Perhaps Alistair Darling should have listened yesterday to the wise words of that well known philosopher Ronan Keating...
YOU SAY IT BEST, WHEN YOU SAY NOTHING AT ALL
His statement to the House of Commons yesterday said nothing he hadn't said before. The markets were looking for political leadership and all they got was piss and wind. The phrase of the moment seems to be "We'll do anything we have to", a phrase which is rapidly replacing "making the difficult decisions" in the lexicon of political parroting. It's all very well saying these things, but they are meaningless when unaccompanied by firm action. In some ways it is perhaps a tacit recognition that in the end the markets will have to right themselves and find their own level. When even a $700 billion bailout agreement in the US fails to calm the markets, I suppose it's understandable if British and European politicians feel a little helpless.
After an all too brief recovery early this morning the stock market is falling again, with the Royal Bank of Scotland losing 30 % of its value. All hopes are now being pinned on an interest rate cut this week. Would this restore market confidence? I cannot judge, but as everyday passes our situation becomes more worrying. We're told our economy is best placed to withstand global pressures yet our currency has fallen more than any other, we have more banks in trouble than any other, unemployment rates are growoing faster than most and inflation appears to be spiralling.
One thing is for sure. This is not a temporary economic blip. It will take many many years to recover from. And it will change the terms of the whole economic debate. Remember 'sharing the proceeds of growth' anyone?
42 comments:
Ah - well done for waking up Iain
It continues to beggar belief that polls show the electorate give a (narrow) lead to Brown and Darling to 'see us through' this crisis. Yesterdays effort was absolutely appalling.
Browns sole aim in this crisis is to improve his poll ratings. I must repeat that if there has not been an almighty row at this mornings cabinet meeting then the whole damn lot of them are ----ing useless.
"inflation appears to be spiralling. "
No evidence of that. If anything, it'll be below 2% within a year.
Interest rates are going to come down - that would not happen if inflation were spiralling.
No sign of inflationary pressures in the commodity prices, or wages.
We know one thing - When Darling makes his decision, Gideon will be hoping he's tipped off 2 hours before the announcement so that he can "advise" him to do what he's already decided.
A co-ordinated response is required - Merkel spooked rather than re-assured as what she proposed was clearly not deliverable.
Darling was useless yesterday, but wasn't attacked for being so. Osborne cannot just stand there and say he'll back the government.
Anonymous @ 10.46: you must be living on another planet if you think inflation will fall in the next 12 months, and if interest rates drop it's not because of low inflation, it's because they can't think of anything else to do
Don't forget "Getting on with the job". Not that he has any idea how to do the job.
Ooh I like it when you get angry!!
HMG needs to do *something* and fast before everyone falls over. Perhaps a Japan-style industry nationalisation really is the best solution now. Rate cuts and tax cuts too.
LOooooooooooooooooooooooooOL
The pathetic use of "Gideon" instead of Osbournes chosen name is pathetic. It adds nothing to what you have to say: co-ordinated action is fine and dandy but the Germans last weekend spoke the language of co-operation and then did the actions of begger thy neighbour.
Labour are useless, absolutly useless and need ejecting from office asap.
Iain in view of Dave's call for 'part nationalisation' of the banking system, can you explain why Redwood isn't singing from the same song sheet?
There is no case whatsoever to nationalise more banks, let alone for taxpayers to be made to take equity stakes in all the banks. There is a new kind of madness stalking the government world, as the governments lurch from one inappropriate response to another in response to a fast moving banking crisis. Governments helped create the crisis, by keeping interest rates too low and looking the other way as the banks and Shadow banks heaped debts on debts. Then governments helped bring the crisis on by keeping interest rates too high and refusing sensible help in the early stages of the crunch.
Governments should look after taxpayers. Taxpayers cannot afford to nationalise the banks. If governments assume too many new risks by taking on the assets of the banks or buying them up, it merely shifts the problems from the private sector to the public sector. It does not solve it. The problem will then become how do governments pay all the bills? How can they finance themselves in a non inflatonary way? How high do taxes have to go? A banking crisis does not suspend the laws of public finance. Buying bank shares is just like hiring teachers or buying more paperclips for a government office - only less popular with the taxpayer.
John going off on his own?
Oh! by the way, who do you agree with?
@ Anon 10:46
And you seriously believe that Darling 'decides' anything at all?
He doesn't even change his knickers without Brown's approval.
And Brown's 'decisions' are those of a man entirely driven by external influences. He couldn't even 'decide' to hold an election.
I do agree with you that the goalposts on the economic debate have changed. I imagine that is why Broon was looking so smug during Darling's statement - the Conservatives will need to show what they would do differently to Labour now that sharing the proceeds of growth is so much hot air. I will look forward to seeing what they come up with; in the meantime, Broon can smugly do as little as possible (difficult to do anything else in the teeth of this storm).
anonymous 10.46 a.m.
Do you sit in the cabinet? 'Cos that's the sort of trash I hear from every Labour lickspittel out there.
'Interest rates are going to come down - that would not happen if inflation were spiralling.'
They can cut interest rates to zip and it won't make an iota of difference. The markets are making interest rates now - witness LIBOR. The Bank of England are now pushing on a string - NOTHING will happen except LIBOR increasing.
Regards commodities. yes they have fallen in DOLLAR terms. Meanwhile, sterling has fallen 30% from it's high so that rules out any big drop in prices.
Wages - what are they? They'll be falling before long, the National Minimum Wage being a thing of the past. A job on £3 an hour is better than no job at all.
And then you go on to make some Mickey Mouse, dips**t political comment.
Get a life, you p***k. The whole UK economy depends on what Brown does in the next 5 days or so. And you political point score. What a dick!
we have all been living in a fools paradise for the last 10 years, and the government wanting to take all the credit (pun not intended). The end of boom and bust parroted Brown. Nick Leeson is correct this morning to point the finger at the government and regulators.
Changing interest rates will not affect the mortgage rate as it is the Libor that is most important. It is confidence in banks that is the problem and the loans from mortgage companies like Hypo in Germany.
The oil price is on the way down, the dollar is up and the Euro is slipping. Bread prices at Tesco have moved down and I expect price cuts on a lot of food products and manufactured goods as spending drops. Car sales are down and the second hand car market is on the floor. House prices are falling with more to come as the buy to let market implodes. Rents will also fall.
Commercial building will cease and new house building has ground to a halt. Unemployment will increase slowly as firms shed labour and cut costs. There is talk of it hitting 2m next year, this could be optimistic.
With commodities the prices are falling with metals as always in the vanguard. Only gold may hang on but we can't eat it and don't make much with it. Everything else will make things cheaper. How about a $50 barrel of oil? At $1.45 to the pound it's not that good really but the US will like it.
It may seem like doom and gloom but there is light at the end and our economy is more flexible than most. Try cutting jobs in the other EU countries! They still have high unemployment from the last recession.
Labour may seem to be a dead duck at present, but they are still in power and there are a lot of natural Tory voters who will not vote for Cameron. It is not a foregone conclusion that he will win and there is time for mistakes.
Annon 10.46
Inflation is rampant - of course it will 'come down' in 12 months, thats a statistical inevitability as the last years price rises work through, but the index itself will still reside higher. If the index comes down then we are in deflation and boy if thats the case we really will be in a deep deep recession.
Browns smirking behind Darlings back shows just how much he WANTS a political free for all as he wants to accuse the opposition of scaremongering etc. The Tories are wise to be cautious.
Would a new captain have stopped the Titanic from sinking? No. But thats not the point --- Brown and co have led us into this mes and they deserve to be thrown overboard. We need a new untainted broom to pick up the pieces.
There is no neat solution to the mess Brown has led us into (only a very very painful one). But the pathetic haphazard way Darling the monkey is responding to Gordon his organ grinder's promptings is making things far far worse.
God help us if we need to nationalise the banks - what they need is recapitalisation and right now the only way to do that is from us the taxpayer. Exactly how its done and can be later undone is the issue.
Quite frankly the idea that ANYBODY knows whats going one is just risible.
Brown has led us into the shadow of a financial Armageddon. Lets get the scale of todays mess in clear perspective - The Chancellor gets up to issue a statement (dictated by Brown) and the very next day there is a melt down in UK banks. Is this competent government?
Sorry if this is 2ce - more gremlins
@ Anonymous 10:46 AM
Quote of what you said:
__________________________________________
"inflation appears to be spiralling. "
No evidence of that. If anything, it'll be below 2% within a year.
__________________________________________
Can I please have some of whatever you're smoking? Thanks!
"We're told our economy is best placed to withstand global pressures"
They're lying. It's what New Labour do.
They learnt the lesson from that Paxman / Howard interview. It is better to be caught telling a lie occasionally than to tell the truth. This is particularly true with largely compliant press and television.
anonymous of 12.28
you, like the ridiculous pajam-clad "contributors" get your stories form the tabloid-o-sphere.
Inflation is headed for sub 2% in around nine months. This allows for an interest rate cut now. Rates are set according to what inflation will be, not what it is.
It has spiralled, but it has stopped spiralling, and is heading south.
No amount of empty-headeed pathetic crud will change that.
According to the FT we're all Social Democrats now!
There is still plenty of acrimony in the UK, with the Tories hammering Gordon Brown, the prime minister. But look beneath the point-scoring and the two main parties agree on what a modern economy should look like. David Cameron, the Tory leader, said: “I have never believed in just laisser-faire. I believe the government should play an active part in helping business and industry.”
Most mainstream continental European parties have long signed up to the old social democratic slogan “the market where possible, the state where necessary”. Both large British parties now do too.
In 1979, when Thatcherism confronted Labour’s socialism, Time magazine exulted in an election that presented voters “with a clear choice, not an echo”. No longer. In the UK, everyone is a social democrat now.
Are you Iain?
I do think the media is whipping up hysteria about the banking sector. All morning Sky News, BBC News, and BBC News on the radio have gone on about savers not being able to take money out of ICESAVE in the UK. The thing is only 300 people affected in the UK, a figure not reported in all mentions of the bank but mentioned in passing in the BBC News at One. Thoughts?
YOU SAY IT BEST, WHEN YOU SAY NOTHING AT ALL
Surely you mean Dave Call me Dave Camera On.
A few weeks ago when Darling was warning that the situation in the markets was bad and would get worse , you lot were claiming he was running the economy down, you all had a field day.
Now he was proven right and you are still having a field day.
Then he tries to calm the situation, still you lot harp on. Flip Flop Flip Flop, you dont know if you are coming or going.
Last week, we love bankers, this week we hate them etc etc
Will the Tory Party be returning its many donations it received from Lehman Brothers.
Jesus! Who let Sion Simon back on the computer... (Anonymous @ 1.22pm)
Tell me, is you a proper blogger?
***Will the Tory Party be returning its many donations it received from Lehman Brothers.***
Maybe once Labour has returned Paul Myner's cash.
We cannot possibly end the debt spiral by extending more money. We should embrace the recession.
Interesting comments to CoffeeHouse suggesting that Osborne opened his big mouth re a confidential BoE briefing, resulting in him being blamed for some major losses.
dalesman said...
"Darling was useless yesterday, but wasn't attacked for being so. Osborne cannot just stand there and say he'll back the government"
But he did, and he does.
Also managed to force out a couple of partisan jibes though - as you do, when things are really, really serious and the public are worried.
So useful and helpful.
Oh dear - when Dale starts deleting perfectly resonable posts that tell the truth, you know that the blue boys are RATTLED
If you have allegations to make against someone, then feel free to do so. But under your own name, not anonymously. Grow up.
Wonder how Alastair Darling's little drinks party went last night? Nothing like a little get-together with the media to get you through a crisis. Nero fiddled and all that...
Andy R: you're quite wrong about your figures. It's about 200,000 savers. Plus the knock-on effect. If the Icelandic Government can't compensate under its guarantee scheme, what's the worth of any government guarantee? Do you seriously believe the Irish would be able to pay out to all those in the UK who've put money there? The one thing which must not happen is that savers lose money - otherwise, what looks bad will look a whole lot worse.
Zeddy said...
***Will the Tory Party be returning its many donations it received from Lehman Brothers.***
Maybe once Labour has returned Paul Myner's cash.
October 07, 2008 1:53 PM
errrrr Paul Myners neither works in the city or for hedge fund shorting.. So whats your point.
Mynerswas chairman of Guardian Media Group for the past 8 years and has ran some government commissions. yes he has given money to the Labour party.
But you lot are losing all your secretive donor from the city, personaly I hope they all take a trip to the 20thn floor and do us all a favour
andy r at 1.02
Not true about the Biased Blikered Corrupt - I saw Peter Jones on BBC Breakfast telling us it'll all be over by Christmas.
I agree with him. Stop talking us all down.
Anonymous said...
"Nick Leeson is correct this morning to point the finger at the government and regulators."
I've just heard him on the Beeb.
Is it just me, or are things getting a touch surreal when Nick Leeson is asked to comment?
Oh dear Mr anon-troll
http://www.order-order.com/2008/09/gordon-browns-millions-from-hedge-fund.html
Paul Myners is a director of the hedge fund manager GLG, which with $25 billion under management is one of europe's biggest hedge fund managers. It was until recently 10% owned by Lehmans.
He has donated to Labour and Brown personally and I think his company made a killing selling B&B short
http://www.telegraph.co.uk/news/newstopics/politics/labour/3131010/Financial-crisis-Gordon-Brown-sets-up-economic-war-cabinet.html
And as a by the way -
Guido blogs that the BBCs Robert Peston is much to blame for the crisis - one of his City commentators says
"Once again, the political imperative to make Gordon Brown look involved and competent has put in jeopardy the already fragile UK banking system and the markets upon which it relies."
Lets see someone rapidly rebut that.
***Lets see someone rapidly rebut that.***
OK here goes...
(stamps foot and bursts into tears)
Words - oh you are funny Iain
Tory lips were sealed while short-sellers ravaged HBOS.
Cameron didn’t care or dare bite the hedge-fund hands that feed them. Cameron should be ashamed of himself. He shouldn’t rub shoulders with these merchants of doom
Trevorsden - are you anything to do with ex-Sun "Editor" and Sky News Murdoch-droid bore Trevor Kavananagh? You scan a little like him!
Personally I doubt that anyone this side of the pond can have much influence on the crisis, other than via some public floundering/flouncing.
What does seem clear though is that our lovely banks (the people who brought you penalty charges and grotesque service levels) are eager to cash in. Where better than the public purse!
One of the talking heads from the British Bankers Association (what a fine body of honest people!) was on TV this morning explaining why they need to raise overdraft interest on small businesses. "It's because that money costs us more on Libor now" he explained, lying through his teeth. The money assigned to overdrafts was already borrowed some time ago.
Ker-ching. Cash in all round. And what do we hear from politicians by way of protest at the bank's behaviour? Not a sausage. Why? Do parties have overdrafts?
I wish I had Kavananagh's money.
Labour have received donations from a whole raft of short sellers as have the LibDems - don't, all you pathetic load of Anonymous trolls, try to lie to us. There is no short selling now by the way - it has not stopped a collapse, indeed I am told that short selling might have eased it.
My memory was that there was very little short selling in the recent run on HBOS and the FSA could find no evidence of any in the more distant fall in its shares.
Lets be clear this is not something just to do with the other side 'of the pond'. British and Euro banks have been lending disastrously for some considerable time --- all completely unregulated (or badly regulated) and completely off the radar of our one time chancellor and the current one.
Lets be clear they NEEDED all this borrowing to keep their plates spinning. They were involved in the economics of eating their own entrails to survive.
Someone seems determined to try to suggest that Labour and Brown supporting Lord Myners is not a director of short selling hedge fund GLG.
I guess the good Lord will have to sue The Times ...
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1982461.ece
"Paul Myners, the chairman of Land Securities and author of a report on fund management transparency, is to become a director in GLG Partners"
... and Mr Anonymous will have to shut up.
I knew that this thread would be a wrong-'un as soon as I saw "When You Say Nothing at All" ascribed to Keating. That's a perfect example of the Tories' congenitally-weak long-term memory, and therefore lack of any sense of perspective (matched, as evidenced above, by equally dismal punctuation and linguistic-competence), which explains their consequent re-writing of history.
The song (written by Paul Overstreet and Don Schlitz) goes back to Christmas 1988, when Keith Whitley had it at the top of the Billboard chart. The best version, by a long country mile, is Alison Krauss's (originally in 1995, but variously retreaded on later albums, especially "Live"). Keating's is the come-lately, home-archipelagic effort from as recently as 1999.
After so much misrepresentation, without getting beyond the header for the thread, why should I be surprised by the balderdash, calumnies and descent into foul abusiveness that ensued from so many self-appointed great "intellects" of the Right?
Am I alone in noting all these recent warnings that the next danger to the world, the universe, the economy, jobs and whole shebang is .... wait for it ... deflation?
Stop qouting Guido as a source of correct data - he is NOT
And for the record, dale likes to delete this face, Guido isnt even a British Citizern or Britiah tax payer.
He is an Irish man who lives and pays his taxes in Ireland.
Not a Great Brit holding up Tory ideals
Sorry! BBC News missed three digits off...ICESAVER has 300,000 savers in the UK not 300
Booboo alert...Sophie R said the wrong number...300,000 Icesave customers in the UK not 300...oops...sorry my comment suddenly seems a bit stupid
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