There are rumours circulating in the USA that the authorities are thinking of a back door way of reviving quantitative easing.
The aim would be to sell the mortgage portfolio held by the Fed, so they could use the money released to buy yet more US Treasury bonds.
The plan might include seeking the early repayment and refinancing of these risky mortgages at lower interest rates. The deal would be that the mortgage holder gets a lower interest rate and a refinanced mortgage in return for promising to meet the reduced payments. Fannie and Freddie might be asked to do the refinancing and hold the new mortgages.
If the original lenders took the hit – and could afford to – and if thereafter most of the mortgage holders could meet their payments on time at the lower interest rates, we would see good progess in solving the US mortgage/housing problem.
However, if taxpayers effectively took the hit, and if state backed mortgage companies ended up with a portfolio of mortgages that still looked risky, all that has happened is another extension of US federal and related debt, with substantial new money creation into the bargain.
The President would be happy, because a large number of mortgage holders would just have received a windfall reduction in their debts, and might be grateful to him. The Fed might be happy, because they could undertake their QEIII but claim they had the money from the sale of the mortgage assets. The losers would be the savers, facing a longer period of lower rates and higher inflation than otherwise would be the case.
Meanwhile today’s story is possible legal action against the banks that packaged up mortgages and sold them on, only to pose financial problems to markets later. If this is the plan, it marks the third stage of the crisis.
In stage one, the age of collaboration, governments encouraged banks to lend more and more money to more and more people least likely to afford the loans, in the interests of growth and wider ownership. In stage two, the age of entanglement, governments subsidised the banks in an effort to shore up the dodgy loans and weakened balance sheets brought on by the previous collaboration. Now we might enter the third, the age of retribution, when fighting over the blame entails governments demanding banks repay, say sorry and even face legal charges.
The truth is, governments and banks are hitched together in all this. It suited governments to see easy money and loads of loans prior to 2008. It suited bad banks to be nationalised or bailed out when the authorities lurched to a super tough monetary policy in 2008-9. Now we are witnessing the fight over blame and over pays the bills, as the borrowing has run out.
September 2, 2011
As you say, if the original lenders took the hit this would be a good idea-in fact precisely what should happen.
However there aren’t many executives who will agree to this happening on their watch-not good for the figures and thus the bonuses.
Looks like the taxpayer takes the hit-again.
September 2, 2011
A scheme so crooked and so obviously, fundamentally wrong that I would not be surprised to see Crash Gordon at the wheel!!
September 2, 2011
Those of us who have been financially responsible over the years seem to be seen as a cash cow for the profligate.
It’s about time that those controlling the Economy (be it politicians, central banks or retail/investment banks) learnt that reducing spending is a far quicker and more fair solution to the problems they have created. This also has the advantage of not fleecing tax payers and savers.
September 2, 2011
Mick
Agree, agree, agree.
September 2, 2011
“Reducing spending is a far quicker and more fair solution”
Yes but this seems rather unlikely – spend, spend, spend and waste, waste, waste seems to be the orders from the Coalition high command.
September 2, 2011
Do you remember Baldrick? Another clever plan……….
If you are working on a two year or even six year timetable, this is brilliant because your successor takes the hit.
Otherwise America needs to address this problem: where is the new Henry Ford? Where is the new frontier?
But thank you for an extremely perceptive comment – again!
September 2, 2011
“governments and banks are hitched together in all this” Indeed they are in the UK too. The inflation and the bank over charging on margins/fees to fill their black holes is just another tax on savers, borrowers and businesses. Forcing them to be uncompetitive, go out of business or just fail to grow.
September 2, 2011
Ed Balls on world at one yesterday. “If you adjust for high oil prices, the fall in exchange rates – underlying inflation is very low indeed”.
Is this not rather like a fat person saying if you adjust for my excess fat levels I am actually very slim indeed.
September 2, 2011
Touche!! – Great quote!
September 3, 2011
Good to see that his First in PPE at Oxford is not going to waste.
September 2, 2011
This smells like another political stitch-up. No doubt the impending Presidential election has something to do with it.
September 2, 2011
It is as you have said a crisis caused by government intervention to make loans available to people that shouldn’t have them. As with all government intervention it has had unintended and very bad consequences. If markets were free this would never have happened as banks would have known they stood to loose their money if the loans weren’t repaid and wouldn’t lend to bad risks.
If governments just did the jobs they were supposed to- basic services, law and order, particularly enforcing legal contracts, and defence there would be less boom and bust, more freedom and more prosperity.
A small state sector means a healthier economy and culture.
September 2, 2011
“If governments just did the jobs they were supposed to- basic services, law and order, particularly enforcing legal contracts, and defence there would be less boom and bust, more freedom and more prosperity.”
Indeed – but they blatantly fail to provide these basic services and yet want to stick their noses into almost everything else – to make a mess of it too or just to tax & licence it.
Even to the point of deciding what light bulbs you may have in your outside loo. “Health and Safety” or “Preventing Global Warming” are the perfect excuses for nearly any interference they wish to make.
September 2, 2011
Governments are sounding more and more like the dodgy traders they critisised in years past, in their desperation to get their hands on more money, any money, any cost.
I see from press reports that the Bundesbank are now having a go at the EU illegal bailouts.
Bailouts have “Gutted” EU’s Treaty Law, say’s Bundesbank. (Telegraph Philip Adrick)
UK in the meantime continiues to spend more and more, with our debt rising year on year.
Makes you wonder where it will all end.
On a positive note, I see Michael Gove has at last realised that some kids come so ill prepared for school, that he intends to do something about it.
It would appear he has also learned that some people do not want to learn, and are deliberately disruptive, and some with parents help, choose not to turn up to school at all.
It would also seem that these very same kids are more likely to join gangs and get into trouble, than those who are interested in learning.
Well knock me down with a feather !.
The above has been so obviouse to many of us for years, that we have almost given up talking about it, so Iwish him well, and trust that his actions, whatever they will be, make some difference.
September 2, 2011
“Governments are sounding more and more like the dodgy traders they critisised in years past, in their desperation to get their hands on more money, any money, any cost.” Agreed
This might not seem relevant but the news that Goldmans is cutting base salaries – after rasing them recently to acconut for lower bonuses – and now will pay lower bonuses is relevant.
The bottom line in the west has been leveraged to the eyeballs – and now banks can’t make any money. Even the cleverest bankers at Goldamns, who invented the CDO bubble, now realise that time is up. There is no new money that can be levergaed out the system. There are no new collateral that can be used as capital for yet another loan [though you are saying the FED is looking at high risk loans on heir books].
Remember the whole banking crisis was caused by regulators allowing mortgage assets (AAA+) to be used by banks as collateral.
Here’s my blame game ….
1) The Government encouraged cheaper housing loans
2) The regulators changed the rules to allow mortgages to be banks assets
3) The regulators gave opaque bundles of mortgages (CDOs) AAA+ ratings
4) The banks sold cheaper loans to get more mortgages to make CDOs
5) The public sucked up the cheaper loans for houses
6) The (Labour) Government stood by and watched
BUT WHO HAS PAID ….
TAXPAYERS AND SAVERS
September 2, 2011
For information that Telegraph article is here:
http://www.telegraph.co.uk/finance/financialcrisis/8736194/EU-law-gutted-by-bail-outs-growls-Bundesbank.html
To any fair-minded outsider who’s been willing to spend the time and endure the tedium of examining the present EU treaties, which are available here:
http://eur-lex.europa.eu/JOHtml.do?uri=OJ:C:2010:083:SOM:EN:HTML
it seems obvious that the EU elite have connived at multiple breaches of their provisions.
Indeed even some insiders have said as much.
Most notably but not only Christine Lagarde, a trained lawyer, formerly French Finance Minister and now head of the IMF, who told the Wall Street Journal last December:
http://online.wsj.com/article/SB10001424052748704034804576025681087342502.html
“We violated all the rules because we wanted to close ranks and really rescue the euro zone.”
“”The Greek and Irish rescues – €110 billion and €67.5 billion, respectively – and the creation of the bailout fund were, Ms. Lagarde said, “major transgressions” of the Lisbon Treaty that is the European Union’s governing document. “The Treaty of Lisbon,” she says, “was very straightforward. No bailing out.””
Even so, I fully expect that when the German federal constitutional court finally delivers its verdict next Wednesday it will be another one of its fudges, and it more or less goes without saying that if the federalist lawyers on the EU’s Court of Justice were asked for their opinion they would invent tortuous arguments to support their pre-determined decision that really everything was OK.
I don’t know why we should have to put up with living under this form of government, which thanks to foreign entanglements is no longer anything like democracy but has degenerated into arbitrary rule.
September 3, 2011
John Redwood is of a mind that we should abide by the treaties because, he says, it’s what the British people wanted!
My point of view the treaties are contracts – By this Treaty, the HIGH CONTRACTING PARTIES establish among themselves a EUROPEAN UNION …
Certain signatories to the treaties lied to gain accession, have over the ensueing decades lied and covered up their failure and inability to meet their obligations, [PIGS] as an example.
As the lies and deception predated the signing of the treaties, (1) the treaties were entered into in bad faith.
and, as a result of the dishonesty and fraud the contracting parties have been unable to meet their obligations under the treaties and clearly are still unable to meet their obligations under the treaties.
(2) the contracting parties are unable or unwilling to meet their treaty obligations.
As a result the international treaties establishing and binding the European Union have been abrogated by multiple of the contracting parties and thus.
The European Union does not have any authority in Law to compel the United Kingdom to meet its treaty obligations.
Now, the question:
If knowing this to be true, David Cameron continues to pay tax money to a non existent and illegitimate organization, is David Cameron a fit an proper person to be in charge of the government?
Reply: I have never said we should abide by the Treaties. I have said we should negotiate a different relationship for ourselves as I think the EU has far too much power over us. Why do Eurosceptics always have to seek to do down other Eurosceptics?
September 3, 2011
Vienna convention on the law of treaties 1969
Article 26
“Pacta sunt servanda”
Every treaty in force is binding upon the parties to it and must be performed by them in good faith.
September 3, 2011
As if by magic:
From the Wall Street Journal:-
“The troika said recession played a part,but Greece basically didn’t keep up with its commitments, so more measures will be needed to make up for the lost ground,”
It’s not just me that thinks Greece has failed to meet the treaty obligations.
http://online.wsj.com/article/SB10001424053111904583204576545811058225074.html?mod=WSJ_hp_LEFTWhatsNewsCollection
JR: “I have said we should negotiate a different relationship for ourselves as I think the EU has far too much power over us.”
But you fool yourself if you think the European Union will reopen the treaties voluntarily. It won’t!
I assume your talk of negotiation is sincere, but you cannot negotiate with the European Union.
You [Tories] can’t even cut the bureaucracy of the United Kingdom civil service, yet you claim you can persuade the European Union to moderate its demands?
The treaties are void through non performance and that is our way out!
Reply: Of course we could negotiate a common market relationship instead of membership of a superstate. I thought that was what you wanted. Those who simply say leave, without telling us how this can happen with the current state of public opinion and representation, also have to explain what relationship they would then want, what happens to all the common laws and cross border arrangements etc. Slogan are easy. Sorting the huge problem out is much more difficult.
September 4, 2011
But in the case of the EU treaties a breach of that principle of “pacta sunt servanda” does not remain on the international plane, because Parliament has passed Acts incorporating those treaties into our domestic law.
Therefore unless a Minister of the Crown has been given proper Parliamentary authorisation to break some aspect of the EU treaties he will also be breaking our national law, which in turn means that he is defying the constitutional law which is still fundamental to our parliamentary system, the Bill of Rights 1688:
http://www.legislation.gov.uk/aep/WillandMarSess2/1/2/contents
“Dispensing Power.
That the pretended Power of Suspending of Laws or the Execution of Laws by Regall Authority without Consent of Parlyament is illegall.
Late dispensing Power.
That the pretended Power of Dispensing with Laws or the Execution of Laws by Regall Authoritie as it hath beene assumed and exercised of late is illegall.”
I’ve often wondered why the contents of the first two clauses overlap in this way rather than being merged into a single clause – especially as they were merged in a single clause in the original Declaration:
“Whereas the late King James the Second … ”
“By Assumeing and Exerciseing a Power of Dispensing with and Suspending of Lawes and the Execution of Lawes without Consent of Parlyament.”
However the second clause is clearly the one which is most relevant at this time, ie the illegality of “the pretended Power … as it hath beene assumed and exercised of late”, starting with Alistair Darling in Brussels on May 9th 2010.
September 5, 2011
Dennis Cooper: “But in the case of the EU treaties a breach of that principle of “pacta sunt servanda” does not remain on the international plane, because Parliament has passed Acts incorporating those treaties into our domestic law.”
Thank you Dennis an interesting post.
However, that doesn’t seem to be a problem. If we agree the international treaties are voided by the gratuitous non performance of our treating partners, then we are no longer obliged to the European Union, there are no legal sanctions the EU can apply.
So we are now at liberty to repeal any aspect of domestic law, we wish.
Secondly, what is the status of a law that has been passed through Parliament where the founding principles – are based on an untruth?
The assumption is that a minister does not lie to Parliament.
September 2, 2011
It’s easy to blame the banks and greedy bankers, as we’ve seen over the last few years, but the truth of the matter is when governments punish the banks they are punishing me and you.
We will now see higher interest on credit cards, loans, mortgages, etc. and lower rates of returns on savings, pensions, lower dividends, etc.
It’s easy to think of the banks as some vast collection of money that has nothing to do with us but in the money has to come from somewhere and in the main it is from the mass of us faceless workers scurrying about our mundane business not high flying financiers and moguls.
So I hope the politicians don’t compound our initial hit with more bad news for us. Yes, learn lessons (some politicians seem to do little else) but let’s move forwards.
September 2, 2011
Given that the top 10% of the population have 53% of the wealth it seems that most of the money the banks have is from high flying financiers and moguls.
September 2, 2011
Lets hope the Republicans in Congress prevent any such nonsense. Here in Europe the time has surely come for a grand reckoning, restructuring of Eurozone debts and recapitalisations of the banks. Cable’s plan to split the banks is a non-starter, it won’t be clear where the distinction between the 2 parts is and it wont be possible to insulate the retail part from the investment banking part unless ownership is split. We should go the Swiss route – big increases in capital requirements. Then we need proper market valuation of risky assets on banks’ balance sheets and rights issues to raise capital at deep discounts and underwritten by bondholders and depositors over a certain size. The lesson from Japan is the longer the day of reckoning is postponed the longer recovery will be – and it can be delayed a very long time.
September 2, 2011
The longer this goes on the clearer it is that the Govt should not have stepped in to prevent the banks declaring insolvency .
Why did the Govt of the day pay a lot of public money it did not have for banks which were collectively not worth one penny .
September 3, 2011
Because Brown, idiotically and mistakenly, thought it was the best way to win an election and to show he had “saved the world”.
September 2, 2011
I think there is some merit in splitting the banks. I was listening to a banker, on radio 4 this week, who from practical experience said the Glass Steagall act in America worked very well. That act ran from 1933 to 1999. Only after that act was abandoned did the present day troubles start. The banker advocated the return of the act.
September 3, 2011
Tedgo: “The banker advocated the return of the act.”
But (some?-ed) top executives in the major international banks have made out like bandits.
Some might say (a few? ed) have behaved like bandits too.
I couldn’t possibly comment.
September 3, 2011
I think you are missing my point, the Glass Steagall Act forced American banks to have the safe normal banking side separated from the casino side. That safeguard was removed in 1999.
The banker advocated going back to that arrangement.
September 3, 2011
Tedgo: “That safeguard was removed in 1999.”
By then it was largely being ignored anyway. The removal of the legal restriction was a result of lobbying by some top executives at at least two of the largest and now most bankrupt American International banks. Illustrating that when the bankers and politicians get in each others pockets nothing will be allowed to stand in the way of a good scam.
– Thomas Jefferson: “I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the government at defiance. The issuing power of money should be taken away from the banks and restored to the people to whom it properly belongs.”
September 3, 2011
When the Glass Steagall Act was abolished I believe senator Byron Dorgan, who opposed the move, said “this will in my judgement raise the likelihood of future massive taxpayer bailouts”.
September 3, 2011
Richard1: “Lets hope the Republicans in Congress prevent any such nonsense.”
The Republicans under George Bush allowed Greenspan to inflate the biggest credit bubble in history. Bernanke who was Greenspan’s side kick all that time couldn’t go back on the policy without loosing credibility.
It is convenient for them that it pops just about the same time that America gets the most negligent president in history.
September 2, 2011
“The truth is ,
governments and banks are hitched
together in all this. ”
Finally an important politician comes out and says it. This is the problem. Neither the govt nor the banks have any interest in sound money. They collude together in a cabal that is killing the economy, and impoverishing the people. What kind of govt is that ?
I see reuters reported yesterday that Christine Lagarde, head of IMF, is saying that taxpayers must be FORCED to bail out banks.
This is communism, or fascism
We are doomed.
September 2, 2011
As I understand the situation, our government is demanding that our banks lend more. This is what they were doing before the Northern Rock failed and as a result they were condemned by the government for irresponsible lending. So they tighten up and lend less (because they’ve got less) and are then told that they are irresponsible because they are preventing growth in the economy.
Who’d be a banker (excerpt for the money)!
September 2, 2011
Mr.Redwood, The big Wall Street law firms are rubbing their hands with glee.
September 2, 2011
You have mae a very good post questioning the semantics of the Governments financial policies over the past 10 years.
I suppose what strikes me is that Governments have gained advantages out of “soft” targets – either savers or taxpayers.
The question for me is what happens when savings stop and borrowing takes over? At a deep level the public stop investing in their state. When tax payers then take on the risks of the investor without authority over the risk? then the public will eventually see the Government as corrupt.
September 2, 2011
Allister heath makes the excellent observation that the very weak manufacturing figures in the Eurozone and UK mean that the Bank of England may start a further round of QE in the UK.
http://www.cityam.com/news-and-analysis/allister-heath/why-more-qe-would-be-wrong-uk
He also makes the excellent observation that lower FX rates (via QE) will RAISE inflation whilst the weak demand in the Eurozone will mean we will NOT benefit by higher imports.
September 2, 2011
Every day and to at least one young family,I tell them to sell up and leave for the Great southern former colonies,I even carry around with me a current colour photocopy picture of my First house bought in 1969 in BRISBANE,at the age of ONLY 24 ,3 beds two bathrooms
one ensuite DETATCHED,Australian current price $300,000 [£185,000 app] I ask them
‘WHEN they expect to own a similar house here?” to mirth all round,I tell them to take a “HIT” here and sell at less than similar properties [If they can] before this market takes a FORCED by market forces hit which will be greater,and to start again.I also explain that it is not only this reason why to leave but many IN DETAIL especially commenting that do they want their children growing up in a country forecast to have a population of 70 million very soon,where immigrants will likely be at least 25 % of the population with a land mass of 90,000 sq miles,given that Australia is just under 3 MILLION sq miles with
22 million at present,and NZ is 142,000 sq miles with only 4,5 million.As our US cousins say THIS IS A NO BRAINER.
September 2, 2011
This article is really good if anyone hasn’t seen it.
http://www.prospectmagazine.co.uk/2011/08/a-good-crisis-gone-to-waste/
Not free I’m afraid but well worth getting a copy Prospect for.
September 2, 2011
US Stealth QE spreads inflation around the world. The BoE does not even have to stoke our own these days. The Treasury will be pleased to hear the news.
September 3, 2011
stred: “US Stealth QE spreads inflation around the world.”
What do you think triggered the revolutions across the Arab world ? It wasn’t hunger for democracy, it was just hunger plain and simple.
If you currency is pegged to the US $ and raw materials are sky-rocketing in price because the US$ is being depreciated. You find that the loaf of bread you could buy last week for 1 Egyptian pound now takes five instead.
A hungry man is a desperate man!
September 2, 2011
It seems to me that there was deliberate (misleading-ed) involved in these American mortgages. The bonds they supported were dressed up to conceal the level of risk and to deceive the ratings agencies. Until this poison is flushed from the system, however painful the process may be, there is a level of distrust which is undermining the whole system.
Reply: this is hotly disputed – there was a lot of maths and argument to support the idea that the overall packages were less risky than individual mortgages within them. Fannie and Freddie buying some of them were it is agrued professional investors who could have done their own due diligence. In effect the US governemnt is suing the UK government as the UK government is the owner of RBS
September 3, 2011
JR: “This is hotly disputed .. ”
I bet!
Taken from the US Congress Financial Crisis Inquiry report.
“At Citigroup, meanwhile, Richard Bowen, a veteran banker in the consumer lending group, received a promotion in early 2006 when he was named business chief underwriter. He would go on to oversee loan quality for over $90 billion a year of mortgages underwritten and purchased by CitiFinancial. These mortgages were sold
to Fannie Mae, Freddie Mac, and others. In June 2006, Bowen discovered that as much as 60% of the loans that Citi was buying were defective. They did not meet Citi-group’s loan guidelines and thus endangered the company—if the borrowers were to default on their loans, the investors could force Citi to buy them back. ”
So 60% of $90B or $54B were defective. Annually.
September 4, 2011
The models depended on the assumption that house prices never fall across a broad enough average. The models were indeed deeply flawed. I have come across many other cases where derivatives pricing makes assumptions that are not grounded in reality, simply to make the model tractable to high level mathematics involving stochastic calculus and other similar techniques. Few models consider what happens as open interest in a derivative grows way beyond what might be called natural insurance interest. The idea of bubbles exploding is excluded, despite the many historical examples.
Memoirs of Extraordinary Popular Delusions and the Madness of Crowds published in 1852 should be required reading for every financial regulator and banker – particularly the chapters on the South Sea Bubble, Tulip Mania and the Mississippi scheme that ultimately led to the French Revolution courtesy of the Scotsman John Law who earned the epitaph
“Ci gît cet Ecossais célébre,
Ce calculateur sans égal,
Qui, par les régles de l’algébre,
A mis la France à l’hôpital.”
That might almost have been written for a modern purveyor of derivatives, which Warren Buffet famously described as weapons of financial mass destruction.
It is freely available via Project Gutenberg.
September 2, 2011
“Meanwhile today’s story is possible legal action against the banks that packaged up mortgages and sold them on …”
Well, it wasn’t illegal to do that, although maybe it should have been, and there were ready buyers for the packages, who in many cases sold them on further, and as I understand they were being constantly traded around the world in volume and often on the basis of verbal agreements made over the phone with few questions asked.
And why was that? Was it because the credit ratings agencies gave almost all of them very high ratings, when many of them should have been given lower ratings, and some were little better than junk?
Provided that the originating bank didn’t misrepresent the contents of its packages to the credit ratings agencies, can it be held liable if those who ended up holding those packages found on a belated careful examination that they included a load of rubbish?
Eg, from April 2010:
http://www.nytimes.com/2010/04/26/opinion/26krugman.html
“… the e-mail messages you should be focusing on are the ones from employees at the credit rating agencies, which bestowed AAA ratings on hundreds of billions of dollars’ worth of dubious assets, nearly all of which have since turned out to be toxic waste. And no, that’s not hyperbole: of AAA-rated subprime-mortgage-backed securities issued in 2006, 93 percent – 93 percent! – have now been downgraded to junk status.”
September 2, 2011
Who are the original lenders? I thought this was one of the the main problems?
September 2, 2011
China owns the world now
September 3, 2011
BobE: “China owns the world now”
Possibly, but which would you rather be?
The borrower who has recklessly taken on more and more debt and now with no hope of ever paying back, goes to the lender to suggest that if he won’t lend more money, the loan obligation will be defaulted.
OR
The lender who has loaned equally recklessly and is becoming increasingly concerned that he will not only loose all the money already loaned but is going to loose all the trade that the loaned money was buying from him.
September 3, 2011
JR: “In stage one, the age of collaboration, governments encouraged banks to lend more and more money to more and more people least likely to afford the loans, ”
Not just any old governments, largely socialist or lefty governments.
September 3, 2011
As I recall Lloyds was a profitable bank until it merged with HBOS. Shortly afterwards the taxpayer had to fork out £17 billion as a bailout. Eric Daniel’s was quoted in the FT afterwards about the lack of due diligence that Lloyds undertook before the merger. He said they spent 5000 hours on due diligence when really there should have been three to five times that amount of hours expanded. That taxpayer bailout has now cost the taxpayer three times the original £17 billion.
It is not unreasonable for governments to collaborate with banks but at the end of the day the banks have a fiduciary duty to carryout due diligence on the mortgages that they make and even on the repackaging of those loans when they pass them on. (If the government of the day was collaborating with car manufacturers to sell more cars and cheaper would it then be okay for the manufacturer to remove the car breaks to lower costs and speed up sales? I think not.)
It is interesting to note that the US authorities are intending to sue the banks to recoup the taxpayer losses (just as private investors have successfully sued already) and now the FT reports that our SFO is beginning an investigation that could possibly lead to criminal and civil proceedings.
The banks are entering the eye of the perfect storm and the government is being dragged in through its shareholding. There now looks little hope of being able to sell these before the next election but my view is that holding on to them creates a conflict of interest for the coalition. Governments record as speculators in shares and property is woeful and twas always so.
September 3, 2011
I should have provided the reference to support my comment above. It was a report that appeared in the FT.com on February 11th 2009 entitled “Lloyds chief admits reduced diligence”
September 4, 2011
JR: “Of course we could negotiate a common market relationship instead of membership of a superstate. I thought that was what you wanted.”
I do, but your proposal to negotiate with the European Union about our withdrawal is unrealistic, would take too long and not least give the treacherous swine within the Tory party [ no names no pack drill] time to regroup, out flank and undermine you once again. It happens so often one wonders if there isn’t a script!
We should leave, then negotiate, the EU isn’t going to cut off our trade because we unilaterally depart the organization. On top of that, they want the £10billion per year subscription badly. It’s just that we need it more!
We could just re-join EFTA and focus on the reduction of trade barriers within the European region. That’s the trade barriers that every doom merchant says the European Union would impose if we left the European Union.
JR: ” Those who simply say leave, without telling us how this can happen with the current state of public opinion and representation,”
Well, you can stop allowing the Tory wets and traitors to make a fool of the right of the party ( or what’s left of the right of the party). That would be a start!
I’ve waited patiently for 38 years for the Tory party to do something about the EU and frankly I have little faith that you people are up to the task.
JR: ” .. also have to explain what relationship they would then want, what happens to all the common laws and cross border arrangements etc.”
For gods sake:
We will be independent. We can make our own choices.
I just told you the legal mechanism that allows us to leave. Non performance of Treaty obligations of the other EU States. In fact it allows us to pick and choose what aspects of the treaties we will enforce now all perfectly legal and in accord with our desire for self determination.
We leave the EU, but are still members of the UN and WTO. We could use both forums to lever the EU to accommodate our expectations and requirements for free trade.
JR: ” Slogan are easy. Sorting the huge problem out is much more difficult.”
I haven’t given you any slogans. I have given you a feasible legal mechanism to leave, there is no need to consult the public in a referendum. Our treaty partners have failed to meet their obligations and consequently the European Union treaties are void.
The problems could be sorted after we leave by negotiation using the WTO and our position in the UN. We could rejoin the EFTA.
There is the basis for articulating a positive future for us outside the European Union. The absence of such a ‘vision’ is what the EUro maniacs take advantage of when they scare and actually threaten people with the lie that leaving the EU will cost us 3 million jobs.
That we do not have a positive vision of what could be outside the European Union is a failure of those prominent people who consider themselves Eurosceptic.
September 4, 2011
Greek Finance Minister Evangelos Venizelos attempted to play down talk of a rift between the two sides. At a hastily called press conference, “Venizelos said the talks had been conducted in a “very friendly and creative climate.”
Greek Finance Minister Evangelos Venizelos played down reports of a rift. However, Venizelos also warned his fellow countrymen of more economic doom and gloom ahead, saying Greece’s economy would shrink by as much as 5 percent this year – far worse than the 3.75 percent drop predicted just three months ago.
http://www.dw-world.de/dw/article/0,,15361983,00.html
September 6, 2011
Lord Lawson thinks European treaties can be ‘torn up’.
http://www.bbc.co.uk/news/uk-politics-4789126#story_continues_1
Good for him, but wasn’t he one of the backstabbing ‘Tory’ Europhiles back in the day?
There will be more rejoicing in heaven over one sinner that repents ….