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Britain was 3 hours away from financial collapse....

Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
...so says Lord Myers.

Story.

I'm pretty bearish on the markets anyways, but if this is true it would surprise even me. Most people don't realise how fragile the confidence is in the market, and with Brown putting all the banks risk onto the taxpayer he is exacerbating the risk of sterling collapse. Fact is we can't afford to backstop every bank in this country and the CDS spreads between British gilts and German bunds is breaking new records everyday (and their banks aren't exactly in the best state either), the market is pricing in increasing risk of default if Brown doesn't stop fucking about....

Comments

  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    It seems to be a major and disturbing flaw of capitalism (though certainly not the only one) how fragile the entire system actually is, and how relatively easy it can be for entire countries to go bankrup at the hands of the actions of a few incompetent/corrupt people.

    Then again that is to be expected when so much of existing 'wealth' is electronic numbers floating in the ether, and when investors act like five year old kids attempting a football game- where one goes with the ball, everyone follows closely.

    Capitalism. Don't ya love it :)
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    All practising communists should be aware of the 5th plank to the manifesto.

    "Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly."

    I contend that therein lies any problems with the financial system. Fiat currencies.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    the market is pricing in increasing risk of default if Brown doesn't stop fucking about....

    Have you been keeping your eye on sterling ? I suspect there will be hands at work in the market now attempting to avoid it going over the cliff.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    What annoys me its through america that why we are like this i feel so sorry for familys losing their homes jobs because of this when 2 years ago we was all fine luckly im kind of ok so good with money id like to see if all celebritys with their millons helped people who are like this
    And now corus has annouced there cutting 2.5thousand jobs in uk and 3.5thousand jobs worldwide more than 10percent of its workforce
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    AJ - US was the catalyst for the downturn but the problems here are of our own doing, banks with too much leverage hiding bad debt and reducing investor confidence...people were also using their homes like ATMs and the credit bubble here created an illusion of wealth that was never sustainable. same problems in Eurozone but for now the weaker PIGS (portugal, italy, greece, spain) are riding on the strength of Germany and France, they have their own problems to think about so if they come to their senses the Euro is doomed.

    GOS - the UK doesn't have enough reserves to prop up the sterling and currency intervention is a fickle game because of the huge liquidity involved, any pop will be temporary so i am already hedged short against chf and will add on any bounce.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    In my own (admittedly uninformed) opinion, it just seems as though the government and banks are prologing the inevitable and will make eventual recovery a much longer and much harder process than necessary.

    People should be serving prison sentances for what's happening.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Considering the banks in Iceland were claiming everything was going to be fine right until they collapsed I wouldn't be surprised if there's truth in this.

    The only bank that did get money from the government seems to have used it to line the pockets of owners and others through some very bizarre transactions. There's coming up cases one after the other where the banks and owners of large steady companies have sucked them dry from within. My nation pretty much feels it's been raped.

    And now the government is cutting down healthcare and the education system (and everything else) to pay for this insanity . :yippe:
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    The Government has come up with a series of lies which are designed to try and get them off the hook over this issue. Firstly, McBroon claimed that our current problems "began in America". Funny how he isn't saying that now they've got a popular president, isn't it? But this line of attack does not ring true. During the good years, many businesses moved their headquarters to London because they could make more money there than in other countries. It was whilst in London that they would have concoted these crazy ideas about lending to people who couldn't afford the repayments and other pieces of madness. Therefore, the UK played a much bigger role in causing these problems than our PM would like you to think. Also combined with his failure to create a new regulatory framework to keep an eye on the banks, Gordon looks more and more like the cause of our problems every single day.

    Next, Brown attempted to claim that David Cameron was "ridiculous" to talk about the possibility of the IMF having to bail us out. The money markets give a different message - why do you think the value of the pound is falling? Currently, the UK is seen as a bigger credit risk than McDonalds, of all companies. He has also claimed that nobody saw the recession coming. Again, not true. The Central Bank of Lebanon saw this coming 2 years ago. What did they do? They consolidated their weaker banks and made sure the strong ones were wall-capitalised. As a result, several parts of the world are weathering the recession extremely well - it is only countries such as ours which are suffering the worst.

    Unemployment is heading towards 3million and could go even higher. The old adage is true - every Labour government ends up with higher unemployment than when they came in, and every Labour government ends up destroying the public finances. Thanks to these incompetent bastards, we now face the real risk of a run on the pound and having to visit the IMF in order to stave off national bankruptcy.

    As for this story by Lord Myners, the man has a cheek. According to Guido Fawkes, Myners "made his millions in the City. He was until recently a director of GLG, the hedge fund spawned by ex-Lehmans staff, that made fortunes for traders taking short-term bets. It was one of the funds that profited the most from the collapse of Northern Rock.". Strange how he didn't declare that before making such apocalyptic claims, innit? Nonetheless, the story is almost certainly true.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    While you make some valid points SG, Brown wasn't incorrect to say the problems started in America. That is not the full story, but the great majority of the share of the blame for the current woes lie firmly with US financial institutions and their reckless behaviour for the last few years. There is no way Brown can be to blame for that, no matter how much you despise him.

    Errors have since been made of course, but to be honest, even a completely faultless performance and the best measures possible would have still failed to save us from recession, though they could have of course put us in less a precarious position than we are now.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    actually aladdin, european banks are more highly leveraged and have arguably been more reckless, it's just the US felt the pain first because of their housing bubble popping...that's one reason the euro has crashed hard recently against the dollar, investors thinking the worst is yet to come this side of the pond. there was a big rumour a while back that AIG was bailed out by Paulson at Euro govs request because several big european banks had asset protection with them that would have had to be downgraded, blowing up their tier 1 capital ratios. time will tell, UK banks are already toast and gov is just delaying the inevitable imo.

    it's just a nice get out for euro politicians and the media to blame america, brown fucked this country over with year after year of growing deficits and accounting gimmicks (e.g. PFI), taking us to war, no financial regulation and always choosing short term voter popularity in favour of long term stability e.g. cutting interest rates back in 2005 to reinflate the credit bubble when house prices were stabilising, unsustainable immigration and social welfare policies etc etc i could go on. all that no more boom and bust, i'm a prudent iron chancellor crap he rode in on has been shot to shit. i don't understand why people aren't calling for his head yet, maybe when sterling is at parity with the dollar people will start to wake up.

    as for mcdonalds, well there's not many safer places to put your money these days. i reckon their credit rating will be higher than most sovereign nations before this fiasco is over.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    i don't understand why people aren't calling for his head yet, maybe when sterling is at parity with the dollar people will start to wake up.
    Well, our frankly deranged PM might want to take a look at what's happening in Iceland at the moment. Over there, we've seen massive protests all last week and today, it's brought down the government. The country's prime minister has resigned, saying "The anger and distrust of the public is too deep for me to be able to regain their trust. This will not be regained until changes in key institutions have been made."

    All over Europe, there are huge protests taking place. How long until the people of the UK join them to say - enough is enough? How long until we see violent protests on the streets of London? And how long until Gordon Brown gets the message? The brilliant cartoon accompanying this article from The Sun's Trevor Kavanagh, catches the current zeitgeist perfectly.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    From what I've discussed with friends and colleagues, people in this country appear to be more pissed off with our incompetent, bonus self-rewarding cowboy bankers and financiers than with the government. For the time being at least.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Let's hope we don't have any violent protests calling for the overthrow of the Government.

    I much prefer the old boring route of elections
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    SG, why are you so surprised the mcdonalds is seen as less of a credit risk than the UK? i don't understand how this could ever be seen as surprising. admittedly i am no economist, but still.

    mcdonalds is a massive international chain built around franchises, ie, if one restaurant is in trouble, it is the owners who struggle, not the mcdonalds chain. it has an established reputation and doesn't really need to even advertise. people need to eat, and are too obsessed with convenience and haste to ever turn their back on it.

    the uk is a country with an overpaid, underskilled workforce (how many people in the uk can even speak a foreign language to a good standard?) which refuses to join the euro, and chooses to ally itself more closely with the US and their shady economic situation than the EU which, albeit struggling, seems to be doing a bit better.

    shit, if i had a tenner, i'd rather have a big mac than invest in the uk. with the change, i'd buy brown a pint. the guy could probably do with it.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Your predictions of violent protests in the UK could be closer than you think SG, if events in France are anything to go by.

    PS. Vitual pint if you can pin France's economic troubles on Gordon Brown ;)
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Aladdin wrote: »
    Your predictions of violent protests in the UK could be closer than you think SG, if events in France are anything to go by.
    It's already starting, Aladdin. Not quite on the same scale as in France yet, but the message is getting out there. Take a look at this. Unions are getting angry about more and more jobs being contracted out to foreigners. As ever, the unions are several years late getting the point, but better late than never. Expect more of this.

    In the meantime, what is the concern of our Prime Minister? When not talking about "hard-working familes" getting "the real help" that they apparently "need now" concerning "the recession which began in America" which would be a thousand times worse if the "do-nothing" party were in charge, he's been whinging to the media that newspaper cartoonists are making him look fat. Bloody nora...
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Bet Brown wishes he hadn't sold all that gold now

    http://www.timesonline.co.uk/tol/news/politics/article1655001.ece
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    From that article:

    "In Victorian times the Bank of England stored gold equivalent to the value of all banknotes in circulation — the so-called gold standard. This ensured that money had an intrinsic value and that governments could not simply print banknotes at will, which could quickly devalue sterling. However, the gold standard was suspended during the first world war as the country required huge sums of money to fund the military campaign. It was finally abandoned in the inter-war period."

    That paragraph is for me the most important in the article if one was looking for financial advice,especially for the future.

    I see Gonoism on the horizon.
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