Tag Archives: credit crunch

Millennium’s Credit Crunch Diary: October and November… Worst! Recession! Ever!

This week sees the Government reveal its Pre-Budget Report, usually a review of spending in advance of the budget where the Chancellor says how he’ll be paying for it all though, traditionally, the run-up to a general election is the time for the Chancellor to play Santa, showering presents on favoured voters in key marginals, and with all the indications now pointing to a March General election, chances are we’ll never quite get to Hard Labour facing the BILL.

This year, of course, there is considerably less room for LARGESS. So let’s start with a look at where we’re …

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Millennium’s Credit Crunch Diary… August: It’ll All Be Over By Christmas?

Before we start, a word about bankers’ bonuses.

With the head of the Financial Services Watchdog, Mr Airhead Turner, placing bankers on a scale between Socially Awkward and Totally Useless, people have been coming up with plans to curb excessive bonuses. Mr Airhead himself floated the idea of a transaction tax or Tobin tax, where you charge the bankers for passing money across the border.

Captain Clegg and the Liberal Democrats don’t think this would work, because the bankers would just pass their money over everyone’s border but ours!

We’d rather see bonuses cut down to size by cutting the BANKS down to size, breaking them up so they are no longer too big to save when it turns out that they are too big to let fail.

For the Conservatories, Master Gideon Oboe said that if banks didn’t stop awarding big bonuses he would have the regulator write them a VERY STERN letter, warning them that he would not sign off on their pay package. And if they persisted in paying out, well, he’d write them ANOTHER very stern letter! That would sort them out.

And Mr Frown, the Prime Monster himself, promised to try very hard to put a STOP to that sort of thing, and then tried very hard to scupper Monsieur Sarcastic and Ms Angular Meercat’s plan to ACTUALLY stop that sort of thing!

I think it is time to put a fresh proposal on the table.

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Millennium’s Credit Crunch Diary… July: Is it ALL about the Banks?

You would think from the news that the BANKS were the most important things in the British Economy.

And I’m afraid you would be RIGHT.

The financial sector is far and away the largest contributor to Great Britain’s Gross Domestic Product; our exports of financial services in 2007 amounted to TWENTY-ONE billion pounds, almost a tenth of ALL exports and more than from adding together our other two big sellers (that’s food and drink: £10bn and, embarrassingly, arms sales: £7bn).

Well now we’ve seen the results for the first half of the year for some of the BIGGEST BANKERS on the High Street. …

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Millennium’s Credit Crunch Diary … June: Back to Business as Usual

After last month’s political MELTDOWN over MPs’ Expensives, and the resulting RADIOACTIVE DEBACLE of two British Nasty Party members being elected to represent us in the Euro Parliament, we were promised “a new politics”.

What we GOT was a row about spending cuts that’s SO “old politics” it is practically carbon-dated! Both Conservatories and Hard Labour were reduced to calling each other lying liars while coverage of the Liberal Democrats went from “grudging” to “invisible” faster than Mr Nick Robinson can read out a Conservatory Party Press release on the Ten O’clock News.

Welcome to the Brave New World, folks!

There’s two things going on here.

Firstly, the first, URGENT phase of the recession is PROBABLY OVER. That is a long, LONG way from saying that the RECESSION is over, or even nearly over, but the part where the news can draw exciting, sexy graphs of the economy driving off a cliff is over, and we are into the long, messy, boring tail of rising unemployment, bankruptcies, repossessions and general hardship-induced misery.

The month may have started with news of the final death of the very last remnants of British Leyland, as bankruptcy claimed the van makers LDV (or Leyland Daff Vans), but in spite of this people were actually talking about that most toxic of economic phrases: “green shoots”. This is the financial equivalent of “It’ll all be over by Christmas!” And indeed, several of the commentators have not caught themselves short of saying almost that: the implication that the British economy might be back into growth, if not already then by the fourth quarter this year, has had many thinking that that about wraps it up for the recession.

This seems like good news for Hard Labour, as it allows them to say “ah ha! we Saved the Country from recession! We DO know what we’re doing!” But it also plays well for Mr Balloon, because it puts a stop to Mr Frown’s “no time for a novice” soundbite, and allows his Conservatories to run with their “fresh start” agenda.

But HOLD ON! Both sides are now thinking about the post-recession but we’re NOT OUT OF THE HOLE YET!

The CBI have warned people not to get all premature on these signs of recovery, and do not expect unemployment to peak until well into NEXT year.

Meanwhile, the Office of National Statistics have released figures showing that the recession started EARLIER and decline had been DEEPER than previously believed. Basically, we’ve been in recession for a whole year, and in that time we have lost a TWENTIETH of the British economy.

Obviously now is NOT the time to take our eyes off the economic ball… and yet that is EXACTLY what we have done.

Never mind the boring old economy, someone famous has died and anyway the sun is shining and Wimbledon is on… what could POSSIBLY go wrong?

Well, under cover of the MPs’ Expensives scandal, the wunch of bankers in the City have quietly slipped back to their old ways: the catchphrase of the year is “bonuses are back” (like they ever went away, apparently), while the newly appointed boss of the Royal Bank-that-WE-own of Scotland is to be paid a nine-point-six MILLION pound salary. Nice work, as they say, if you can get it.

This is, frankly, the sort of behaviour that leaves people fuming and thinking that maybe we SHOULD have let a major bank FAIL. Cuddly Cthulhu knows what damage THAT would have done to the economy…

…though it does present us with a PARADOX: if we let the banks fall we’d all be bombed back to a Green-Party-economy trying to barter beads for chickens, but by saving the banks we have encouraged them to do MORE OF THE SAME. Doing the right thing seems to have made matters WORSE!

Hilariously, Chancellor Sooty prefigured his annual jolly at the Mansion House with an announcement that banking regulation was “not to blame” for the near-belly-upping of the banking sector.

Well, TECHNICALLY this is TRUE. Just as, for example, if you see a Porsche wrapped around a lamppost at ninety miles an hour it is fault of the driver for speeding and not the police… though it might have helped a BIT if they had pulled him over rather than waving him on by.

But surely you would have to be a TOTAL LUNATIC to suggest that: “everything was fine, we had a week or so of Armageddon but everything’s fine again, now.”

And yet the Government’s approach seems to be one of “we did nothing wrong, so we’ll carry on just the same”; while the bankers’ approach seems to be “we got our conkers pulled out of the fire once, and wahey more money! so we’ll carry on just the same!”

Because it seems to me that we’ve bought the driver a brand new Porsche, and are ignoring the innocent pedestrians left dead on the pavement by his passage towards that lamppost.

Does no one else see anything WRONG with this scenario?

Certainly not the Government. And certainly not the Loyal Opposition.

Because the SECOND thing that is going on is that, in the absence of a GENERAL ELECTION, both sides have decided that they are going to have one anyway.

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Vince calls for investigation into FSA’s “appallingly bad job”

The Times reports:

The Financial Services Authority was accused last night by one of its former supervisors of complacency in its past regulation of building societies.

The unnamed whistleblower, who approached Vince Cable, the Liberal Democrats Treasury spokesman, said that the FSA ignored a warning three years ago that risky self-certified loans had been packaged and sold to building societies that thought they were conventional loans.

Mr Cable has written to Lord Turner of Ecchinswell, the FSA chairman, asking him to investigate. “This man experienced first hand the appallingly bad job the FSA did of supervising the building societies,” Mr

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Millennium’s Credit Crunch Diary… March: Tax and Chocolate

I shall start with the MOST IMPORTANT news: People of Britain, friends, you can relax: despite an alleged “explosion of obesity” (why do the words “It’s wafer thin!” come to mind?) GPs have decided NOT to call for a tax on CHOCOLATE.

In the next few days Great Britain will be hosting the G20 Summit when lots of IMPORTANT world leaders – and Mr Frown, the Prime Monster – will be gathered together to decide what is THE SOLUTION.

So on the one fluffy foot, this diary could be OBSOLETE within 72 hours. But on the OTHER fluffy foot, when did a huge World Summit ever actually SOLVE anything?

But with April containing not just the G-Whizz summit but also Chancellor Sooty’s budget, much of March has seemed to be no more than PROLOGUE.

So, the prologue…

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Opinion: The only way to solve the credit crisis is to fully nationalise Lloyds, HBOS and RBS

Everyone is blaming greedy bankers for the credit crunch – unless they’re Tories, in which case they’re pinning all the blame on the Government. But who is really to blame? And more important, what can be done about it?

I decided to do some research on this and I have come to the conclusion that investment bankers, although greedy and irresponsible, are not at the root of the crisis. That particular honour in fact goes to one man who has barely got a mention in the debate so far: Bill Clinton. Allow me to explain.

In 1933, the US Government, …

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[email protected]: Vince Cable – Bewildered for now, but there’s anger to come

Over at the Daily Mail, Lib Dem deputy leader and shadow chancellor Vince Cable writes about the ‘financial aristocracy’ of Sir James Crosby (‘affable, very bright and self-confident’) and Glen Moreno (‘a Gold Card member of Tax Dodgers Anonymous’). Here’s an excerpt:

Surely, now that the Government has taken over and rescued several big banks using taxpayers’ money, they must be run in the public interest, not as bolt holes for the financial aristocracy. By contrast, I see more and more ordinary people being ground down by the recession and by the banks. I was visited this week by a lady

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Millennium’s Credit Crunch Diary… January: So is it our Winter of Discontent now?

January was a GOOD NEWS / BAD NEWS / MORE BAD NEWS kind of a month.

The GOOD news was that no one shot new President Barry O at his inauguration (unless you count the Chief Justice helping him shoot himself in the foot); the BAD news, dominating the first half of the month, was the hand-grenade of heavy-handed retaliation that Israel chose to lob though the window of opportunity presented while the Monkey-in-Chief was still in the Oval Office; the MORE BAD news was the continuing financial apocalypse, now officially a recession. (Like we didn’t know!)

Economic crisis, businesses failing, …

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Opinion: Angry Union Men – whose fault are the Lincolnshire strikes?

As Britain stares down a 1970s-style Spring of Discontent, with the Credit Crunch now being supplemented by industrial strife and wildcat strikes, who is to blame for the crisis on the Humber, and how can it be resolved?

First of all, these workers have every right to feel angry. We all do. Like the rest of the country, they were told that ‘Things Can Only Get Better’, they were even promised ‘British Jobs for British Workers’, and yet here they are again, back to picketing and strikes. Now, that isn’t to say that companies like Total shouldn’t be able …

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Causes of the credit crunch: if you’re going to try to blame David Bowie, you really should also blame fifteenth century knights

David Bowie: the case for the prosecution

The idea that the credit crunch can in part be blamed on David Bowie is the, um…, slightly unusual thought thrown in the air by Evan Davis ahead of the broadcast of his TV documentary on the City. As Evan Davis put it in The Mirror:

Even when it comes to finances Bowie leads the way – and back in 1997 he did something called “securitisation”.

He thought, “I have a lot of money coming in over the next 10 years from my back catalogue, but I’d rather have the cash now and not have

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