Posts Tagged 'credit Crunch'

Political Diversion

The Fred Goodwin pension debacle says a lot about our government and where their minds are concentrated. Instead of a structured plan (not a spending spree), to combat our recession, they chase headlines in an attempt to deflect from their own inadequacies.

This was a glorious opportunity for tax cuts for the working classes, tax hikes for the highly paid, amalgamating the NIC into the tax system a removel of even more tax dodges and a simplication of the tax system overall, they spend their time briefing reporters.

Ever time Harriet H opens her mouth, she puts back the cause of the left and women in politics decades. Engage brain before lips please Harriet.

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Night Said Fred

As Sir Fred departs the scene http://news.bbc.co.uk/1/hi/business/7666570.stm one can only view his career with RBS as a microcosm of our financial times. Like Icarus he flew too close to the sun, replacing a well run, austere Scottish retail bank with a laissez fair institution with global ambitions.

I am loath to praise our government for their actions because it could and should have been done at least two weeks earlier, and like congratulating the drowning man for accepting the offer of assistance, what alternative was there? Independent economists had been calling for this action for some time, and sprinkled with some political actions: no dividends, the heads of those responsible, it remains the best action that could be taken. Since this crisis began, the UK banks have consistenly lied to anyone who would listen. Minimal exposure to the US housing crisis we were told, mark to market values were still good. Yet each quarter from 2007 brought us further downgrades. It is for this reason why heads must roll and bonuses for MDs and above must be curtailed for every institution who brings its Dickensian begging bowl out.

I am somewhat annoyed with the response by the Conservatives. They were consistently slow in their response, merely adopting a ‘united front’ approach, arguing that they would work with the Government. I realise that nationalisation (and that’s what it is) is a bitter pill to swallow, but these are not ordinary times. It is vital to ensure that this does not happen at the same scale again which means, punishing the executives, through resignations, and bonus cuts, and punishing the shareholders through dilution and no dividend. The shareholder via the institutions clearly need to take a closer look at their holdings. Did Enron and WorldCom not teach us that a story too good to be true is just that?

If the Scandinavian and Japanese crises of the last century tell us anything, it’s that we’re in for a painful recesssion. The best we can hope for is that 2010 will bring us new hope, and that this, if not the end, is at least the beginning of the end.


September 2017
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