Comments on: Some good news for a change http://johnredwoodsdiary.com/2008/10/13/some-good-news-for-a-change/ Incisive and topical campaigns and commentary on today's issues and tomorrow's problems Thu, 09 Feb 2012 20:05:58 +0000 hourly 1 By: T. England http://johnredwoodsdiary.com/2008/10/13/some-good-news-for-a-change/#comment-6999 T. England Wed, 15 Oct 2008 06:43:44 +0000 http://www.johnredwoodsdiary.com/?p=1779#comment-6999 I believe were doing this bail out all wrong! As in, it just shouldn’t happen! By doing this bail out we are basically, as far as I can tell, just trying to keep the status quo, even down to getting CREDIT flowing again, why? Apart from the obvious, what has Britain got left?! We don’t manufacture much any more because British people want too much money to work, or to live on or something! & so people over seas now do all that type of work for us, we don’t grow much anymore because that can be produced over seas much cheaper than we could here & so we have acres of fields out there not doing anything & the people that could work those fields are sitting at home claiming benefits, I could go on & on but the point I’m trying to make is that as much as I love capitalism, it’s not working for us! As a country we seem to have become weak & indebted to all & sundry, now we are told we have to GAMBLE money that the government apparently has stashed away, to help people out who have let us down just so they can make more money out of us with goodness knows how much of it going over seas! Something’s wrong! Very wrong! How am I supposed to look at this all? When I go to work it’s for a foreign owned company & when I come home at night I switch on power that is owned by a foreign company & when I phone to complain about the company I’m put though a foreign helpline & when I go out to buy some goods they are grown or made over seas, ok! You get the point, so am I some kind of protectionist person just because I want to see as much as possible of the above done in house? Nope! Just some bloke who wants to feel like all I do in Britain is for my fellow Britain’s, my neighbours & friends, am I being too simple here? This bail out isn’t just about banks saving face is it? Aren’t countries leaders saying to each other, look we have money? We can just buy up banks! BIG DEAL! We still have people on the poverty line in modern day Britain, we have people working for a low wage because of the opportunities that they have to pay for by being a member of the EU! Apparently we can pump Billions into failing banks but cant pay for the best of this & that for the people who put that money there in the first place that is being given on there behalf! What to do!? I know! DON’T give the money to the banks, just open a new bank & put billions into that & then open accounts with cash in for the people who’s banks don’t make it, Simple! Capitalism has become far too expensive & far to complicated, I say we opt out for a few years & do a good life! Yep! Trade in potatoes if need be! Open new factories with money not credit & then put in people who will work for a fair wage that make products at a sensible value that sell for what it’s worth, I’ll stop here! Coming over all simple again! A new form of capitalism is needed not the resurrection of the old one! I believe were doing this bail out all wrong! As in, it just shouldn’t happen!
By doing this bail out we are basically, as far as I can tell, just trying to keep the status quo, even down to getting CREDIT flowing again, why?
Apart from the obvious, what has Britain got left?!

We don’t manufacture much any more because British people want too much money to work, or to live on or something! & so people over seas now do all that type of work for us, we don’t grow much anymore because that can be produced over seas much cheaper than we could here & so we have acres of fields out there not doing anything & the people that could work those fields are sitting at home claiming benefits, I could go on & on but the point I’m trying to make is that as much as I love capitalism, it’s not working for us!

As a country we seem to have become weak & indebted to all & sundry, now we are told we have to GAMBLE money that the government apparently has stashed away, to help people out who have let us down just so they can make more money out of us with goodness knows how much of it going over seas! Something’s wrong! Very wrong!
How am I supposed to look at this all?
When I go to work it’s for a foreign owned company & when I come home at night I switch on power that is owned by a foreign company & when I phone to complain about the company I’m put though a foreign helpline & when I go out to buy some goods they are grown or made over seas, ok! You get the point, so am I some kind of protectionist person just because I want to see as much as possible of the above done in house? Nope! Just some bloke who wants to feel like all I do in Britain is for my fellow Britain’s, my neighbours & friends, am I being too simple here?

This bail out isn’t just about banks saving face is it? Aren’t countries leaders saying to each other, look we have money? We can just buy up banks!
BIG DEAL!
We still have people on the poverty line in modern day Britain, we have people working for a low wage because of the opportunities that they have to pay for by being a member of the EU!
Apparently we can pump Billions into failing banks but cant pay for the best of this & that for the people who put that money there in the first place that is being given on there behalf!
What to do!?
I know!
DON’T give the money to the banks, just open a new bank & put billions into that & then open accounts with cash in for the people who’s banks don’t make it, Simple!

Capitalism has become far too expensive & far to complicated, I say we opt out for a few years & do a good life! Yep! Trade in potatoes if need be! Open new factories with money not credit & then put in people who will work for a fair wage that make products at a sensible value that sell for what it’s worth, I’ll stop here! Coming over all simple again!

A new form of capitalism is needed not the resurrection of the old one!

]]> By: mikestallard http://johnredwoodsdiary.com/2008/10/13/some-good-news-for-a-change/#comment-6998 mikestallard Mon, 13 Oct 2008 19:37:51 +0000 http://www.johnredwoodsdiary.com/?p=1779#comment-6998 Coal - the railways - heavy industry - motor cars - the arms industry. All these have been taken over once they failed into the arms of the government. And where are they now? The government simply is not capable of running things it does not understand. You, John, are rare - you have actually worked in the finance industry. Gordon Brown, the Chancellor, Mr Darling, Peter Mandelson have not. If the future of the banks is anything like those pictures we saw of the inside of the Treasury recently, or if all the details of the cards suddenly go missing, I am quite sure nobody will be surprised. And now that they are dealing in trillions, as you say, instead of billions, which they are splashing round like champagne at a car rally, we taxpayers look to be out for a bashing which will last a long time. Coal – the railways – heavy industry – motor cars – the arms industry.
All these have been taken over once they failed into the arms of the government.
And where are they now?
The government simply is not capable of running things it does not understand.
You, John, are rare – you have actually worked in the finance industry.
Gordon Brown, the Chancellor, Mr Darling, Peter Mandelson have not.
If the future of the banks is anything like those pictures we saw of the inside of the Treasury recently, or if all the details of the cards suddenly go missing, I am quite sure nobody will be surprised.
And now that they are dealing in trillions, as you say, instead of billions, which they are splashing round like champagne at a car rally, we taxpayers look to be out for a bashing which will last a long time.

]]> By: Johnny Norfolk http://johnredwoodsdiary.com/2008/10/13/some-good-news-for-a-change/#comment-6997 Johnny Norfolk Mon, 13 Oct 2008 15:02:30 +0000 http://www.johnredwoodsdiary.com/?p=1779#comment-6997 Labour are trying to turn what they have caused into an oppotunity to take over the banks. The day of reconing will still have to come. They just want to totaly run our lives and turn us into slaves. Labour are trying to turn what they have caused into an oppotunity to take over the banks. The day of reconing will still have to come.

They just want to totaly run our lives and turn us into slaves.

]]> By: Matthew http://johnredwoodsdiary.com/2008/10/13/some-good-news-for-a-change/#comment-6996 Matthew Mon, 13 Oct 2008 09:03:52 +0000 http://www.johnredwoodsdiary.com/?p=1779#comment-6996 Nicholas - the devil will be in the detail, but 'at the levels' does not mean in individual cases but as a whole, and I think John will say this is exactly what he has been arguing for with respect to Northern Rock. Nicholas – the devil will be in the detail, but 'at the levels' does not mean in individual cases but as a whole, and I think John will say this is exactly what he has been arguing for with respect to Northern Rock.

]]> By: Matthew http://johnredwoodsdiary.com/2008/10/13/some-good-news-for-a-change/#comment-6995 Matthew Mon, 13 Oct 2008 09:02:24 +0000 http://www.johnredwoodsdiary.com/?p=1779#comment-6995 Reply: The funding gap can increase - or decrease - as the riskiness of the assets changes. It is dangerous for a state to take on liabilities well in excess of national income, in case the assets fall away, leaving too large a loss relative to naitonal income and taxable capacity. Of course, but I don't think you woud argue the assets are worthless, and so what really matters is the difference between the assets and liabilities and over what time that would need to be covered. We're not talking about whether it is desirable, you are arguing that it is impossible, and I'm not sure you have made your case with the numbers you present Reply: I am not saying it is impossible. I am saying the taxpayer should not put at too much risk. The very large numbers mean if it does go wrong it will be very painful for taxpayers if we end up owning these banks. Reply: The funding gap can increase – or decrease – as the riskiness of the assets changes. It is dangerous for a state to take on liabilities well in excess of national income, in case the assets fall away, leaving too large a loss relative to naitonal income and taxable capacity.

Of course, but I don't think you woud argue the assets are worthless, and so what really matters is the difference between the assets and liabilities and over what time that would need to be covered. We're not talking about whether it is desirable, you are arguing that it is impossible, and I'm not sure you have made your case with the numbers you present

Reply: I am not saying it is impossible. I am saying the taxpayer should not put at too much risk. The very large numbers mean if it does go wrong it will be very painful for taxpayers if we end up owning these banks.

]]> By: Nicholas Hallam http://johnredwoodsdiary.com/2008/10/13/some-good-news-for-a-change/#comment-6994 Nicholas Hallam Mon, 13 Oct 2008 08:41:48 +0000 http://www.johnredwoodsdiary.com/?p=1779#comment-6994 John, Robert Pesto is saying that part of the deal with RBS, HBOS and Lloyds TSB is a commitment to "maintain lending to homeowners and small businesses at the levels of 2007". Will they come under pressure, then, to grant loans that they should prudently avoid? I'm sure I must be missing something, and wonder if you can help. Nicholas Hallam John,

Robert Pesto is saying that part of the deal with RBS, HBOS and Lloyds TSB is a commitment to "maintain lending to homeowners and small businesses at the levels of 2007".

Will they come under pressure, then, to grant loans that they should prudently avoid?

I'm sure I must be missing something, and wonder if you can help.

Nicholas Hallam

]]> By: Kit http://johnredwoodsdiary.com/2008/10/13/some-good-news-for-a-change/#comment-6993 Kit Mon, 13 Oct 2008 08:41:09 +0000 http://www.johnredwoodsdiary.com/?p=1779#comment-6993 RBS and HBOS should have been left to die. Life as the living dead under Labour rule will be cruel. How long before demands are made for union representation on the board? More women and ethnic minority in senior management? Solar powered dealing desks? RBS and HBOS should have been left to die. Life as the living dead under Labour rule will be cruel. How long before demands are made for union representation on the board? More women and ethnic minority in senior management? Solar powered dealing desks?

]]> By: Matthew http://johnredwoodsdiary.com/2008/10/13/some-good-news-for-a-change/#comment-6992 Matthew Mon, 13 Oct 2008 08:21:14 +0000 http://www.johnredwoodsdiary.com/?p=1779#comment-6992 I don't think the figures you give on bank liability, public spending and GDP are entirely the whole story. The banks also have assets, and you have to look at it over a number of years. What's important is whether the government/state/nation can cover the funding gap. Willem Buiter looks at the numbers here. <a href="http://blogs.ft.com/maverecon/2008/10/are-the-fiscal-pockets-deep-enough-to-save-the-banks/" rel="nofollow">http://blogs.ft.com/maverecon/2008/10/are-the-fis...</a> One problem for the UK is that its banks have a lot of foreign currency liability, which as we saw in the case of Iceland is hard for a government to deal with without debasing the currency (and even then not necessarily possible). This will always be a problem for a small country with its own currency - the UK is not that small a country so hopefully it will be OK. Reply: The funding gap can increase - or decrease - as the riskiness of the assets changes. It is dangerous for a state to take on liabilities well in excess of national income, in case the assets fall away, leaving too large a loss relative to naitonal income and taxable capacity. I don't think the figures you give on bank liability, public spending and GDP are entirely the whole story. The banks also have assets, and you have to look at it over a number of years. What's important is whether the government/state/nation can cover the funding gap.

Willem Buiter looks at the numbers here.
http://blogs.ft.com/maverecon/2008/10/are-the-fis…

One problem for the UK is that its banks have a lot of foreign currency liability, which as we saw in the case of Iceland is hard for a government to deal with without debasing the currency (and even then not necessarily possible). This will always be a problem for a small country with its own currency – the UK is not that small a country so hopefully it will be OK.

Reply: The funding gap can increase – or decrease – as the riskiness of the assets changes. It is dangerous for a state to take on liabilities well in excess of national income, in case the assets fall away, leaving too large a loss relative to naitonal income and taxable capacity.

]]>