Thursday, October 09, 2008
Were you bovvered?
Did you feel like heading for the hills or did you just shrug? A Times poll taken even before yesterday’s mega rescue plan suggests that “on the brink ” panic was held at bay. “56 per cent in Britain, and 51 per cent in America, say they are not worried. Women are a bit more worried about the safety of their savings than men, 41 to 33 per cent.” Judging from the near-zero response to the crisis from Sluggerites, I guess many people were feeling fatalistic. After all, they’ve a lot more to worry about than mere money.. like ...ah… The tabloids have decided to look on the bright side, the Sun stressing cheaper mortgages and the benign effects of tumbling house prices as a result of “Thunderbird’s look-alike Alisitair Darling’s international rescue effort.” The Mail warns about the effect of a sluggish stock market on pensions but their columnist Stephen Glover has his own view of the bright side: fewer immigrants competing for British jobs, cheaper football, maybe and “The recession should be good for Great Britain. The Scots, a naturally cautious race, may ignore the blandishments of Alex Salmond and the Scottish Nationalists, and consider the perilous fate of small countries such as Iceland and even Ireland during a global slowdown. Better be part of a large country weathering the storms than a vulnerable tiny nation buffeted about by them.” Meanwhile...
In the eye of the storm, amazingly the good cheer was even infecting gloomy Gordon who was having his best day for years. You could see he was happy inside his own skin. Will it last? Peter Riddell in the Times intones: “ The rescue is about saving capitalism, not replacing it with socialism….. This muddies the ideological divide and, as yesterday showed, makes it easier for Gordon Brown, at his most commanding, to handle than for David Cameron. But a recession will be much harder for Mr Brown”. As I would expect, Will Hutton approves the deal; it was even bigger than he’d recommended. “Incredibly, it may have fallen to Gordon Brown to show the world how to avert a slump”.
Never mind Gordon, even the serious stuff that affects you and me has a sliver lining. The heavy commentaries are in broad agreement. We can feel just a little easier.. It’s still too early to work out the repercussions in much detail but again, there’s quite a lot of agreement. The Guardian says the £500bn of support for the banking sector may have surprisingly little impact on the public borrowing figures. Its the recession that follows what means taxes will rise and spending cut. The FT agrees. “The government can afford this plan. National debt is relatively low and the UK can borrow more. The price will, in all likelihood, be eclipsed by the cost of any significant downturn.”
Brian Walker @ 09:33 AM
bw,
‘Better be part of a large country weathering the storms than a vulnerable tiny nation buffeted about by them’
Perhaps . The world’s ‘safest’ banking system in the league table of banking systems is Canada - The USA currently ranks 50th with the UK 51st?
More later on the league table .Gordon Brown’s move is at this moment being considered by the present White House incumbent as the stock market continues to tank .
Meanwhile the Federal Reserve is throwing everything into injecting more ‘liquidity’ into a situation which in a very real sense owes it’s origin to an ‘excess ‘ of liquidity in the form of personal credit card debt and irresponsible levels of leveraging by the investment banks , hedge funds etc ec . Fighting ‘fire’ with fire as it were .
The USA is clapped out financially . Never mind the public deficit - private debt has quadrupled over the past 8 years, much of it in response to President Bush’s urging of Americans to ‘spend ‘ patriotically after the 9/11 atrocity .
The Republican Party is now being hoisted on it’s own petard and looks like it may also ‘tank’ in the Senate , and House as well as the White House .
We can expect that this ‘crisis’ will run for another few weeks /months until the ‘wood ‘ is seen from the trees . Meanwhile Paulson keeps sending in the flamethrowers .
Posted by on Oct 09, 2008 @ 10:44 AM£500bn… a thousand quid each. The mining industry could have done with this type of investment in the eighties.
Posted by on Oct 09, 2008 @ 11:57 AMDewi thank God it didn’t..
Posted by on Oct 09, 2008 @ 12:28 PMI was being slightly facetious - it’s just the scale is so worrying. I don’t hold much store by this “we’ll make a profit” thing. If that’s the case why arn’t companies buying these banks?
Also concerned at the principle of a bail out without addressing the causal factors - how on earth did a bunch of highly rewarded bankers get involved in bundling and re-selling (and buying !!) parcels of toxic sub-prime debt. Nationalise them all (and the Railways while we are at it !!)Posted by on Oct 09, 2008 @ 12:47 PMdewi ,
‘how on earth did a bunch of highly rewarded bankers get involved in bundling and re-selling (and buying !!) parcels of toxic sub-prime debt.
It goes back a long way Dewi to the Garden of Eden :) when Eve allowed herself to be deceived by the snake :)
In ‘modern times ‘ this ‘mess ‘ can be directly traced back to the Grantham Grocer a.k.a and her swooning acolytes across the pond in particular one former B actor with an easy gait and a good line in spin and lots of deregulation or more properly misregulation.
Imagine a trickle down stream turning into a river and imagine that river flowing down a steep decline without any dams to break the flow of current . Now as the river enters the sea imagine the American homeowner already up to his/her neck in debt from a decade of wage stagnation trying to stem the flood by holding out his /her hand.
The hairless chap battling in midflood still holding out an oar is none other than Paulson . Watching the spectacle from the sidelines is the rest of the world seeing the USA lose it’s once permanent dominance of the world financial system .
Scary -you bet ! The next three financial ‘meltdowns ‘ in the USA are waiting to ‘emerge ‘ once the present flood seems to recede .
1) The bond market (already going )
2) The Health Care system which is gobbling up 20% of USA GDP and transferring most of that to the private health insurance spivs and the drug
companies .3) The Social Security timebomb which is ticking away and which will eventually take up every dollar of revenue raised .
Posted by on Oct 09, 2008 @ 01:32 PMCheer up folks it could be worse ;)
CANBERRA (Reuters) - Canada has the world’s soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.
But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to bolster bank balance sheets.The United States, where some of Wall Street’s biggest financial names have collapsed in recent weeks, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa.
The United States was on Thursday considering buying a slice of debt-laden banks to inject trust back into lending between financial institutions now too wary of one another to lend.
The World Economic Forum’s Global Competitiveness Report based its findings on opinions of executives, and handed banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets).
Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6.7), Australia (6.7) and Denmark (6.7).
UK banks collectively scored 6.0, narrowly behind the United States, Germany and Botswana, all with 6.1. France, in 19th place, scored 6.5 for soundness, while Switzerland’s banking system scored the same in 16th place, as did Singapore (13th).
The ranking index was released as central banks in Europe, the United States, China, Canada, Sweden and Switzerland slashed interest rates in a bid to end to panic selling on markets and restore trust in the shaken banking system.
The Netherlands (6.7), Belgium (6.6), New Zealand (6.6), Malta (6.6) rounded out the WEF’s banking top 10 with Ireland, whose government unilaterally pledged last week to guarantee personal and corporate deposits at its six major banks.
Also scoring well were Chile (6.5, 18th) and Spain, South Africa, Norway, Hong Kong and Finland all ending up in the top 20.
At the bottom of the list was Algeria in 134th place, with its banks scoring 3.9 to be just below Libya (4.0), Lesotho (4.1), the Kyrgyz Republic (4.1) and both Argentina and East Timor (4.2).
RANKINGS
1. Canada
2. Sweden
3. Luxembourg
4. Australia
5. Denmark
6. Netherlands
7. Belgium
8. New Zealand
9. Ireland
10. Malta 11. Hong Kong
12. Finland
13. Singapore
14. Norway
15. South Africa
16. Switzerland
17. Namibia
18. Chile
19. France
20. Spain
40 USA
44 United Kingdom--------------------------------------------------------------------------------
124. Kazakhstan
125. Cambodia
126. Burundi
127. Chad
128. Ethiopia
129. Argentina
130. East Timor
131. Kyrgyz Republic
132. Lesotho
133. Libya
134. Algeria
SOURCE: World Economic Forum Global Competitiveness Report 2008-2009.
(For the full World Economic Forum report click on: http://www.weforum.org/GCR0809_Browser )
GF comment ,And not a mention of Zimbabwe ;) where everybody who can hold a banknote in his/her fist is a billionaire
Posted by on Oct 09, 2008 @ 02:08 PM“In ‘modern times ‘ this ‘mess ‘ can be directly traced back to the Grantham Grocer a.k.a and her swooning acolytes across the pond in particular one former B actor with an easy gait and a good line in spin and lots of deregulation or more properly misregulation.”
Almost there. Let me finish the story:
The grocer’s daughter and the actor knew that markets work best with free market principles and without interference from bungling ne’er-do-well politicians seeking to distort the market according to the needs of their particular social agendas, vested interests, pet projects, etc. But the people were scared of business and they wanted Nanny to watch over them, protecting them from such things as nasty credit-scoring models which were designed to ensure that money was only loaned to those who could afford to repay it. The people knew that government agencies such as the US Federal Reserve and the ECB could do wonderful things such as regulate the rate that the banks charged for loaning money and also regulate the credit-scoring models that determined who money was lent to. The politicians knew that because these government agencies had an obligation to advance government economic policy that the politicians could control the flow of money in the market if they set the appropriate policy, thereby nullifying free market.
This was a wonderful discovery because now Nanny could make the banks fling money at the poor people and the poor people would show their gratitude for Nanny by electing the politicians who controlled Nanny. Couldn’t afford credit? No problem! Nanny knows that the US Federal Reserve has a duty to support economic policy, so Nanny will make the US Federal Reserve set interest rates at ridiculously low levels and this will make the banks lend money at ridiculously low interest rates and cheap credit will be aplenty! Couldn’t get credit? No problem! Nanny knows that the US Federal Reserve regulates the credit-scoring models that are used by the banks, so Nanny will make the banks use credit-scoring models that make them lend you money even if you don’t have the means to repay it! Don’t have a job so can’t get a mortgage? No problem! Nanny will make the banks count your Welfare check as earned income showing that you have the ability to repay a mortgage even if you don’t have a job! Isn’t Nanny wonderful? See what politicians can do for you when they interfere in the free market? Why, free money just floods forth in your direction!
Sadly for Nanny, the greedy banks insisted that people repaid the money they had loaned to them, and they began repossessing their houses when the people were unable to do comply. This made Nanny very angry, so Nanny made the US Federal Reserve lower interest rates further so that people could afford to repay them. Sadly again for Nanny, the people were greedy and they borrowed vast sums of money to indulge in speculation in the property market, causing rapid house price inflation. Nanny thought that lower interest rates would make houses more affordable to poor people but Nanny got it badly wrong: low interest rates caused rapid house price inflation, making housing unaffordable to the poor. Nanny’s solution to its boo-boo was to lower interest rates again and to encourage the US Federal Reserve to devise more crackpot credit-scoring models to ensure than people could borrow even more money to pay the higher property prices caused by the lower interest rates.
Now things weren’t looking too good. The banks had loaned trillions in equity to folks to invest in property that was vastly inflated in price by speculation by greedy house-buyers caused by low interest rates set by government intervention, and the banks would face massive a write-down on the value of their assets and hence massive losses and potential bankruptcy as soon as the property bubble burst - which it inevitably would. So why didn’t Nanny see all this coming as a direct result of its intervention in the free market? Because Nanny didn’t care. Nanny is run by folks who want to be re-elected and Nanny knew that cheap credit would help. The banks didn’t care either because Nanny gave them an implicit guarantee that Nanny would assume responsibility for all losses caused by the reckless lending practices that it promoted.
Now Nanny points at greedy Wall Street and acts all surprised that greed exists among those socialist saints at all, blaming Wall Street and the banks for events that Nanny is responsible for. Nanny says you need more of Nanny because Nanny thinks she is the solution rather than the problem. Yes, Nanny is crazy, but so are the folks who elected her - and are now left with massive debts to repay thanks to her intervention in the free market.
Posted by on Oct 09, 2008 @ 02:35 PMThe Grantham Grocer’s daughter left office seventeen years ago, we’ve had eleven years of a Labour government since then, who else are you going to blame, Disraeli?
Actually GF as you well know the whole sub-prime mortgage calamity is a direct result of government interference, more specifically US Democrat inspired government interference in the housing market, when the banks were ordered by law during the Clinton administration to lend money to people (more precisely people from ethnic minorities) who quite clearly could not possibly afford to repay the debts.
It is no coincidence that both Fannie Mae and Freddie Mac were huge donors to the Democrat party and any attempts to reform them by Republicans were absolutely resisted by the Democrats. It’s now a bit nauseating to hear how Margaret Thatcher or George Bush are to blame for a colossal mess created by statist left wing politicians who couldn’t leave the free market well enough alone.
Posted by on Oct 09, 2008 @ 02:37 PM-
Posted by on Oct 09, 2008 @ 02:53 PM
there was a good article on the WSJ recently about govt meddling with fannie and freddie:
http://online.wsj.com/article/SB122298982558700341.html
About halfway down on the left is a sub header called “Hear No Evil” - some quotes from congressmen on fmac & fmae, a must-read for all those who say that govts had nothing to do with all this, oh no siree, nothing to see here..
Posted by on Oct 09, 2008 @ 04:12 PMDave & Harry Flashman ,
You guys must be identical twins . Your style of writing , syntax and sentence construct is so alike as to be hardly the result of chance .
People need to be housed . If the market cannot supply adequate housing at a price that people can afford then it’s up to ‘Nanny ‘ to do what is morally and ethically right . The same applies to Healthcare and Education .
‘But the people were scared of business’
And if you read the industrial and commercial history of corporate America over the past 100 years you might understand why their fear is legitimate .
There is no ‘free market ‘ . Information is not perfect . Even Warren Buffet knows that !
The ‘free market’ if left to regulate itself would have turned the the USA into a totalitarian fascist corporate State in the 1930’s . We saw what happened in Weimar Germany as the German middle and lower income groups were emisserated.
And with the present USA administration and indeed over the past 25 years we have seen the steady and relentless emisseration of middle class and lower income americans .
This is why Mr McCain and his ‘republicans’will not win in November .
‘Yes, Nanny is crazy, but so are the folks who elected her’’
So you favour the corporate state run by an oligarchy with one businessman one vote - no trade unions and another 3 million incarcerated in private sector managed prisons with all good paying jobs outsourced to Vietnam ?
Thought so -
Ye feckin gobshites !
Posted by on Oct 09, 2008 @ 06:19 PMdave & hairy falseman ,
‘
when the banks were ordered by law during the Clinton administration to lend money to people (more precisely people from ethnic minorities) who quite clearly could not possibly afford to repay the debts.’Right . Bad Clinton . Imagine trying to help poor people be housed . Can’t be letting them coloured folks and spics have proper houses eh . Jest ain’t right according to the free market ‘doctrine ‘. Why back on the ole plantations these folks woulda benn happy to live in a leanto shack . Good enough fer them mah pappy said :(.
Anyway why don’t these poor coloured folks and spics just go back to some f**king country they don’t come from eh and let the free market work there .?
It’s not often one comes across such unreconstructed ultra right nutters on slugger posing as ‘jews ‘ of a central european background and ‘muslims ‘ of a Norn Ireland background :(
A right pair of bollixes or should that be just the one bollix fer the two of yiz ?
The age of Milton Friedman is over and it’s back to the drawing boards to construct a new ‘economic model ‘ that can work in a globalised economy .
America is moving to the left having had enough of the ‘fairy tale ‘ of the Grantham grocer and her hero Milton Friedman and their devoted acolyte Ronnie ‘ invade Grenada ‘ Reagan . Not before time :(
Posted by on Oct 09, 2008 @ 06:40 PM“The tabloids have decided to look on the bright side...”
So have I - terms such as “Celtic Tiger” and “Anglo Saxon model” and all the other ethnic / voodoo economic bullshit labels which were all the rage a short while are now surely gone (and “basket case” is no longer restricted to Northern Ireland, Germany and France).
Posted by on Oct 09, 2008 @ 08:34 PM“You guys must be identical twins . Your style of writing , syntax and sentence construct is so alike as to be hardly the result of chance .” - Greenflag
...
“It’s not often one comes across such unreconstructed ultra right nutters on slugger posing as ‘jews ‘ of a central european background and ‘muslims ‘ of a Norn Ireland background :(
A right pair of bollixes or should that be just the one bollix fer the two of yiz ?” - Greenflag
That’s funny, you paranoid conspiracy lunkhead - and you call Harry Flashman and I “nutters”! My syntax is usually botched and punctuated by misspelt, missing or disordered words, whereas Harry’s syntax is usually flawless. As for his belief in free market principles, that is due to his insight into human nature and solid his understanding of economics. Contrary to your self-serving delusions, the world has not ‘turned socialist’ and it remains possible for two people to believe in the free market without them being the same person. I seem to recall that you harboured a similar delusion about Ireland’s pro Lisbon Treaty disposition when you declared that the Treaty would be passed by an overwhelming majority and that you did not “know a single person” who intended to vote ‘No.’ As the majority voted ‘No’ I can only suggest that you depart from the damp solitude of your parent’s basement and meet more people.
“People need to be housed . If the market cannot supply adequate housing at a price that people can afford then it’s up to ‘Nanny ‘ to do what is morally and ethically right .”
No, it’s up to people to provide for their own needs. They have no automatic right to shift the burden for the welfare onto other citizens. That is immoral. If the State feels compelled to provide for their needs, then it should take care to do so in a manner that does not inflate house prices beyond the realm of affordability of low income groups or leave them with massive mortgages that they cannot repay - not to mention that the State should avoid bankrupting itself in the process. The lower income groups are now far worse off than they were before the State intervened in the free market to proffer its socialist agenda. They were not helped by the reckless actions of the State, they were seriously harmed by them.
Posted by on Oct 09, 2008 @ 09:12 PMHere is the article that lafcadio linked to about “the role politicians and policy makers played in creating artificially high housing prices, and artificially reducing the danger of extremely risky assets.”
How Government Stoked the Mania
Housing prices would never have risen so high without multiple Washington mistakes.Many believe that wild greed and market failure led us into this sorry mess. According to that narrative, investors in search of higher yields bought novel securities that bundled loans made to high-risk borrowers. Banks issued these loans because they could sell them to hungry investors. It was a giant Ponzi scheme that only worked as long as housing prices were on the rise. But housing prices were the result of a speculative mania. Once the bubble burst, too many borrowers had negative equity, and the system collapsed.
Part of this story is true. The fall in housing prices did lead to a sudden increase in defaults that reduced the value of mortgage-backed securities. What’s missing is the role politicians and policy makers played in creating artificially high housing prices, and artificially reducing the danger of extremely risky assets.
Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target—42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005.
For 1996, HUD required that 12% of all mortgage purchases by Fannie and Freddie be “special affordable” loans, typically to borrowers with income less than 60% of their area’s median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. Between 2000 and 2005, Fannie and Freddie met those goals every year, funding hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans, and made to borrowers who bought houses with less than 10% down.
Hear No EvilFannie and Freddie also purchased hundreds of billions of subprime securities for their own portfolios to make money and to help satisfy HUD affordable housing goals. Fannie and Freddie were important contributors to the demand for subprime securities.
Congress designed Fannie and Freddie to serve both their investors and the political class. Demanding that Fannie and Freddie do more to increase home ownership among poor people allowed Congress and the White House to subsidize low-income housing outside of the budget, at least in the short run. It was a political free lunch.
The Community Reinvestment Act (CRA) did the same thing with traditional banks. It encouraged banks to serve two masters—their bottom line and the so-called common good. First passed in 1977, the CRA was “strengthened” in 1995, causing an increase of 80% in the number of bank loans going to low- and moderate-income families.
Fannie and Freddie were part of the CRA story, too. In 1997, Bear Stearns did the first securitization of CRA loans, a $384 million offering guaranteed by Freddie Mac. Over the next 10 months, Bear Stearns issued $1.9 billion of CRA mortgages backed by Fannie or Freddie. Between 2000 and 2002 Fannie Mae securitized $394 billion in CRA loans with $20 billion going to securitized mortgages.
By pressuring banks to serve poor borrowers and poor regions of the country, politicians could push for increases in home ownership and urban development without having to commit budgetary dollars. Another political free lunch.
Fannie and Freddie and the banks opposed these policy changes at first through both lobbying and intransigence. But when they found out that following these policies could be profitable—which they were as long as rising housing prices kept default rates unusually low—their complaints disappeared. Maybe they could serve two masters. They turned out to be wrong. And when Fannie and Freddie went into conservatorship, politicians found out that budgetary dollars were on the line after all.
Posted by on Oct 09, 2008 @ 09:15 PMContinued
While Fannie and Freddie and the CRA were pushing up the demand for relatively low-priced property, the Taxpayer Relief Act of 1997 increased the demand for higher valued property by expanding the availability and size of the capital-gains exclusion to $500,000 from $125,000. It also made it easier to exclude capital gains from rental property, further pushing up the demand for housing.
The Fed did its part, too. In 2003, the federal-funds rate hit 40-year lows of 1.25%. That pushed the rates on adjustable loans to historic lows as well, helping to fuel the housing boom.
The Taxpayer Relief Act of 1997 and low interest rates—along with the regulatory push for more low-income homeowners—dramatically increased the demand for housing. Between 1997 and 2005, the average price of a house in the U.S. more than doubled. It wasn’t simply a speculative bubble. Much of the rise in housing prices was the result of public policies that increased the demand for housing. Without the surge in housing prices, the subprime market would have never taken off.
Fannie and Freddie played a significant role in the explosion of subprime mortgages and subprime mortgage-backed securities. Without Fannie and Freddie’s implicit guarantee of government support (which turned out to be all too real), would the mortgage-backed securities market and the subprime part of it have expanded the way they did?
Perhaps. But before we conclude that markets failed, we need a careful analysis of public policy’s role in creating this mess. Greedy investors obviously played a part, but investors have always been greedy, and some inevitably overreach and destroy themselves. Why did they take so many down with them this time?
Part of the answer is a political class greedy to push home-ownership rates to historic highs—from 64% in 1994 to 69% in 2004. This was mostly the result of loans to low-income, higher-risk borrowers. Both Bill Clinton and George W. Bush, abetted by Congress, trumpeted that rise as it occurred. The consequence? On top of putting the entire financial system at risk, the hidden cost has been hundreds of billions of dollars funneled into the housing market instead of more productive assets.
Beware of trying to do good with other people’s money. Unfortunately, that strategy remains at the heart of the political process, and of proposed solutions to this crisis.
Mr. Roberts is a professor of economics at George Mason University and a scholar at the Mercatus Center.
Posted by on Oct 09, 2008 @ 09:15 PMDave
It looks like your informed argument has scared off Greenflag et al.
You could also have mentioned the complex structuring that was necessary to place these securitised sub-prime mortgages. They were mixed with higher quality assets to make them more appealing to investors who often didn’t know or bother to find out just what was inside the wrapper. And obviously these things are almost impossible to value properly which has made them particularly vulnerable to the rigours of ‘mark-to-market’ accounting. If you have no idea what the asset is worth, the responsible thing to do is place a very conservative valuation on it.
We’ll only know the true extent of the damage when these assets mature but unfortunately noone is willing or able to wait that long.Posted by on Oct 09, 2008 @ 10:31 PMNothing will scare Greenflag away - he doesn’t have enough sense to know fear. ;)
You’re spot-on about the uncertainty of value of those degraded assets. That is the real reason why banks are not lending money to those banks that have question marks over their solvency due to their exposure to those volatile assets, such as the Irish banks. State guarantees for the banks may help with short-term liquidity problems but it does nothing to remove the question marks about how solvent these banks are. Uncertainty will remain until those questions are answered, so these flawed acts of state intervention are really just obscuring the underlining dynamics and deepening the uncertainty (the real cause of instability).
Incidentally, one of the major acts of organised lying that government, media, banking, et al, have engaged in is claiming that there is a global equity freeze wherein banks have stopped lending money to other banks altogether. This is a falsehood that is proffered to divert attention away from the actual underlining dynamics of troubled banks and onto ‘other’ causes such as some strange flu-like virus that has infected all banks simultaneously and that is spread by a means called ‘globalisation.’
The US Federal Reserve reports bank loans on a weekly basis, and it shows no variation at all in the amount of loans that banks lend to each other. Nor is there any truth in the migration of trouble from ‘Wall Street to Main Street’ since the amount that banks leant to consumers during August was up by 9.5% on the previous year and the amount of money leant during week to September 17th “dipped insignificantly” but remained “much higher than [it was] a year earlier.”
http://www.forbes.com/2008/10/01/interbank-lending-ted-oped-cx_ar_1001reynolds.html
Posted by on Oct 10, 2008 @ 12:41 AMGod love ya GF, had a few too many on the way home did you? Best to wait until one is in full control of one’s faculties before one types in anger, you only end up looking a wee bit silly, as you just did.
Dave answers most of your economic points (such that they are beyond ad hominem ranting) but I will address your historical political points.
As I said Margaret Thatcher left office in November 1990 (I was wrong above, she’s actually been gone eighteen years), Ronald Reagan who cleaned up Carter’s mess left two years earlier. Since that time we’ve had an eight year Clinton administration which as you clearly accept caused the sub-prime disaster, and eleven years of Labour which saw the destruction of the best run pension scheme in the western world.
Furthermore I’m fairly certain that Mr Reagan and Mrs Thatcher had no executive role in Iceland, nor indeed in Spain, Ireland, Germany, Belgium, France, Australia or Italy many of whose governments were socialist for those years yet who all seem to be having equally as bad times of it recently as the UK and US. Get over it GF, Ronnie’s dead and Maggie’s on her way out, you can’t keep blaming them forever, you need to take off the blinkers and see what’s really causing this problem.
As to your assertion that politics are moving left, this will come as a huge surprise to the peoples of France, Italy and Germany and soon no doubt Britain as they dump the failed socialist governments of recent decades which have landed us in this mess. As to the US, we’ll see, McCain hasn’t put up much of a fight and Obama’s fraudulent campaign has been given a free pass by the entire media so he might just pull it off, rest assured he will be a one term, lame duck president.
I’m intrigued by your ludicrous assertion that the US could have gone fascist in the ‘30s, which is strange because the only nations which didn’t have some sort of corporatist, socialist, fascist regimes at that time were the US and the British Commonwealth democracies, who pursued largely free market, liberal democratic policies while the state control over which you get so onanistic led to Franco, Mussolini, Hitler, Petain and all the rest of the grisly Euro thuggocracy.
Talk about standing history on its head!
Posted by on Oct 10, 2008 @ 12:41 AMJesus Christ Dave! We’ve posted at the same time again, fuck me GF will be convinced he’s smoked us out now. What the fuck are you doing up at this time?
Posted by on Oct 10, 2008 @ 12:42 AMI’m now bovvered Terrible start on Footsie also....
Posted by on Oct 10, 2008 @ 09:41 AM”In ‘modern times ‘ this ‘mess ‘ can be directly traced back to the Grantham Grocer a.k.a and her swooning acolytes across the pond in particular one former B actor with an easy gait and a good line in spin and lots of deregulation or more properly misregulation.”
With this remark, Greenflag, you pre-empted the US economist, Fukiyama, who opined on Today on Radio 4 this morning that the current crisis was not “a capitalist crisis” per se but “a Reaganite crisis”. He went on to say that the earlier collapses in the Far East were seen by them not as their own failures but as failures of the policies forced upon them by the IMF which they were obliged unhappily to accept.
Posted by on Oct 10, 2008 @ 11:37 AMDave & Hairy
‘Contrary to your self-serving delusions, the world has not ‘turned socialist’’
I did’nt say it has . However your fellow neo con nutters in Libertas and the ultra right wing nutters in the USA are accusing the Bush administration of going ‘socialist ‘. Wall St and the banking industry are begging for more government intervention not less or haven’t you noticed ?
‘and it remains possible for two people to believe in the free market without them being the same person.’
I actually believe in the so called ‘free market ‘ too up to a point . It’s just that being a natural skeptic my belief in it is not based on doctrinaire ‘principles ‘ such as yours and your alter ego hairy falsehood’s is . That kind of belief would and has condemned millions of people to abject poverty , starvation, genocide and dislocation . It has also endangered our democracies by it’s bloody minded search for ‘profit’ regardless of the societal consequences .
‘As the majority voted ‘No’’
27% is not a majority .
‘My syntax is usually botched and punctuated by misspelt, missing or disordered words.
Really ? I had’nt noticed . I’ll give you 9.9 out of 10 which is more than I’d give myself .
‘whereas Harry’s syntax is usually flawless.’
Did you check this assertion with your other half ? i.e Oul hairy hisself ;)?
to be continued
Posted by on Oct 10, 2008 @ 01:11 PM“to be continued”
If infantile name calling is the best you can manage GF, I wouldn’t bother.
Posted by on Oct 10, 2008 @ 01:32 PMThe failure of the sub prime mortgage sector is not down to minorities or poor people as they tended to borrow small amounts for modest houses.
the failure infact is because the american middle class kept borrowing money they didnt have to accomadate lifestyles they couldnt afford.
As the value of their houses increased they were allowed to borrow more money to pay off the money they couldnt afford from before and infact they were adverising mortgages for 125% of the value of their houses.
few of the lower to lower middle classes appear to be in trouble its the people with the $400,000.00 and above houses that are hurting
Posted by on Oct 10, 2008 @ 01:39 PM
