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Awfully quiet on TOP re. bank nationalisation plans . . .

Posted: Tue Oct 07, 2008 8:19 pm
by Nick
Extraordinary times - the ultimate admission of the failure of laissez-faire free market capitalism has got to be the partial nationalisation of our high street banks, apparently supported by the opposition as well. I find it odd that the denizens of TOP's Lounge, that bastion of anti-interventionist free market purity, seem to have nothing to say. Of course, this is global, starting in the right wing republican USA. Not so easy to lay this one at the door of Gordon Brown and New Labour I guess.

It seems the house of (credit) cards has fallen . . . will this fix it? . Or not . . . . :digging: . . . :wallbash: . :horseflog

Re: Awfully quiet on TOP re. bank nationalisation plans . .

Posted: Tue Oct 07, 2008 8:38 pm
by Windfinder
Nick wrote:Not so easy to lay this one at the door of Gordon Brown and New Labour I guess.

Maybe not, but UK involvement in Iraq and Afganistan can be laid squarely at their door.

And your point is?

Posted: Tue Oct 07, 2008 9:43 pm
by Nick
Hardly a relevant response WF . . .

Re: Awfully quiet on TOP re. bank nationalisation plans . .

Posted: Tue Oct 07, 2008 11:56 pm
by ParaHandy
in fairly short order, control of two of Scotland's largest companies has transferred to London; the circumstances preceeding the RBS announcement was egregious to RBS. By deliberately leaking the nationalisation plan and then leaking a hotly disputed version of yesterday's meeting, there was no other outcome possible and who else other than the Government leaked it?

The government *paid* Abbey £18bn to take over the whole of Bradford & Bingley's depositors accounts amounting to £18bn and 200 branches; the government nationalised £50bn of, principally UK mortgage, debt. For the taxpayer to lose money on this deal, the default rate on the debt must exceed 70%. Death of capitalism?

Oh good . . .

Posted: Wed Oct 08, 2008 12:00 am
by Nick

For the taxpayer to lose money on this deal, the default rate on the debt must exceed 70%.

So we are all going to get rich, excellent . . . that's a relief.

I didn't say it was the death of captialism, Para, just the failure of the brand of laissez-faire capitalism we have lived with for the last ten or fifteen years. We live in interesting times.

Re: wishful thinking ...

Posted: Wed Oct 08, 2008 12:24 am
by ParaHandy
Nick wrote:So we are all going to get rich.

.. no doubt and the spot price of electricity next month is £131/MWH which is 70% and 400% greater than Germany and France respectively because the market believes their isn't sufficient generating capacity to meet demand - another example of the failure of laissez faire capitalism or just an incompetent government?

Re: Awfully quiet on TOP re. bank nationalisation plans . .

Posted: Wed Oct 08, 2008 12:34 am
by tcm
um, i wouldn't call this the "ultimate failure" really. There's plenty of rules controlling the so-called laissez faire free market already, tho obviously plenty more needed. Such frinstance, rule against giving mortgages of more than the value of a house and then selling the mortgages as "securities" for crissakes. It is also long past the time to cap the wild end of salaries for directors of public companies who get paid loads for taking not much personal risk, tho that is completyely separate. Markets go up and down innit?

The main trigger for this was the fact that house prices were at an unsustainably high level - and that is most definitely something that the govts of US and UK (where house ownership far more of an issue) *could* have seen coming. Okay, well, even a numpty like me did, bulldozed swmbo to sell one house and even got an offer on the other till she put her foot down with the flimsy argument of "where the heck are we gonna live?", pah.

Note that the so-called "sub prime" $700 bn is a teensy issue compared with 4 trillion (4000 billion) dollars of house-secured loans made by US mortghage companies in the last four years that um, might not be all that "prime" now, either, really. How long would you pay a mortgage to buy a house that was worth half what you paid?

Stock market wise, as it is, I don't see hugely much more value in most sectors than there was there the day after 9/11, actually possibly less with vastly higher oil prices. I mean, the increase since say 1987 much more definable - lots of computers etc have vastly improved efficiencies. So there could be a bit further down for that to go. Could anyone have seen this crash coming? Yeah, i think so. Even I went mental at a portfolio-flogging bod (in RBS as it happens) about 12 months ago, pulled all the money out, since when that particular product has gone down another 30% at least. There are some interesting statistics regarding stock markets. There is one i hazily remember about the fact that if there is a fall in Jan, there'll be a fall over the whole year. Another one is that if you take the whole of the rises in stock market indices since um, a very long time ago, over 96% of the rises have been between november and april winter months. Hence "sell in May and go away" i spose.

But if the questioner is questioning the whole notion of free market economics, um, well planned economics and marxism didn't work out too well did it? At least there'd be no banking crisis - cos we'd all be skint anyway. Perhaps it's time to revive my idea of the NBS - the National Boat service, which provides a boat for everyone who needs one, and (most important principle this) *free* at the point of delivery. I bet the boats provided by the NBS would be quite crummy though, hm? Bit like the NHS and everything else a bit governmenty-provided.

Fact is that governments should be small. But the UK has a Big government, this one spending now more than TWICE what was spent in 1997 in real terms. But they should not be stupid. At the moment the UK has big, and stupid, government. Check this by asking yourself - who makes the very best....anything? Pavements, food-making, teaching, whatever - if someone works for the government (or at least the UK government if not all governments) it's likely to be a bit rubbish for the most part. Our brightest people don't work for the government, our best builders, lawyers, teachers, security experts, accountants etc etc don't work for the government, or not directly anyway. Okay, there's the medical industry - but even there the UK generally leads the way in being free, not in being fab. Yeah, there are exceptions, but they're exceptional.

I would love this to change but it seems distant at the moment. It will be even more distant if there is a change to (er what - a planned economy?) cos of course far more people will move out of the country than already have done. I reckon it a huge balls-up of the Thatcher government that they did not welcome hong kong residents to give the UK a brain top-up. Yeah, look, i dissed the Thatcher government, bet yer didn't see that coming hm?

So ahem, anyway, setting rules, organising defence, policing and maintaining rule of law - and taking a long view in all of these, is what governments should do. Not rasing oodles of tax and then frittering it away employing as many people as possible. Long view would still have a royal yacht Brittannia, might have guessed Falklands, would definitely have guessed this crisis. Long view in US would also have easily guessed Pearl Harbour and possibly 9/11 as well. Nulabor is so daft that even Tblair sold his house in 1997 at the bottom of the market and bought another some years later right at the top. So not much chance of brilliance or foresight anytime soon.


Posted: Wed Oct 08, 2008 12:43 am
by Nick
Hi Matt

Did you get your champagne refund?

Re: Champagne

Posted: Wed Oct 08, 2008 12:59 am
by tcm
Nick wrote:Hi Matt

Did you get your champagne refund?

Um, yes i did actually. Swmbo rang the credit card companmy, put a hold on the whole transaction and with a bit of e-bullying they refunded the somewhat rippy champagne sale. (For others: we were at a restaurant, bit sloshed, and the pushy sommelier offered champagne, we said rose, and he then served their most expensive champage at £63 a blimmin glass. I wouldn't have minded if they had said woah guys, it's £63 quid a glass but we just drank it. Swmbo was most cheesed off cos she didn't have any.)

But all sorted now. Maybe swmbo should be in charge of government a bit. I have always thought that Anneka Rice should have been put in charge of major construction projects, definitely.

Posted: Wed Oct 08, 2008 9:36 am
by Ocklepoint
Here's a naive sort of question.

If it was ok to let the mining, textile, steel, ship building etc industries go to the wall in the name of the free market then why not the banking industry?

If a fraction of the money now to be spent on bankers had been spent on some of the older industries then perhaps we would not be faced with the intergenerational unemployment and its attendant problems that we now have.

I think . . .

Posted: Wed Oct 08, 2008 9:52 am
by Nick
why not the banking industry?

Isn't it something to do with the fact that if they do let the banking industry go to the wall everything else will go there as well, and only China's got one long enough . . .

Posted: Wed Oct 08, 2008 10:15 am
by Ocklepoint
So they'd have you believe.

But then who controls the media?

Poof ...

Posted: Wed Oct 08, 2008 2:01 pm
by ParaHandy
Ocklepoint wrote:If a fraction of the money now to be spent on bankers

... the amount that we've comitted to the banks worldwide is close to or even exceeds the cost estimated to combat GW. There is now, I would have thought, absolutely no chance of any concerted effort being undertaken whether warranted or not. That option has just gone .. poof

Posted: Wed Oct 08, 2008 5:34 pm
by Alcyone
To me, one of the best things about being on a boat is it gets you away from all of this. Things that are vitally important are reduced to missing a rock, catching a tide and whether, maybe, the inshore waters forecast has changed since you last heard it. Ultimately, when all is said and done, what sticks in your mind is a particular sunset over the sea, the birds and seals and the company of friends over a beer, tired at the end of a long day.

Yes, even the simple pleasures of boating are, to a greater or lesser extent, affected by the banks, but there is not a great deal I can do by worrying about it.

Lovely cold still evening down here in Wales.

Re: Poof ...

Posted: Wed Oct 08, 2008 11:17 pm
by Telo
ParaHandy wrote:the amount that we've comitted to the banks worldwide is close to or even exceeds the cost estimated to combat GW.
Um, seven for effort, I'd say....