Comments on: It’s not all going to plan, Chancellor

By: Derek

Derek — Mon, 27 Oct 2008 04:17:59 +0000

Absolutely not over. The parlous state of the real economy is unprecedented in living history. I could provide endless examples, but Mr Redwood won't like careless talk so I'II stick to a couple of recent examples in the public domain (although I don't think his readership is populist enough to have much effect on general sentiment). Volvo truck sales in Europe have plunged 99.7% from 41,970 in the third quarter 2007 to just 115! this quarter. In China more than half of all toy factories have gone bust, these figures are not a small decline in demand. In the business I work in we bale up our waste plastic and cardboard for collection and usually receive a sizeable cheque for a truck full. Now it is stockpiling rapidly because no-one will take it away for free, or even with a payment from us, as there is no demand. Councils will be busy collecting up and sorting recyclables, but nobody wants them they'll end up landfilling it whilst council tax bills soar with the cost of the landfill tax. I predict that the banks will only be the first in a long line of large corporates to go panhandling to the government and it will now be very difficult to turn them away.

By: Derek

Derek — Mon, 27 Oct 2008 03:54:05 +0000

I'm glad Lynne Truss has popped by. I'II concede I've missed the 'h' from rehabilitate, but not so fast. It is the bank depositors who have 'baled-out'. The banks themselves have been the recipients of a bailout, that is the government has paid a security for their release. I'm unaware of 'bale' ever being paid to a court.

By: TrevorsDen

TrevorsDen — Sun, 26 Oct 2008 23:06:26 +0000

hmmm …. pedantry rules but if we are spending a fortune of our money in 'rehabilitating' the banks I think we should at least use the right word … 'baled' out.

Why do people worry about Conservative policy. We must presume the next election is 12 months away at least. Who the hell knows what the world will be like at Christmas?

Today Parliament is just an elected dictatorship with a supine vassal feu paying left wing TV looking on, and an ill educated electorate soporosed on Strictly Come X-Factoring On Ice and incapable of reading anything but the funny pages of the newspapers.

Conservative policy is not the point. Policy will be dictated by events – its laughable to think anyone will have any choice – better to have an unsullied hand manning the pumps and deciding who to throw overboard.

By: Bazman

Bazman — Sun, 26 Oct 2008 23:03:31 +0000

Not to mention the politicians John. Don't forget them in this story.

By: Adrian Peirson

Adrian Peirson — Sun, 26 Oct 2008 21:28:39 +0000

People need to realise that the Government Knows exactly what it is doing.
All of this is Deliberate, we are headed for a One World dictatorship, One ( divided ) People, One Bank the World Bank ( those loans come with provisos ), one Governement ( the UN ), one Army (NATO).
All of this is deliberate.
They do not believe in private property, they want your house paying rent, and they want us all working for them.
The Iron curtain is falling once again and this time, we are on the Inside, this time it will be much worse, because this time, there will be no one on the Outside to challenge them.
http://www.infowars.com

By: Donitz

Donitz — Sun, 26 Oct 2008 14:16:20 +0000

John,

The more I read your blogs the more I realise that my perception that many politicians are spineless and full of self interest could be wrong. I am not jumping on the band wagon of blame here, it is just the impression I am often given.

We need action, urgent action. We need a great leader, an orator to inspire, drive and to dish out the "ruthless economic medicine required". Thatcher in the early 80's is an example or even Hitler in the 30's. (For the avoidance of doubt I am not a Nazi).

Have you considered that your party leader may need a bit of prompting?

By: FatBigot

FatBigot — Sat, 25 Oct 2008 23:49:00 +0000

In the same way that government needs to acknowledge its past profligacy and face up to the need to cut spending, so do many households. New flat-screen tellies and optional electronic wizardry will not be on the budget for some time to come. A slow and steady reduction in available credit will ease the recession only if the credit that is available is taken up. I suspect demand for credit will fall dramatically now that we are "officially" in recession. If this is correct, there will be precious little the government can do to manage the fall in consumer spending and, therefore, to manage the depth of the recession.

By: Bazman

Bazman — Sat, 25 Oct 2008 22:11:46 +0000

So? Where have these "markets" got us? Fat fantasy of the "Muddle Classes" Idiot right wing philosophy even. Is it paid for? You've got to laugh. Bailiffs are quite right wing I am lead to believe. I could join in at higher level, but if you are not affected, then it all could be a bit academic…

Reply: Markets got us a lot further than communism got China and Russia – pity about the Central banks and Regulators.

By: mikestallard

mikestallard — Sat, 25 Oct 2008 16:36:18 +0000

What worries me so much is this.
Up till now, I hoped that the Conservatives would come in and try desperately to put the damage done by this awful government right. Sort of like Mrs Thatcher, except that there are now different dragons to slay (debt, waste, too big a state, too much noseying into people's private lives).
I must confess that I am now having doubts.
(Piece re Mandelson left out).
But, just when we were all waiting for a statement like yours above, all we get is derision. Did you listen, for instance, to the news Quiz today when the BBC under Sandy Thingummy wittily told us all about how George had been sent to bed without any supper? Or the Simon Heffer who also got in his threepence in the Telegraph?
Apparently Gordon Brown lost his temper when he saw Mr Osborne smirking on the front bench. That was why he promised an investigation.
I do not know what the official Conservative policy now is.
Does anyone?
Meanwhile the Liberals are saying that there ought to be tax cuts to help small businesses. I understand that.
Please don't let us all down in our hour of need!

By: Cliff

Cliff — Sat, 25 Oct 2008 14:23:12 +0000

John,
A very thoughtful and interesting piece.
As I have stated before, I know nothing of economics other than this, if I earn a pound and spend nineteen shillings I am OK, if I earn a pound and spend a guinea, I am in trouble: It seems the current, along with all the previous Labour governments, have failed to realise this one simple fact.
I also know that when I have a glut of anything, one saves some of it for a time of drought, be that financial or otherwise.

I do feel we are talking ourselves deeper into the crisis and it has become, in essence, a self fulfilling prophesy.

Perhaps you can answer this that has been troubling me now for sometime, we were told that HBOS was a sound business and we were told the Lloyds was a very sound business that had been very prudent in their risk policies. What actually happened, virtually overnight, that turned these two sound businesses into being on the verge of collapse?
Why, if the state is giving aid to the banks, does the merger of Lloyds and HBOS have to go ahead, surely it makes more sense to spread the risk over two businesses, rather than put all the taxpayers' eggs in the one large basket? It also does not allow the state via Lloyds/HBOS to operate a virtual monopoly within the mortgage sector which would be likely to stifel competition.

As I say, I don't understand banking or economics, but I do find your threads interesting and I thank you for them.

Reply : I don't think the taxpayer should pay for a merger of two such large businesses. B Nor do I believe them to be as weak as some suggest – the regulator was clumsy in demanding extra capital at a difficult time.