it. If I can get a good handle on it anyone can.

 

 

 

Things were never that good. They just appeared that way. RBS announced record profit and record turnover less than 7 months ago. Since then they have begged fior almost 40 billion pounds simply to stay afloat. It was all a scam.

 

 

 

Heard that myself. I imagine this is just window dressing by Brown. If he is being serious then it truly shows just how delusional the man is. The problem is debt. The solution is not more debt.

 

If there was ever a more appropriate time for 'Its' not rocket science' this is it.

 

I really can't see how they can do this. However if they do it will be the ned of this nation at the expense of Brown getting re-elected in 2 years time.

 

If we start to increase debt again on top of everything that is there already our currency will collapse. We will be talking Iceland style.

 

As I have always said I will only consider buying a house if it is a reasonable price. If Brown manages to stave that off in the short term, and I still think it is unlikely but not impossible, the long term consequences will be unbelievable.

 

The whole problem with HBOS and RBS was based on too much mortgage debt. If his solution is to insist that they create more mortgage backed debt then I will be looking to leave this country ASAP.

 

I don't think people truly understand what this sort of action will result in.

 

Don?t you just love this country !! Not.

 

Geoff being serious for a second do you really think it is amusing that this country is being sytematically ****ed up to keep Gordon Browns ego intact ? That hard working sensible people are being ****e dover left rigth and centre to pay for people who are idiots ?

You seem a fairly sensible chap - you can?t actually think that !!??

 

Although you are in Oz so you probably don?t care.

 

No I don't. While I think this bailout is the only option available, the idea of ensuring mortgage lending back to 2007 levels is utterly stupid! It might save Phil and Kirsty's career but that is about it.

 

The thing is that you will get people thinking "oh, maybe it is time to buy again". The thing they aren't talking about (the politicians that is) is UNEMPLOYMENT and that is what will affect house prices more than anything else!

[Coco]

Brown will be desperate to try to reflate the burst housing bubble. Most people will judge him on his economic competence on 2 main things 1) whether they have a job and 2) their house price. The action on trying to maintain peak bubble era mortgage lending is an attempt to try to blow up the burst balloon.

 

Banks will just have to reduce their assets in other areas - perhaps commercial property lending in the UK would be one main area.

[footieman]

I wonder what the SNP make of the fact the countries two biggest banks have had to go cap in hand to the government to seek ?30+ billion to stay afloat, what would have happened if we were an independent nation. Iceland MkII anybody!!!

[Geoff Kilpatrick]

So, let's imagine the first time buyer saving up for a house (who may have ginger hair

 

That is well out of order

 

It's a "in-joke", referring to coppercrutch.

[Geoff Kilpatrick]

I wonder what the SNP make of the fact the countries two biggest banks have had to go cap in hand to the government to seek ?30+ billion to stay afloat, what would have happened if we were an independent nation. Iceland MkII anybody!!!

 

Red herring!

 

Iceland was ran as a hedge fund - the whole country! It blew up when they bet on black and it came up red.

 

However, Salmond couldn't have nationalised the banks without the UK's say so even if Scotland were independent because there was no separate Scottish currency in SNP land. Ireland HAD to do it with the euro and got hammered by the rest of Europe for doing so because all of their banks were teetering on the brink. This is because they needed higher interest rates a long time ago and never got them, hence they had a runaway boom that had to hit the buffers big style.

[Geoff Kilpatrick]

Thinking about this a bit more....

 

These measures will thaw the wholesale money markets where banks lend to each other.

 

However, there is no way that the investment banks will (or should) be allowed to create a greater supply in this market from securitising debt on debt. Therefore the supply of money will be more limited than it was although LIBOR will start to move towards its usual levels.

 

So, the question is, how much will central banks cut interest rates to 'mitigate' the recessionary impacts? Meaning that there is no value whatsoever in investing in deposits because real interest rates are negative. So, if deposits head back to the equity markets, coupled with consumers paying down debt, the banks are headed in the same direction as before viz. needing more and more from the wholesale markets.

 

Deja vu all over again.

[footieman]

Red herring!

 

Iceland was ran as a hedge fund - the whole country! It blew up when they bet on black and it came up red.

 

However, Salmond couldn't have nationalised the banks without the UK's say so even if Scotland were independent because there was no separate Scottish currency in SNP land. Ireland HAD to do it with the euro and got hammered by the rest of Europe for doing so because all of their banks were teetering on the brink. This is because they needed higher interest rates a long time ago and never got them, hence they had a runaway boom that had to hit the buffers big style.

 

So basically Salmond would have had to go cap in hand to the British Government and asked for help. That would have been an interesting conversation.

[jambos are go!]

A Labour Governement has virtually nationalised the Banks to a roar of approval all round the national, global and political spectrum. I swear I can hear Keir Hardie sing 'free at last' in the background.

[coppercrutch]

No I don't. While I think this bailout is the only option available, the idea of ensuring mortgage lending back to 2007 levels is utterly stupid! It might save Phil and Kirsty's career but that is about it.

 

The thing is that you will get people thinking "oh, maybe it is time to buy again". The thing they aren't talking about (the politicians that is) is UNEMPLOYMENT and that is what will affect house prices more than anything else!

 

Agree about unemployment. Only just started really. Going to be nasty as more and more of us are chasing fewer jobs?

 

As for the ideas about 2007 I suppose the devil is in the detail. The actual treasury comment states 'homeowners' so maybe they are just tryign to ensure people can remortgage for decnt rates. I think that is reasonable depending on how everything goes. As long as lending is kept sensible then we are on the correct route out of this mess - if there is one !!

 

Seems there is a bit of a backlash already to the overall 2007 idea. From the Council of mortgage lenders no less??

 

http://news.bbc.co.uk/1/hi/business/7667072.stm

 

They have said this is not "prudent or desirable".

 

When the CML, who have been one of the biggest rampers of recent times, says something like that you know the game is up.

 

Let's hope Broon is not quite as mental as he seems?.

 

I seriously have no idea where this is all going. I don't think anybody does !!

[shaun.lawson]

Today, Paul Krugman of Princeton University won the Nobel Prize for Economics. And in his regular, and much respected New York Times column, he has had this to say about Gordon Brown:

 

http://www.nytimes.com/2008/10/13/opinion/13krugman.html?_r=1&th&emc=th&oref=slogin

 

Has he been 'hoodwinked' too, coppercrutch?

[Boris]

Today, Paul Krugman of Princeton University won the Nobel Prize for Economics. And in his regular, and much respected New York Times column, he has had this to say about Gordon Brown:

 

http://www.nytimes.com/2008/10/13/opinion/13krugman.html?_r=1&th&emc=th&oref=slogin

 

Has he been 'hoodwinked' too, coppercrutch?

 

Makes you proud to be British!

 

That article would bring a tear to a glass eye (apologies to Mr Brown for that one...)

[jambos are go!]

Today, Paul Krugman of Princeton University won the Nobel Prize for Economics. And in his regular, and much respected New York Times column, he has had this to say about Gordon Brown:

 

http://www.nytimes.com/2008/10/13/opinion/13krugman.html?_r=1&th&emc=th&oref=slogin

 

Has he been 'hoodwinked' too, coppercrutch?

 

Moved with 'stunning speed' to the 'heart of the problem'. So much for the ditherer. The 10p tax row and Nothern Rock seem puny issues now. Is he the new Lloyd George and successor to John Maynard Keynes? Will he emerge as the towering figure in world politics. Does a Nobel Prize beckon?

 

They'll be writing biographies about this 'flawed' genius for decades and centuries IMO. Hope I'm right.

[wibble]

I'm hearing that the exposure to Derivative losses makes the sub-prime fiasco look like small change.

 

Is it true that losses on derivatives now total Quadrillions!!

 

I think Boris and Marx is now our only salvation.

[Boris]

 

I think Boris and Marx is now our only salvation.

 

Da Tovarich!

[Jammy T]

I'm hearing that the exposure to Derivative losses makes the sub-prime fiasco look like small change.

 

Is it true that losses on derivatives now total Quadrillions!!

 

I think Boris and Marx is now our only salvation.

 

I think they (being economic commentators NOT in denial) estimated the sub-prime loss to be around $1 trn.

 

The minimum Credit Default Swap exposure is estimated to be around $50 trn.

 

Its a house of cards mate. A complete global economy and financial system built on sand.

[Era Macaroons]

Its not all bad....I sold my flat in Dalry today....full asking price:)

 

my mate sold his the week before full asking price.

[coppercrutch]

Today, Paul Krugman of Princeton University won the Nobel Prize for Economics. And in his regular, and much respected New York Times column, he has had this to say about Gordon Brown:

 

http://www.nytimes.com/2008/10/13/opinion/13krugman.html?_r=1&th&emc=th&oref=slogin

 

Has he been 'hoodwinked' too, coppercrutch?

 

Yes. Have a look what Broon the genius is saying now...

 

http://news.bbc.co.uk/1/hi/uk_politics/7667284.stm

 

"He said the UK problem was not shortage of demand for homes at "the right prices" but a shortage of mortgages "at the right prices for people to buy".

 

Ah so it has nothing to do with the price of the house does it Mr Broon...

 

It is all to do with the mortgage. Ahhh now I see !! How stupid can I be !!

 

The problem with the Ferrari I want to buy is not the 160k price tag it is the fact lenders are being so selfish in not lending me the money !!

 

How could I have been so dumb......

 

The guy has lost it. He has no clue. I actually think he believes what he says. That is the really scary thing. Actually the really scary thing is how so many people have fallen for it.

 

Wow - so he has decided to go with the final straw, Nationalising the banks as there is ABSOLUTELY NOTHING ELSE left to do.

 

How so many people think that is a genius plan is beyond me. It is the only plan at the present moment to stop the banks going bust.

 

It is one final plan that has been voiced by many economists for a long , ong time.

 

FFS I think I even voiced the idea that all our banks could be nationalised months and months ago. So does that make me the new Economic wonder PM of the century does it...

 

As for the article above it just shows that clearly intelligent people can be easily persuaded also.

 

"Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis"

 

Clearly this guy hasn't bothered to check why the UK is in such a mess in the first place.

[Malinga the Swinga]

Things that worry me, or would if I was a cynic.

 

1) SNP on the rise in Scotland and Labour need a political boost. Well would you believe it, here we have one and it's caused a 20% swing in polls already

 

2) Out of banks that cannot be allowed to fail, a Scottish bank is being sold to an English bank at a knockdown price, with little or no regard for shareholders, customers or staff. The week after, plan to save banks is announced, but too late for HBOS. Why not provide solution a week quicker.

 

3) English banks bailed out the same trouble, borrow from goverment, yet mysteriously, share prices remain higher and they do not get into trouble, and are allowed to buy Scottish Bank

 

4) LLoyds allowed to reduce offer despite frequent assurances that the price was not negotiable and that deal was secure. Why not ask foreign banks if they were interested in takeover and sell by auction. Perhaps because deals cut against law and arranged with backhanders.

 

5) Scotland a lost cause to SNP so sacrifice banks there, but protect Engklish ones as Labout need to strike back in England where majority of seats in parliament are.

 

5) Goverment lends Iceland ?100 million, yet would not act quicker to save HBOS

 

6) Mandelson comes back, gets into House of Lords, receives new salary for being in goverment, yet still gets pay from European Union. Nose in the trough or what.

 

7) Gordon Brown is actually enjoying seeing this happen. Could it be because he had solution arranged already to suit him.

 

8) European govt guarantees no bank will be allowed to fail, but goverment and LLoyds arrange for deal to go through as it is a once in a lifetime chance for LLoyds to grab a rival.

 

9) Several analysts and others predicted this would happen months, if not years ago. It is inconcevable that goverment advisors were not aware of what was happening, yet they choose to ignore it. prehaps they were paid for their silence.

 

10) No investigation by FSA as to who is responsible for this. Compare to US where they have dragged Lehman Brothers chief through gutter and are already investigating if possible fraud has been committed. The FSA are part of Labour authorities and have no interest in finding out who did what, they already know and are happy as things are.

 

11) Labour goverment have now achieved what they always wanted and have seat in 2 boards of banks. What's the betting in 5 years, when things mah have got better, that the directors appoint Brown and Darling to their boards as reward for help. Nice way of assuring their pensions get bigger whilst ours get smaller.

[coppercrutch]

It seems Brown has truly lost his marbles....

 

http://news.bbc.co.uk/1/hi/uk_politics/7666695.stm

 

"Our action is driven by our values. For this government, and I believe the whole country, the guiding idea is fair reward for hard work, effort and enterprise, not incentives for irresponsibility or excessive risk-taking for which the rest of us have paid."

 

What planet has this guy been on for the last 10 years ? He is either certifiable or the World's most disgusting blatant liar. He has presided over the biggest debt and greed driven period in recent British history. Now he warns about excessive risk taking...

 

As I have said before. The public are being hoodwinked by this fraudster. I suppose he is at least good at one thing.

[shaun.lawson]

It seems Brown has truly lost his marbles....

 

http://news.bbc.co.uk/1/hi/uk_politics/7666695.stm

 

"Our action is driven by our values. For this government, and I believe the whole country, the guiding idea is fair reward for hard work, effort and enterprise, not incentives for irresponsibility or excessive risk-taking for which the rest of us have paid."

 

What planet has this guy been on for the last 10 years ? He is either certifiable or the World's most disgusting blatant liar. He has presided over the biggest debt and greed driven period in recent British history. Now he warns about excessive risk taking...

 

As I have said before. The public are being hoodwinked by this fraudster. I suppose he is at least good at one thing.

 

So leaders have no right to heed lessons and change tack midstream, then? I must remember to tell that to the generals in Iraq.

[shaun.lawson]

Yes. Have a look what Broon the genius is saying now...

 

http://news.bbc.co.uk/1/hi/uk_politics/7667284.stm

 

"He said the UK problem was not shortage of demand for homes at "the right prices" but a shortage of mortgages "at the right prices for people to buy".

 

Ah so it has nothing to do with the price of the house does it Mr Broon...

 

It is all to do with the mortgage. Ahhh now I see !! How stupid can I be !!

 

The problem with the Ferrari I want to buy is not the 160k price tag it is the fact lenders are being so selfish in not lending me the money !!

 

How could I have been so dumb......

 

The guy has lost it. He has no clue. I actually think he believes what he says. That is the really scary thing. Actually the really scary thing is how so many people have fallen for it.

 

Wow - so he has decided to go with the final straw, Nationalising the banks as there is ABSOLUTELY NOTHING ELSE left to do.

 

How so many people think that is a genius plan is beyond me. It is the only plan at the present moment to stop the banks going bust.

 

It is one final plan that has been voiced by many economists for a long , ong time.

 

FFS I think I even voiced the idea that all our banks could be nationalised months and months ago. So does that make me the new Economic wonder PM of the century does it...

 

As for the article above it just shows that clearly intelligent people can be easily persuaded also.

 

"Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis"

 

Clearly this guy hasn't bothered to check why the UK is in such a mess in the first place.

 

So glad to see you're apparently smarter than the winner of the Nobel Prize for Economics, CC.

 

Yes, house prices are still too high. But if there's to be any kind of recovery, there must be credit and liquidity in the system! I was talking with another Kickbacker who's based on the US West coast yesterday. He told me that over there, things are grim. Grim. Nobody can get a loan for anything. Nobody's being paid on time; and being paid 'up front' now means about 25% of what you're owed, 60 or 90 days later. Employers can't make payroll. Pensions are disappearing all over the place. And so on, and so on.

 

You can expect some of this to head our way too. Brown knows the desperate importance of credit being available, if this isn't to turn into an out-and-out catastrophe for the real economy. He's been praised all over Europe as well as in the US for his actions - and rightly so.

[Munch]

It seems Brown has truly lost his marbles....

 

http://news.bbc.co.uk/1/hi/uk_politics/7666695.stm

 

"Our action is driven by our values. For this government, and I believe the whole country, the guiding idea is fair reward for hard work, effort and enterprise, not incentives for irresponsibility or excessive risk-taking for which the rest of us have paid."

 

What planet has this guy been on for the last 10 years ? He is either certifiable or the World's most disgusting blatant liar. He has presided over the biggest debt and greed driven period in recent British history. Now he warns about excessive risk taking...

 

As I have said before. The public are being hoodwinked by this fraudsters. I suppose he is at least good at one thing.

 

He is being talked about as if he is a hero, bigger than Winston Churchhill, the Media are saying his business model is being embraced by every other nation in the world.

 

You would not believe this, but he has pulled a rabbit out a hat, opinion polls are showing a 25% improvement in his poll ratings already.

 

I Also don't know what is going on but i know of 2 people who sold there flats last Friday 3 bids on each one, both sold for full bl--Day market value.

 

This is not good news for my plan i need another 25% drop for it to work, also Brown has instigated a string to his bail out that the lenders must lend again to kick on the damn market.

 

Its bottomed out too soon for me.