Archive for January, 2009

Bank of England Cuts Rate to 1.5%

The answer has to be why?

Will the 0.5% encourage business or mortgage lending any further? Will mortgage holders find their payments signicantly lower? Will credit card holders find their painful repayments eased. The link between monetary activity and bank lending is no more. A political gesture made by those without the tools, brains or balls to remedy the situation.


Balancing our budgets

I’ve edited a piece from John Maudlin which is US centric but with a few omissions, oh so relevant for the embattled UK taxpayer.

  • Shouldn’t the consumer, after decades of over-consumption, be allowed to digest the over-indebtedness and save, rather than be encouraged to take risk?
  • Shouldn’t companies, no matter what state they reside in from a political point of view, if run poorly, be allowed to fail or forced to restructure?
  • Should taxpayer money be used to make up for the mishaps at financial institutions or should we allow them to wallow in their own mistakes?
  • Shouldn’t free markets be free?
  • When did post war concensus near communism return our shores?
  • How do we choose who is rescued and who loses?
  • Shouldn’t we place blame on the politicians, bureaucrats and other “decision makers” and put skilled people in place that know how to run the businesses?
  • Is anyone else thinking that the blind attempt by the government to maintain mortgage lending at 2007 levels is sheer blind panic driven by political grandstanding or sheer ignorance of finance and economics.

    I noted that house prices are back at their long term levels. Good. However they are liable to fall further before returning to the norm if past experience is anything to go by. Even better. Mortgage holders and lenders need to learn that cheap money is not cheap forever and a primary property is a home not an asset!

    January 2009
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